Gust

OCTOBER 15, 2012

An impromptu Twitter debate arose among Fred Wilson, Dave McClure, Mark Suster, Chris Dixon and others about convertible debt, priced equity rounds, and the nuances of early stage financing. It was such a good discussion that Fred asked that someone Storify it. I’ve done that here and expanded it with some additional references, background info and light commentary.

Equity 140

Equity Early Stage Finance Due Diligence 140

Gust

OCTOBER 7, 2012

Image via Facebook.com. Every time I hear about a new startup that is in stealth mode, I wonder what problem they are hiding from whom. Of course they pretend that they are trying to avoid alerting competitors prior to launch, but too often it becomes an excuse to move slowly in a world that’s all about getting to market fast. I believe stealth makes sense for large companies who can be sued for “pre-announcing” a new product to stall the market or kill a competitor.

Stealth 131

Stealth Entrepreneur Incubator Engineer 131

Gust

OCTOBER 4, 2012

People who tell you that VCs won’t look at a company with an even equity split are being silly. That has never once, in my experience, been even a slight hiccup, let alone a dispositive factor in a seed investment. That said, there is a core of truth in the concept that there always needs to be *some* way to make a decision. That’s why the Senate has the Vice President as the tie breaker, and why boards of directors are almost universally an odd number.

Equity 125

Equity Founder Government Startup 125

Gust

OCTOBER 11, 2012

While you will definitely need to be a corporate entity before you can accept funding from any investor (or issue stock options to any employees), the specific corporate status of the venture at this stage is much less important to investors than its functional status. That is, if all you have is a good idea, the reality is that you are highly unlikely to be able to get funding from anyone at all, even if you are a Delaware C corporation with gilt edge stock certificates.

Delaware 122

Delaware Stock Options Cofounder Stock 122

Gust

OCTOBER 25, 2012

The question should be “used for what?” Because convertible notes are designed to give investors an equity interest in a company that will eventually be worth much more than their investment, the intention on their part is always to convert into equity (after all, if they were just after the interest on a loan, they could find much less risky things to invest in than a startup.).

Bankruptcy 121

Bankruptcy Valuation Equity Finance 121

Gust

OCTOBER 16, 2012

I like this a lot. The executive summary: . Dropbox Co-Founder Drew Houston believes false mythologies about tech company founders do a disservice to aspiring entrepreneurs. While many people think all tech founders start with world conquering visions, says Houston, the reality is that founders learn one day at a time just like everyone else. This less-than-two-minute video comes from Stanford’s Ecorner , its online entrepreneurship center, which is a great resource. .

Houston 119

Houston Founder Cofounder Video 119

Gust

OCTOBER 2, 2012

True story: many long years ago I had founders’ stock in a video game company. At one point they were just a few weeks from going public, but that’s not the point of this story. It was about a “hit” business, meaning a business in which you had to have a lot of products in play to get one of the big hits that paid for the rest of the disappointments.

Restful 119

Restful Stock Video Founder 119