Startup Professionals Musings

APRIL 27, 2019

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Technical Review 255

Technical Review Dilution Early Stage Product Development 255

Startup Professionals Musings

AUGUST 4, 2014

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and venture capital investors are brought in.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Startup Professionals Musings

APRIL 23, 2017

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Customer 191

Customer Entrepreneur Technical Review Dilution 191

This is going to be BIG.

JANUARY 18, 2024

Still, there are a lot of downsides to taking venture money—the push to grow at all costs, our desire to be all up in your business, literally, and sometimes, we’re kind of obnoxious. It will save everyone a lot of cost and time. You’re going to suck compared to an alternative player and you’ll undoubtedly cost your team wins.

.Net 88

.Net Cap Table Startup Technical Review 88

Both Sides of the Table

MARCH 19, 2013

If you’re an early-stage enterprise startup services revenue is exactly what you need. The most important way to sell a product for an early-stage business (or frankly any stage) is to have strong referenceable customers. It’s Profitable Revenue Covering Your Fixed Costs. Let me explain why: 1.

Technical Review 403

Technical Review Software Review Startup API 403

Startup Professionals Musings

DECEMBER 18, 2013

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Entrepreneur 252

Entrepreneur Marketing Technical Review Dilution 252

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. The only thing worse than your early-stage company buying another early stage company is you trying to pull off a merger of equals. Want to sell early? how to cut redundant costs. -

Merger 276

Merger Technical Review Early Stage Dilution 276

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders. Uncategorized company equity dilution founder investors startup'

Dilution 150

Dilution Equity Vesting Stock Options 150

Startup Professionals Musings

AUGUST 24, 2016

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as Angel and VC investors are brought in. Amount of venture funding provided.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

Startup Professionals Musings

OCTOBER 17, 2022

The cost of entry for tech startups continues to go down. Twenty years ago, it cost several million dollars to launch an e-commerce startup, which can be done today for a few thousand dollars. Mobile and web software apps may cost even less. The large investment amounts preferred by VCs are no longer needed to launch winners.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

ReadWriteStart

JUNE 1, 2020

It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. These usually play a role in the very early stage of your business, primarily pre-revenue. Early-stage. An early-stage investor usually looks at a return of 10 to 15 times.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

NOVEMBER 10, 2012

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Startup 254

Startup Technical Review Dilution Early Stage 254

YoungUpstarts

OCTOBER 24, 2013

“The reality is that there has not been a reliable, simple, or cost-effective way to calculate an early stage company’s valuation – which is why so many entrepreneurs and angel investors get it wrong,” says Alan Lobock, co-founder of Worthworm.

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. As companies get this initial customer feedback on their product they start to have to ask harder questions about unit economics: How much does it cost us to acquire a new customer?

Operations 286

Operations New York City Technical Review Startup 286

YoungUpstarts

JULY 31, 2019

Billions of dollars are being poured into companies that have yet to clear the value chasm, as entrepreneurs use early traction that isn’t necessarily financially-oriented, but shows a certain level of uptick or success, to raise capital and convince early stage investors that their horse is the one to bet on.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

Startup Professionals Musings

APRIL 12, 2021

In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process. Don’t let your passion and “can-do” attitude convince you that you can overcome all financial realities.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Startup Professionals Musings

SEPTEMBER 13, 2011

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

David Teten

JANUARY 19, 2021

Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder. That said, nothing is cost-free. More complex cost of capital calculation. Flexible VC can allow Impact VCs to thread this needle.”.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

DECEMBER 11, 2022

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Austin Startup

JULY 6, 2018

Ask the Users Startup Accelerators: Bundled and Unbundled Over the past several years, accelerators have emerged as a powerful filtering and signaling mechanism in early-stage startup ecosystems, allowing high-potential young startups to connect with investors, advisors, and other strategic partners far faster and more efficiently than before.

Dilution 48

Dilution Startup Technical Review Equity 48

Startup Professionals Musings

AUGUST 27, 2010

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers.

Startup 227

Startup Technical Review Dilution Early Stage 227

Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company). If your costs are largely fixed (equipment, offices, inventory) then be extra careful.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

View from Seed

APRIL 30, 2015

It can be lower cost and can either buy more time or accelerate growth. It’s generally got a lower cost compared to equity capital and can help support growth. NVV: Let’s talk about the seed stage specifically. But the costs are definitely there. What is it, and how should founders think about it?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

JANUARY 19, 2020

The cost of entry for tech startups continues to go down. Twenty years ago, it cost several million dollars to launch an e-commerce startup, which can be done today for a few thousand dollars. Mobile and web software apps may cost even less. The large investment amounts preferred by VCs are no longer needed to launch winners.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

Both Sides of the Table

SEPTEMBER 25, 2010

I talked about this in my social proof post where I gave some suggestions about how to get the early guys off of the fence. Most early-stage entrepreneurs who have worked with me (either as an angel or as a seed VC) know that I don’t rely at all on the social proof of other investors. When I’m in, I’m in.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Startup Professionals Musings

MARCH 14, 2020

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

This is going to be BIG.

NOVEMBER 28, 2021

In fact, it’s why many startup folks leave the early stage world to go over to the big company side—because the benefits tend to be much better. How about paying into childcare costs, adoption, or IVF too? Take a little more dilution, raise a little more money, and spend on the most ignored personal goal in the market.

Hiring 179

Hiring Early Stage Marketing Term Sheet 179

View from Seed

JULY 15, 2020

Some early stage businesses may even be able to get to CFBE fairly quickly. Mid-stage portfolios can be more acutely impacted if many companies have fat cost structures and were investing heavily in growth that is not materializing. Other companies are great businesses, but are effectively encountering a dilution event.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Early-stage valuations are up 70%, and late-stage valuations are up 103% (source Pitchbook ).

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Early-stage valuations are up 70%, and late-stage valuations are up 103% (source Pitchbook ).

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Berkonomics

JANUARY 27, 2022

Raising too much too early dilutes the founder interest to unacceptable levels. In recent years, I have counseled founders to raise enough to accelerate to a significant milestone that is over a year away, and to scale the business to find breakeven with two early rounds if possible. So, here’s the rub.

Dilution 62

Dilution Strategic Investors Early Stage Hosting 62

Austin Startup

FEBRUARY 13, 2019

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. 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

Both Sides of the Table

JULY 25, 2010

Rincon is part of the new breed of Seed Stage VCs and with the leadership of Jim Andelman has charted out the most authentic early-stage investment strategy in Southern California. Any SoCal entrepreneur raising early-stage money should put Rincon on their short list.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Both Sides of the Table

JUNE 5, 2015

In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. So how DOES a VC think about financings at early stages? Option pool (likely dilution in the future, which is a function of a higher price just not yet defined).

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

David Teten

AUGUST 19, 2019

Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Repaid 12-36 months with ability to prepay at reduced cost. GSD Capital. “ GSD Capital partners with early-stage SaaS founders to fund growth initiatives. Rational burn profile, up to 50% of revenue at close, scaling down.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

DECEMBER 27, 2014

The cost of entry for tech startups continues to go down. Twenty years ago, it cost several million dollars to launch an e-commerce startup, which can be done today for a few thousand dollars. Mobile and web software apps may cost even less. The large investment amounts preferred by VCs are no longer needed to launch winners.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260