ReadWriteStart

JUNE 1, 2020

In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. For these businesses, it is imperative to get funding from the start without which the company cannot be set up. Capital is expensive.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

David Teten

AUGUST 19, 2019

I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

DECEMBER 27, 2014

Based on the best evidence I can find, the genesis of this trend and the advantages come from several evolutionary changes in the startup investment industry, and some innovations driven by the recent recession: Venture capital funds are still recovering from the recession.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

Seeing Both Sides

AUGUST 28, 2017

Goldman Sachs and CB Insights recently reported that startups have raised over $1 billion in Initial Coin Offerings (ICOs) this summer — more than the total amount of venture capital raised during the same period. Need for growth capital. A company that can successfully raise money in an ICO may never need venture capital again.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Goldman Sachs and CB Insights recently reported that startups have raised over $1 billion in Initial Coin Offerings (ICOs) this summer — more than the total amount of venture capital raised during the same period. Need for growth capital. A company that can successfully raise money in an ICO may never need venture capital again.

Early Stage 20

Early Stage Equity Venture Capital Government 20

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

ReadWriteStart

SEPTEMBER 10, 2010

And EVEN if you ARE an experienced entrepreneur, all but just a few VCs still want to see customer validation, business model validation and traction, before they will invest. You can get cash without diluting your ownership in the company. Yes, venture capital is very good for scaling businesses rapidly.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Startup Professionals Musings

FEBRUARY 9, 2018

In fact, research by Fundable shows that less than one percent of all startups are funded by venture capital and angel investors. You need a business degree to start a venture today. The real value of a college education is in learning how to learn, since markets and business models are changing so fast.

Incubator 180

Incubator Angel Investor Dilution Equity 180

The Equity Kicker

NOVEMBER 17, 2014

All that said, within reason more runway is better and if you can get extra cash at an acceptable dilution it’s usually worth doing. Important caveat: if you do raise a large seed round don’t ramp the burn too much before you’ve found a repeatable business model. Startup general interest Venture Capital'

Venture Capital 135

Venture Capital Dilution Portfolio Business Model 135

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Austin Startup

FEBRUARY 13, 2019

Not necessarily the entire business, but at some point, something will fail and you’ll either learn from it and grow or it will be the beginning of the end. Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Startup Professionals Musings

SEPTEMBER 5, 2016

The reality is that over 80 percent of new businesses will never attract venture capital or Angel funding, according to experts , and there are many good reasons for skipping that painful and distracting process. Don’t let early funding increase risk and dilute your potential. Outside funding is not a startup entitlement.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

David Teten

JANUARY 21, 2021

V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Capacity Capital , based in Chattanooga, Tennessee, was launched in 2020 with a primary focus on the Southeast. GCVF is pioneering the future of venture capital and high growth startups for all small communities.

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

MARCH 7, 2015

On the other hand, venture capital organizations typically look for needs that exceed $2 million. What business milestones have you met? If your financial model projects a negative cash flow in this period of $400,000, you should buffer this amount by 25 percent, and ask for $500,000.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

VC Cafe

FEBRUARY 27, 2024

To reduce the impact of dilution, the expectation is that startup valuation should more or less double between the pre-seed to the seed, and seed to series A (ideally backed by reasonable traction/ revenue multiples). That’s yet another reason for micro funds to move earlier in the fundraising timeline.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Tim Keane

JANUARY 12, 2010

  I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] and walked through each proposed term and why it is or isn’t important.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

VC Cafe

SEPTEMBER 26, 2010

It doesn’t mean that you should change your business model because one person suggested it, but listed to the feedback and if you see similar patterns over and over again, make changes. Patents are nice but… in a consumer Internet business, it’s most likely that you aren’t re-inventing the wheel.

Elevator Pitch 103

Elevator Pitch Incubator Technical Review Startup 103

David Teten

AUGUST 21, 2019

Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? From the founders’ point of view, the advantages of the RBI model are: Greater control over the company. Less or no dilution. Focus on lower-risk business models; no requirement for a ‘swing for the fences’ model.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Up and Running

APRIL 24, 2018

If you’ve never written a business plan before, take a look at these sample medical startup business plans. At first, you need to focus on developing your business model and validating it. However, you can certainly raise some of the capital through bootstrapping and the rest via seed funding.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

Both Sides of the Table

SEPTEMBER 12, 2010

They are at the tops of their classes and want to get into private equity or venture capital some day. So to me they are really just diluting the power of their brands but because many of them have never been entrepreneurs they probably don’t even realize it. I have nothing against these young people – the dialers.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Version One Ventures

SEPTEMBER 12, 2017

And so, we keep hearing how venture capital is about to be disrupted. Decentralized platforms are a mix of a new technology and a new business model. But the tokenization of decentralized business models makes these projects immediately liquid assets: you can buy and sell at any stage (assuming enough liquidity).

Venture Capital 164

Venture Capital LP Dilution Limited Partner 164

Austin Startup

MARCH 23, 2017

Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders. Given that the rumors of this venture bubble popping are now several years old, it’s become clear that founders can succeed with different business models.

Dilution 54

Dilution Equity Warrant Distribution 54

Professor VC

JANUARY 17, 2008

While currently free to angel groups, their business model revolves around aggregating the angel investment data. If my math is correct, this is approximately a 31% IRR, which has to beat individual angel investments on aggregate and venture capital returns over the period of the study (1990-2007). Venture News.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

This is going to be BIG.

APRIL 20, 2012

Answer: After your business model makes boatloads of money. :). Ok, well, short of that, this is one of the questions I get most and here's what I've noticed about venture raise timing. There seems to be three windows, each with their own pros, cons and complications. I think this is great advice.

Dilution 148

Dilution Business Model Mobile Entrepreneur 148

Cracking the Code

OCTOBER 12, 2012

While our investment focus covers all of Europe, we consider France to be a very important market for our business and we are actively seeking new investment opportunities. France is indeed a country with a proven track record of developing innovative business models.

France 71

France Europe Capital Gains Dilution 71

Professor VC

JUNE 20, 2011

I took a look back at our original financial model we presented to VCs in 2004. The business model (OEM through broadband and home security companies for mass distribution) if not specific product functionality has remained largely the same. The Most Important Venture Capital Statistic. So what does this all mean.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

www.paulgraham.com

OCTOBER 23, 2010

Microsofts originalplan was to make money selling programming languages, of all things.Their current business model didnt occur to them until IBM droppedit in their lap five years later. They get the same kind of stock and get diluted the same amount in futurerounds. Theyre not something you couldhand to someone else to execute.

Startup 105

Startup Cofounder Software Stock 105

Professor VC

DECEMBER 8, 2015

one company running out of cash and another with cash but searching for a business model). Often times those involve trading within a venture capital portfolio or between two venture firms portfolios. But what about the case where both companies are well capitalized and doing well?

Merger 28

Merger LP IPO Redemption 28

Both Sides of the Table

FEBRUARY 14, 2016

Put simply, it’s really hard to build a strong company when all of your competitors are giving away free s**t fueled by venture capital chasing winner-take-all returns. Plus, down rounds trigger anti-dilution provisions. Just as with the late 90s there is no new “business model” that defies the laws of gravity.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

We want every entrepreneur to have access to our curriculum and incubation services, and give them an opportunity to build their businesses, irrespective of the scale of their entrepreneurial aspirations. The latter is the domain of venture capital, but the former is what we need to build the foundation for Capitalism 2.0

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116

Up and Running

DECEMBER 9, 2014

If you’re looking for five million dollars, you should be thinking institutional capital. You have to focus on for the nuts and bolts, what is the business model, how are we going to make money. As a business owner, the most valuable asset you have is your time so there’s an inherent compromise there.

Small Business 95

Small Business Finance Forecast Metrics 95