Startup Professionals Musings

AUGUST 17, 2014

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Here are some basic “rules of thumb” that every Angel or venture capital equity investor uses, to help you anticipate their reactions.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Startup Professionals Musings

MAY 28, 2013

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Here are some basic “rules of thumb” that every Angel or venture capital equity investor uses, to help you anticipate their reactions.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Startup Professionals Musings

JULY 27, 2018

Business model showing costs, pricing, and margins. Specific investment size request, and equity offered. Every investor pitch must include the size of the desired investment, followed by the percentage of equity offered, thus supporting a realistic valuation today. Discussion of likely liquidity events and exit strategy.

Product 145

Product Intellectual Property Liquidity Event Valuation 145

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Email readers, continue here…] Most VC’s look for a 10x opportunity – that is – a ten times increase in the valuation from investment to liquidity event.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Gust

AUGUST 10, 2014

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Here are some basic rules of thumb that every Angel or venture capital equity investor uses, to help you anticipate their reactions.

Liquidity Event 176

Liquidity Event Equity Venture Capital Exit Strategy 176

Startup Professionals Musings

FEBRUARY 13, 2016

The business model has to clearly define who is your customer, market penetration expected, how much customers pay versus total costs and the investment required to sustain cash flow. How big is the funding request, and how much equity will you give? Quantify founder investments, both cash and sweat-equity.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

View from Seed

MAY 19, 2015

Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership. A flourishing startup requires investing equity in others to generate substantial return.

Seed Stage 120

Seed Stage Liquidity Event Cofounder Startup 120

Startup Professionals Musings

MAY 18, 2015

Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. No investor pitch should end without asking for a specific amount of money, providing some details on how that money will be used and what equity in the company you are offering in return.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

AUGUST 13, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

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? Lower processing cost.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

MAY 13, 2011

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

The Next Web

MARCH 2, 2014

This process included several rounds of financial forecasting to understand the cost of achieving where we wanted the business and brand to be, and whether we could pay for that cost ourselves. Should we finance with debt or equity? What are the main considerations when exploring third-party investments?

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Gust

SEPTEMBER 5, 2012

Convertible equity? The new form of convertible security or “convertible equity” is essentially a convertible note containing most of the usual terms — except it’s been stripped of the features that would make it a loan. How to finance a new seed-stage startup? Convertible debt?

Finance 134

Finance Convertible Security Equity Seed Stage 134

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Hunter Walker

AUGUST 24, 2014

Did I work any less hard the next day because of my liquidity event? I conjecture there’s a secondary benefit to managed liquidity for founders: it may help diversify founder populations. The opportunity cost of a startup in forfeited salary and in-the-money equity at larger tech companies can be considerable.

Founder 108

Founder San Francisco Liquidity Event LP 108

Gust

AUGUST 5, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Startup Professionals Musings

AUGUST 29, 2018

Crowdfunding may look easy, via popular sites like Kickstarter and Indiegogo, but their cost in time, effort, and money by entrepreneurs is daunting. In fact, there are many types of crowdfunding, including donations, reward, pre-orders, loans, and equity. Payoff after a liquidity event is difficult and unpredictable.

Equity 180

Equity Due Diligence Angel Groups Liquidity Event 180

A Crowded Space

AUGUST 26, 2013

Note: for this article I am referring to equity crowd-funding exclusively. The crowd option brings - simplicity, speed, low cost, transparency, and, in theory, means taking money from anyone willing to write a check. Let’s look more broadly at later-stage equity financing. … as an asset class. Investor Selection.

Later Stage 87

Later Stage Liquidity Event Equity Vertical 87

Startup Professionals Musings

APRIL 22, 2010

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

The Next Web

OCTOBER 7, 2013

Layer on the opportunity cost of choosing not to pursue lucrative alternatives offered elsewhere, and it’s easy to see how, if not under the right terms, the engineer #1 position is less than appealing. Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp.

Engineer 129

Engineer Dilution Option Pool Vesting 129

The Next Web

SEPTEMBER 29, 2013

Investors are always thinking about growth mode because that’s the path to where they want to go – liquidity event. Some metrics that I like to look for are: Lifetime value of a customer, average revenue per buyer, cost of a paying customer, registration rates, etc. How do you do that? Your company will die. Tough situation.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. The Flipper’s executives usually have significant equity holdings, either actually owned or reflected in stock options.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Berkonomics

SEPTEMBER 10, 2015

In contrast, this local company had been built on something around $1 million in equity. This one ends up costing most entrepreneurs and their investors a lot of money, because most of the time CEOs and boards wait until it’s pretty clear that the company’s value has peaked before starting the exit process.

Vertical 48

Vertical Finance Valuation Global 48

Hearpreneur

OCTOBER 29, 2017

With annual healthcare expenditures for conditions that either have an underlying cellular degeneration or damage component, now surpassing $7 trillion globally, Bioquark’s platform makes the company an attractive candidate for high-value strategic transactions and liquidity events for investors. Thanks to Ira S.

Entrepreneur 73

Entrepreneur Social Media Liquidity Event Private Equity 73

Both Sides of the Table

MARCH 3, 2013

Obviously that barrier has been brought down with low-cost ability to capture, stream and distribute content over the Internet. He talked about a unique model where you don’t have to become liquid in venture capital and can target singles & doubles. New company in Boston with a model called “royalty capital.”

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

abovethecrowd.com

APRIL 20, 2016

In Silicon Valley boardrooms, where “growth at all costs” had been the mantra for many years, people began to imagine a world where the cost of capital could rise dramatically, and profits could come back in vogue. Moreover, once high-flying startups began to struggle on the fundraising trail. ” Go public.

IPO 40

IPO Term Sheet Valuation Silicon Valley 40

www.quora.com

JANUARY 16, 2011

Someone who is egotistical enough to call themselves a rockstar, yet humble enough not to want 99% of the equity? Just go to a meetup or post an ad promising equity. What did you take from idea on the back of a napkin to liquidity event? This person does not exist. Now we turn it around. What companies have you launched?

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42

VC Cafe

NOVEMBER 9, 2011

Below we bring you the main soundbites from the event: Larry Leibowitz took the lead: ‘In 2010, there were $270 billion awarded to IPOs; but in the first 9 months of 2011, IPOs only generated half that much. The US markets have generally proven themselves as giving better valuations, and long term liquidity.”. “If Also more expensive.

IPO 92

IPO Cofounder Europe 92

www.vccafe.com

MARCH 11, 2013

tells you how much adwords cost. hire low-cost international engineering talent. YCombinator Series AA Equity Financing Documents. Founder Equity Issues. Venture Hacks equity section. Legal, Equity, etc. Argonaut Private Equity. Find the top ten keywords ranking to your websites. SEMRush â??

Software Review 53

Software Review Technical Review Startup 53