Startup Professionals Musings

JULY 14, 2014

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Apply for contests and business grants. Set expectations accordingly. Use crowd funding.

Entrepreneur 283

Entrepreneur Intellectual Property Technical Review Incubator 283

Startup Professionals Musings

JULY 1, 2017

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Apply for contests and business grants. Set expectations accordingly. Use crowd funding.

Product Development 177

Product Development Cost Developer Product 177

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. Equity investors.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

FEBRUARY 19, 2013

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Apply for contests and business grants. Set expectations accordingly. Use crowd funding.

Intellectual Property 309

Intellectual Property Technical Review Venture Capital Startup 309

Startup Professionals Musings

JANUARY 12, 2018

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity. Join a startup incubator.

Intellectual Property 134

Intellectual Property Technical Review Startup Incubator 134

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

JULY 8, 2015

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity. Join a startup incubator.

Entrepreneur 120

Entrepreneur Intellectual Property Technical Review Incubator 120

Up and Running

SEPTEMBER 19, 2017

When you accept outside money, particularly a private equity (PE) investment, however, that changes. In this article, I’ll provide some personal stories of how investors have navigated the balance between raising private equity capital and not losing control of their startup. You make all the decisions, when you want, how you want.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

David Teten

AUGUST 19, 2019

Does the traditional VC financing model make sense for all companies? I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. However, only recently have early-stage companies started to use this model at any scale. . Absolutely not.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

www.startuplessonslearned.com

MAY 4, 2012

Founders Dilemmas: Equity Splits. Noam is one of a rare breed of business academics: he studies entrepreneurship using a rigorous empirical approach. The following is an exclusive excerpt which sets up a common pitfall regarding equity splits. Lessons Learned. by Eric Ries. Tuesday, April 24, 2012. Uncertainties abound.

Equity 72

Equity Founder Technical Cofounder Cofounder 72

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Unlike many RBI investors, a full 50% of our investment activity is in non-tech businesses.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

OCTOBER 5, 2015

I challenge any entrepreneur, for example, to define the difference between "seed-stage" and "early-stage" financing. Asking for early-stage money before you have customers and revenue will likely kill your credibility with real investors. Business accelerator funding.

Seed Stage 120

Seed Stage Finance Early Stage Startup 120

genylabs.typepad.com

SEPTEMBER 24, 2011

Working for Equity Instead of Cash. has an article on service firms waiving their fees and instead taking equity in their clients. Interest in this waned when the Internet bust resulted in most tech start-up equity becoming worthless, but it seems to be coming back. Not all start-up stock is created equally.

Equity 40

Equity Technical Review San Jose Stock 40

www.inc.com

SEPTEMBER 24, 2011

Small Business Success | Mondays and Thursdays. The Goods: Your Business Toolbox | Thursdays. Finance | Tuesdays. Todays Small Business News | Daily. Financing a Small Business. Buying a Small Business. RUNNING A BUSINESS. Financing A Small Business. Business Taxes.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Board Effect

DECEMBER 19, 2019

In preparation to have a board discussion about strategy, board directors should collect and analyze data related to the industry’s environment, the nature of the competition, and the business models. Questions may arise that require boards to make new decisions about debt and equity that affect the capital structure.

Management 64

Management Software Review Acquisition Merger 64

Austin Startup

FEBRUARY 13, 2019

Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. Some came from angel investors, but we also sought out industry experts to be early contributors in this stage, which leads me to tip number three.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. Put aside the frauds and hucksters — time and transparency will cause them to shake out — and obviously not every business model is a fit for an ICO. But many are. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. Put aside the frauds and hucksters — time and transparency will cause them to shake out — and obviously not every business model is a fit for an ICO. But many are. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Up and Running

DECEMBER 23, 2019

One of the most important decisions a new business owner can make is how they’re going to finance their venture. . Bootstrapping, saving funds over years, borrowing from friends and family, taking out a bank loan and pitching investors are all viable options, but some will work better than others for your specific business. .

Finance 92

Finance Sweat Equity Bootstrapping Entrepreneur 92

Startup Lessons Learned

APRIL 24, 2012

." - Eric The following is an exclusive excerpt which sets up a common pitfall regarding equity splits. In Noam’s dataset, 73% of founding teams split equity within a month of founding, a striking number given the big uncertainties early in the life of any startup. But such a best-case approach is hazardous.

Equity 168

Equity Founder Cofounder Vesting 168

ReadWriteStart

SEPTEMBER 10, 2010

Whether it is credit or equity, funding is very, very tight. VCs ONLY want to invest in momentum deals, which means you already have serious customer validation and traction and you are looking to raise money to scale your business. I call it drip-financing. In 1M/1M, our preferred financing strategy is customers.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

David Teten

JANUARY 21, 2021

V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020.

Equity 78

Equity Revenue Cofounder Colorado 78

Growthink Blog

MAY 10, 2012

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. The five main stages include the following: 1. Early Stage Investment (Series A & B) 4. Pre-Seed Funding 2.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Startup Professionals Musings

SEPTEMBER 5, 2016

You don’t have to fight for your equity, and no one can slow you down in decision making. A limited budget makes for a better business plan. Investors expect nothing less than a full-time commitment, even in the early stages when the business model has not yet been proven.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

K9 Ventures

SEPTEMBER 8, 2015

What everyone can agree on, though, is that there are definitely more seed and early stage funds now than ever before, and more people willing to give money to young companies looking to make it big. Direct Revenue, meaning no three-way business models and no advertising, media, or content. Frighteningly Early.

San Francisco 48

San Francisco Early Stage Portfolio Software Engineering 48

VC Cafe

FEBRUARY 27, 2024

While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. Pre-seed rounds accounted for 14% of all seed stage deals in 2023, up from just 5% in 2020 according to Pitchbook data and I predict it will be even higher in 2024. Seed is about showing initial product market fit.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Steve Blank

DECEMBER 30, 2014

. ———– The National Institutes of Health recognizes that Life Science/Health Care commercialization has two components: the science/technology, and the business model. The Lean Launchpad® for Life Sciences (the I-Corps @ NIH ) uses the Lean Startup Model to discover and validate the business model.

San Diego 261

San Diego North Carolina Chicago Lean 261

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? But should they?

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

ReadWriteStart

FEBRUARY 18, 2020

But that doesn’t mean that you need to give away equity in your business or seek out external funding. During the early stages of your business, it’s possible to rely on credit cards and the personal savings of startup founders as you get things up and running. Consider Outsourcing.

Bootstrapping 145

Bootstrapping Startup Cofounder Angel Investor 145

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Austin Startup

AUGUST 20, 2017

Early stage startups have to survive one day at a time and are often presented with limited choices of the moment that enable them to continue. At early stages you probably don’t have an assembly line and can’t clearly define any particular job. But, later on they often wish they had the ability to erase many of them.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

YoungUpstarts

OCTOBER 18, 2016

Make no mistake, starting your own business is indeed gratifying that way, but not all startups are an escape from a regular job. The business model and investors play a critical role in shaping the independence and work-style of an entrepreneur. Investors are much more than just people putting up money in exchange for equity.

Startup 100

Startup Equity Bootstrapping Early Stage 100

Professor VC

JANUARY 27, 2011

I strongly believe (at least for very early stage technology ventures) that you will get diminishing returns and arguably negative returns once you get past an initial threshold of team, product, market and financial diligence. I also teach Entrepreneurial Finance at San Jose State. Not exactly extensive diligence.

Technical Review 31

Technical Review Due Diligence Silicon Valley San Jose 31

Gust

JULY 19, 2012

My personal guess is that the early stage funding world will likely trifurcate (or even quadricate, if that’s a word) into several distinct groups. 1) Non-equity, creative project crowdfunding portals, which are currently allowed and are not subject to legislation under the JOBS Act.

Accredited Investor 144

Accredited Investor SEC Equity Early Stage 144

Altgate

SEPTEMBER 16, 2010

The presentation was on outsourcing generally, not just software engineering and the audience was very early stage companies (some yet to be founded). Now, for very early stage companies, you may be thinking, “I don’t have any cash, so outsourcing isn’t an option.&# To that I say baloney. Advertising.

Software Review 65

Software Review Offshore Startup Boston 65

Transformify

JULY 23, 2018

It is a grant, not an equity funding. The startups are not selling equity or issuing new shares. The good news is that startups from all sectors of the economy can apply and leverage on novel combinations of existing business models and technologies. What is your current stage of development? Why non-dilutive?

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66