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8 Keys To Maximizing Your New Venture Stock Net Worth

Startup Professionals Musings

This is called stock dilution control. While new equity owners always have to get it from someone, actual re-allocation of existing shares should be based on a formula to maximize the value of your remaining founder shares. Minimize your own loss of ownership as major investors contribute.

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The Pros and Cons of Rando Rich People Investing in Your Startup

This is going to be BIG.

On the other hand, they could be the opposite—much more focused on near-term cash distributions than long-term equity appreciation. The first thing you need to get straight with a high net worth individual—what is their return expectation? Can they lose this money? How long do they think it will take to make a return if there is one?

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

Gross Burn vs. Net Burn. Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. (it Net burn is the amount of money you are losing per month. I often see companies burning $100,000 per month (net) looking to raise $6-8 million.

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Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. That’s the concept of what some call mathematical dilution. Before, it might have net assets that are near zero.

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Crowd Funding Has Not Killed Angel Investing Yet

Startup Professionals Musings

Entrepreneurs who require funding for their startup have long counted on self-accredited high net worth individuals (“angels”) to fill their needs, after friends and family, and before they qualify for institutional investments (“VCs”). They will need more money. If you subscribe to truths one to five, startup investing can be lucrative.

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8 Expectations To Check Your Entrepreneur Motivation

Startup Professionals Musings

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Under all of these, net income flows easily into your personal income. Non-equity funding has to come from personal sources, or government grants, or bank loans.

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7 Advantages That Local Small Business Owners Enjoy

Startup Professionals Musings

It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. Personal income is related to operations versus equity. With major investors, your equity and return is diluted and delayed.