YoungUpstarts

OCTOBER 16, 2016

Manage cash flow. But take it from what a good friend and advisor once said to me: “Ego is dilutive to net worth.”. Renegotiate experience and expectations with these external third parties. Expect it, plan for it and don’t apologize for it. Clarify and document expectations through a simple letter of understanding.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

Startup Professionals Musings

JANUARY 26, 2019

Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors. Under all of these, net income flows easily into your personal income. Income generated is part of the owner’s personal income. There is no free lunch for money.

Startup 194

Startup Equity Dilution LLC 194

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Founder Earnings = Net Income + any amount of founders’ salaries over a certain threshold. Alternative Capital. “

Revenue 60

Revenue Technical Review Software Review Equity 60

Berkonomics

JULY 16, 2020

If the equity value of a company is growing at the same rate as the company, say 40% per year, almost any form of debt financing may be preferable as a way of preventing further dilution from issuing additional equity. Back to loans costing less than dilution of equity. The banks need to be convinced. Read the loan covenants carefully.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

Both Sides of the Table

JUNE 17, 2017

This is not atypical for “middle men” who often take 15–30% of the value of the sale If you’re shaking your head and thinking, “duh” I promise you that even some of the most sophisticated people I know get off track on this issue of “gross revenue” versus “net revenue.” Stock option grants dilute your ownership in the company.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Hunter Walker

JANUARY 17, 2019

But there are some things we’ve learned and frequently new/aspiring managers hit us up for advice. That said, there are two portfolio modeling/management tips that I do think are valuable exercises for every Fund I. This exercise is also known as “let me show you how we get to 3-5x net.”

Portfolio 104

Portfolio Forecast Dilution LP 104

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. 4%, to use same dilution multiple.

Salary 56

Salary Burn Rate Dilution Equity 56

Startup Professionals Musings

SEPTEMBER 5, 2018

Mike uses his own experience as a recovering workaholic building two multimillion-dollar companies to net out seven steps in his transformation. As business owners, you all have to balance getting work done (doing), making decisions (deciding), managing people (delegating), and constant improvement (designing).

Advisory Board 152

Advisory Board Non-Compete Dilution .Net 152

Startup Professionals Musings

OCTOBER 10, 2013

Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors. Under all of these, net income flows easily into your personal income. Income generated is part of the owner’s personal income. There is no free lunch for money.

Founder 231

Founder Equity Dilution LLC 231

Startup Professionals Musings

JANUARY 21, 2017

Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors. Under all of these, net income flows easily into your personal income. Income generated is part of the owner’s personal income. There is no free lunch for money.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

Startup Professionals Musings

SEPTEMBER 10, 2012

Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors. Under all of these, net income flows easily into your personal income. Income generated is part of the owner’s personal income. There is no free lunch for money.

Entrepreneur 241

Entrepreneur Equity Dilution LLC 241

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

YoungUpstarts

AUGUST 8, 2013

by Ryan Currie, product manager at BizShark.com , Kim. And today they’re actually notable with a reported $100 million net worth. The second a brand lets its management be outsourced to someone else, the brand is at risk of diluting itself. Wait, is Kameron a Kardashian? Who can even tell anymore? Who’s laughing now?

Dilution 203

Dilution Open Source .Net Web 203

Berkonomics

JANUARY 13, 2022

You no longer need to worry over daily cash or threats to your net worth. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale. I often advise managers, CEOs and entrepreneurs always to part on a positive note and never burn the bridges of any past relationship.

Dilution 62

Dilution .Net Sales Entrepreneur 62

Duct Tape Marketing

OCTOBER 11, 2023

But what the dilution, if you bring it down to it that even creator entertainers and educators have in common is it's this human element. 14:33): So thinking about how many conversations the sales team was able to capture, how many net new names do we get on to our list? I am ready to be your social media manager.

B2B 80

B2B Marketing B2C Community 80

Startup Lessons Learned

OCTOBER 26, 2009

In previous posts, I’ve mentioned quite a few of these, including these most important ones: having engineers post on the forums in their own name when they make a change routinely split-testing new changes routinely conducting in-person usability tests and interviews Net Promoter Score Each of these techniques is fundamentally bottoms-up.

Advisory Board 151

Advisory Board Customer San Francisco Lean 151

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. In terms of techniques investors use to value your business, investors will study things like: revenue, cash flow or net income multiples from recent financings in your industry.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Occam's Razor

APRIL 15, 2019

During 2019, our Net Promotion Score has dropped 15 points. They dilute the analysis with non-facts. Sometimes this is your direct manager. If you are in the data business – my bread, butter and tofu – you often carry the burden of being the bearer of bad news. The conversion rate is down 30% at launch.

Leadership 79

Leadership Non-Compete Analytics Software Review 79

A Smart Bear: Startups and Marketing for Geeks

JULY 11, 2011

He’s in the best possible position — the company is profitable and growing and doesn’t “need&# the money, so with little dilution he could take $10m for safety, comfort, and scale. You can’t have personal finance affecting your behavior or time-management at SEOmoz. In fact, you’re already there!

.Net 230

.Net Cofounder Dilution Finance 230

ConversionXL

NOVEMBER 6, 2017

What works for first-time customers might have less of an effect on (and be diluted by) people who are returning to buy again. Then, seeing desktop variant outperform the control, the mobile version shows no difference, or clear small negative, but a net gain on the overall. We see this pattern all the time] outside of a test.’.

Chad 112

Chad Mobile Technical Review Aggregator 112

ReadWriteStart

SEPTEMBER 9, 2019

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. It’s non-dilutive capital you don’t have to pay back, plus it tends to create a great PR opportunity.

Venture Capital 105

Venture Capital Equity SBA Finance 105

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. Net net, I think that currently entrepreneurs are able to manage this more effectively. Here are three good ones from Venturehacks , Mark Suster , and Jeff Bussgang.

Option Pool 65

Option Pool Dilution .Net Term Sheet 65

Berkonomics

AUGUST 21, 2013

If the equity value of a company is growing at the same rate as the company, say 40% per year, almost any form of debt financing may be preferable as a way of preventing further dilution from issuing additional equity. And it is often cheaper than the cost in dilution of issuing additional stock to obtain working capital.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61

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 ). If the company is pre-funding or only has a small friends-and-family seed round, then the numbers should go up from there, based on expected dilution and greater risk.” August 21, 2012.

Salary 50

Salary Equity Startup San Francisco 50

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. If you really want to do a product business then hire a professional manager for your services company, quit that job and focus 100% on your product company. That is $12 million in profits over 3 years.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

ConversionXL

FEBRUARY 21, 2018

Most tools will not be capable of identifying the same user across different devices or browsers, diluting the value of customers who have multi-device journeys. To illustrate: using cutoffs on tertiles, you end up with 3*3*3 = 27 cohorts, a number that should be manageable for most businesses. Quintiles give you 125 cohorts.

Programming 117

Programming Audience Analytics Metrics 117

K9 Ventures

MARCH 20, 2017

I’ve seen and heard of enough cases of when founders didn’t do their homework and ended up committing themselves to an investor relationship that was in some cases either a drag on the company or the board dynamics, or best case a net neutral. How did he/she manage themselves in during that disagreement?

Founder 99

Founder Dilution Partner Curation 99

Venture Chronicles

MAY 26, 2010

Another point worth mentioning is that not having a lot of capital does not immunize you from making bad decisions… companies with tight capital positions make bad decisions all the time and when they do they don’t have a safety net from which they can recover.

Lean 40

Lean Early Stage Valuation Startup 40

David Teten

AUGUST 21, 2019

Less or no dilution. Companies Lighter Capital has funded on average have negative 14% net margins.” Requires regular monthly payments and careful cash management. That said, Jim Toth, Managing Partner, Riverside Acceleration Capital, observes, “Actually, everyone is aligned towards growth. Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Berkonomics

OCTOBER 8, 2015

Email readers, continue here…] First there comes a sense of relief, knowing that you no longer need to worry over daily cash or threats to your net worth. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale. Many fail multiple times.

Entrepreneur 48

Entrepreneur Dilution .Net Sales 48

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

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

ithacaVC

JUNE 28, 2011

In the financing there are 3 institutional investors and 4 high net worth individuals. The impact of the warrant kicker is to dilute non-participants. In effect, the stock kicker lowers the immediate price of the Series B shares and immediately dilutes non-participating shareholders.

Warrant 53

Warrant Common Stock Liquidation Preference Institutional Investors 53

This is going to be BIG.

JUNE 2, 2010

Frankly, what a lot of startups should do is spend the money not on another developer to build more stuff, but on a kick ass product manager to eliminate features (especially the ones that get requested after you launch) and focus the offering. Unfortunately, when you have more money, you tend to do more stuff.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

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.payne.org

SEPTEMBER 22, 2011

3 Dilution. Those new shares are created out of thin air by the company, and will dilute all of the current stockholders. Since you still have 100,000 shares, your ownership percentage is now dropped to 0.8333% -- you just got diluted. In a startup, dilution happens, and you just need to factor it in. diluted) terms.

Equity 56

Equity Employee Vesting Preferred Stock 56