Berkonomics

JULY 16, 2020

It may not be equity. Venture or angel-financed companies with plenty of working capital sometimes are immune to this working capital need for some time into their growth, but at some point, it will become clear that the cheapest form of finance is not equity in a growing enterprise. Back to loans costing less than dilution of equity.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

Startup Professionals Musings

JANUARY 21, 2017

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. Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

keen.io

FEBRUARY 5, 2013

I recently left my job as a technical consulting manager and joined my best friends and my fiancé, Kyle, at Keen.io (I wrote about that here ). For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. Paul Graham’s Equity Equation. Startup Equity for Early Employees.

Salary 50

Salary Equity Startup San Francisco 50

ReadWriteStart

SEPTEMBER 9, 2019

Although some founders take venture capital in exchange for equity, that’s not the only way to do it. Before being named president and COO of OnPay , a growing online payroll solution for small businesses, McKee worked as managing director of The Lenox Group, where he advised growing companies on how best to raise and structure capital.

Venture Capital 105

Venture Capital Equity SBA Finance 105

The Next Web

FEBRUARY 27, 2014

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. your equity in a hot new patented technology business), the higher the demand (e.g., revenue, cash flow or net income multiples from recent M&A transactions in your industry.

Valuation 167

Valuation Forecast Seed Stage .Net 167

ithacaVC

FEBRUARY 23, 2011

A management carve out plan (MCOP) is a written obligation of the company that, in simple terms, provides that certain management members get a predetermined slice of proceeds when a company is sold. A great question to consider is how the MCOP is allocated among management members. But when should the MCOP be adopted?

Liquidation Preference 55

Liquidation Preference Management Preferred Stock Dividend 55

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. In a startup, dilution happens, and you just need to factor it in.

Equity 56

Equity Employee Vesting Preferred Stock 56

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Berkonomics

AUGUST 21, 2013

Venture or angel-financed companies with plenty of working capital sometimes are immune to this need for some time into their growth, but at some point it will become clear that the cheapest form of finance is not equity in a growing enterprise. And yet, such a loan does rise and fall with need.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61

Rob Go

JUNE 17, 2014

It has a meaningful impact on your net dilution, and I’m often surprised how often founders don’t consider this a malleable term. Basically, have an estimate of the hires that you are likely to make over the course of the next round and the equity packages you are expecting.

Option Pool 65

Option Pool Dilution .Net Term Sheet 65

Venture Chronicles

MAY 26, 2010

Venture math is really simple, if you raise $10 million for a company that is valued at $10 million “pre-money&# then you have sold 50% of the equity to the new investors. These are better described as examples of bad management than too much capital but at some level they are one in the same. pre-money then you have sold 75%.

Lean 40

Lean Early Stage Valuation Startup 40

Both Sides of the Table

APRIL 25, 2011

It would not be a big stretch to image a well run service business like this making 15-25% net profit margins. The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners. That is $12 million in profits over 3 years.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

ithacaVC

JUNE 28, 2011

In the financing there are 3 institutional investors and 4 high net worth individuals. Let’s assume that future equity financings will be needed as usually is the case. The impact of the warrant kicker is to dilute non-participants.

Warrant 53

Warrant Common Stock Liquidation Preference Institutional Investors 53

This is going to be BIG.

MARCH 28, 2021

Still, a lot of founders are worried about early dilution and how it affects their eventual outcome when the company is sold. That’s because dilution isn’t subtraction. If I get diluted another 23%, I own 77% x (1-23%), which is 59.29%. If I get diluted another 23%, I own 77% x (1-23%), which is 59.29%.

Founder 133

Founder Post-Money Valuation Dilution Valuation 133

maplebutter.com

JANUARY 8, 2013

Do that – nothing else but one product / company / focus and get to $1M in sales with atleast $15% net profit. Friends & Family – High net-worth individuals with a passion for you and your industry. High net-worth individuals familiar with the industry or credit cards. Once you’ve done that – then. do something else.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

www.paulgraham.com

APRIL 28, 2010

And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Whatkind of anti-dilution protection do they want? The angel now owns 200/1200 shares, or a sixth of thecompany, and all the previous shareholders percentage ownershipis diluted by a sixth.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

crowdSPRING Blog

DECEMBER 13, 2018

As we wrote in Brand Health, 6 Important Questions You Should Ask About Your Small Business Brand , Brand health can be measured in numerous ways, including brand reputation, brand awareness, brand equity, brand positioning, and brand delivery. This is also known as the Net Promoter Score (NPS) question. Management.

Marketing 162

Marketing Charlotte Naming Design 162

abovethecrowd.com

APRIL 20, 2016

These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. We have already seen examples of founders and management obtaining liquidity in front of investors. It will also minimize future dilution. Late 2015 also brought the arrival of “mutual fund markdowns.”

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.paulgraham.com

APRIL 28, 2010

Dilution is normal. They cant dilute you without diluting themselves justas much. And they wont dilute themselves unless they end up net ahead. So its your choicewhether you get diluted. [ 3% of your net worth. Plus you get equity. How much does an angel invest? Thatsless than.3%

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Startup Professionals Musings

OCTOBER 10, 2013

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. Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors.

Founder 231

Founder Equity Dilution LLC 231

Startup Professionals Musings

SEPTEMBER 10, 2012

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. Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors.

Entrepreneur 241

Entrepreneur Equity Dilution LLC 241

Hunter Walker

NOVEMBER 25, 2022

Recently in speaking with an engineering manager candidate who had been working at later stage/public companies, we got to discussing compensation. They should have this conversation prospectively with the founder/hiring manager just to understand the startup’s emerging compensation philosophy. Kind of a crazy question to ask, right?

Salary 56

Salary Burn Rate Dilution Equity 56

Up and Running

DECEMBER 9, 2014

Two, I’m a small business owner or manager. Two, I’m a small business owner or manager. What is the hardest part of managing your finances? The possible answers are: one, need for funding, two, working capital and expense management, three, taxes, four, technology. Two, working capital and expense management.

Small Business 95

Small Business Finance Forecast Metrics 95