Remove Burn Rate Remove Equity Remove Finance Remove Management
article thumbnail

Create Structure out of the Gate and You’ll Thank Yourself Later

Feld Thoughts

Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing. So why would you treat your debt investors (somewhat) like equity investors?

Burn Rate 152
article thumbnail

The Great VC Ice Age is Thawing (for now) – Part 1 of 3

Both Sides of the Table

High burn-rates fueled by over investment – One of the most damning things that happened to the start-up markets in 97-00 and 05-08 was the overfunding of technology companies. Bu when you start to worry that the world is ending (as it seemed it was in late 2008 / early 2009) you tend to get worried about large burn rates.

Burn Rate 263
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

10 Incentives For Entrepreneurs To Bootstrap Their Startup

Startup Professionals Musings

Even a small investor in the early days will take a large equity percentage, due to that pesky valuation challenge. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. Managing investors is a distraction from your core business.

article thumbnail

Startups and VCs Should Avoid “Pier” Funding

Both Sides of the Table

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290
article thumbnail

10 Reasons for a Startup to Skip Outside Investors

Startup Professionals Musings

Even a small investor in the early days will take a large equity percentage, due to that pesky valuation challenge. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. Managing investors is a distraction from your core business.

Startup 264
article thumbnail

Strategy Roundtable For Entrepreneurs: Non-dilutive Financing Through Revenue Sharing

ReadWriteStart

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. The game has started getting some traction already, and has a good virality index.

Dilution 114
article thumbnail

10 Incentives For Entrepreneurs To Bootstrap Their Startup

Gust

Even a small investor in the early days will take a large equity percentage, due to that pesky valuation challenge. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. Managing investors is a distraction from your core business.