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

David Teten

JANUARY 19, 2021

Every Flexible VC structure allows founders to access immediate risk capital while preserving exit, growth trajectory, and ownership optionality. . Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

The Equity Kicker

MARCH 17, 2015

It used to be that access to money was restricted to a few privileged individuals and simply getting money was an achievement, even for the best companies. Big picture this increased capital efficiency is great for entrepreneurs because they suffer less dilution, but it does mean they have to do things they aren’t skilled at.

Early Stage 60

Early Stage Venture Capital San Francisco Silicon Valley 60

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

JANUARY 9, 2014

I recently developed a more human framework for early-stage startups to define their startup DNA and lay some foundations for a sustainable business. By trying to appeal to everyone and adding features left, right and centre, you will actually dilute your message and could end up with a complex, bloated product.

Early Stage 102

Early Stage Startup Cofounder Design 102

Haystack

JULY 8, 2018

So, that’s why I’m writing this short post specifically for 1) employees of early-stage startups and 2) the earliest investors in these startups, who are often themselves new to the entire sector. And as a disclaimer, 1) I am figuring this out myself in real-time. Maybe I have a 1-2 year headstart.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

David Teten

AUGUST 19, 2019

Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Additionally, portfolio companies are able to access competitive and often non-dilutive financing by monetizing an unavoidable expense that is being paid to its current processors, thus yielding a mutual benefit for both parties.

Revenue 60

Revenue Technical Review Software Review Equity 60

Haystack

AUGUST 18, 2019

Despite that lack of experience, I am fortunate in that I have direct access to many of the greatest VC leaders and franchises for mentorship and guidance. 4/ Orthogonal Competition – I recently tweeted about a new breed of early-stage technology investor that has its roots in public equities (hedge funds, long/short, etc.)

Seed Stage 108

Seed Stage Cap Table Early Stage Malaysia 108

Up and Running

JULY 14, 2015

An early stage startup will want to access funds to help further validate its business proposition. Before any fundraising, it is important to set out what your parameters are for things like valuation (hence dilution), and terms that you would deem okay, versus those that you would consider as being too much from an investor.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

The Next Web

JANUARY 24, 2014

Ninety-four percent of households are equipped with a computer and have Internet access (the others are still playing 8-bit Nintendo). According to the Global Entrepreneurship Monitor the Dutch outperform the EU big five in terms of early stage entrepreneurial activity. The Dutch are an entrepreneurial bunch. How to fix this?

Netherlands 143

Netherlands Technical Review Stock Silicon Valley 143

Both Sides of the Table

APRIL 27, 2014

Seed investors are aplenty and of course they need downstream money to fuel their early-stage bets. If we got an offer to raise $25 million to grow would she take it or be too worried about exit price, dilution, valuation expectations, etc. And we live in public so many people are able just to reach out.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

Both Sides of the Table

MAY 30, 2018

These are straightforward questions, the answers will have no bearing on your ultimate success and if you want to know the truth most VCs have access to databases like Pitchbook that have all of this information anyways. Many VCs will have a distribution curve where they’ll do a small number of early-stage deals (say $1.5–3

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Austin Startup

DECEMBER 7, 2017

There are two problems with early stage investing: telling how much a company is worth when truthfully, it is still worthless; and helping early-stage companies protect themselves from over dilution when they are, effectively, worthless. This begs the questions, what is a SAFE note, and why use it?

Covenant 48

Covenant Cap Table Early Stage SBA 48

Both Sides of the Table

MAY 9, 2011

Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Give them access to all confidential information. I wrote about many of the early-stage startup mistakes here. Vested over 4 years. If you ever fall out of love you have a pre-nuptial agreement.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Hunter Walker

JANUARY 15, 2016

Social benefit companies also have access to impact investors which can provide 6 & 7 figure zero-dilution grants, which are an early stage secret weapon. To find my perfect fit I logged over 50 meetings with all the people I knew and respected in the greater tech industry and laid out my thesis to each of them.

Technical Review 48

Technical Review Startup Cofounder SMS 48

The Startup Magazine

DECEMBER 14, 2017

But failing to commit the time this part of the project requires in the early stages means you risk coming up with a far better branding concept somewhere down the line and feel compelled to change it, diluting your original brand. A solid security strategy.

Entrepreneur 61

Entrepreneur Cloud Startup Security 61

Occam's Razor

MAY 2, 2017

The very best analysts distill, rather than dilute. All I have access to is just a cursory review of their digital existence. There are lots of micro-outcomes, in this case given most Pharma companies are still in the early stages of savvy, I choose something close to making money, Doctor Lookups.

Metrics 141

Metrics Acquisition eCommerce Analytics 141

Rob Go

JUNE 8, 2014

Raising capital is really difficult, no matter what people say about the influx of seed and early-stage dollars into the startup eco-system. Getting access to a breadth of network and resources is pretty helpful in the early stages of a company when you are under-resourced and have no scale.

Dilution 69

Dilution Early Stage Angel Investor Venture Capital 69

Transformify

JULY 23, 2018

To boost innovation and SME sector growth, the EU Commission has launched the SME Instrument of the Horizon 2020 program – the largest non-dilutive fund in the world. Why non-dilutive? Do you have access to networks, supporters, advisors, etc.? EUR 3 billion are available to fund a maximum of 7,500 startups by 2020!

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66

A Crowded Space

MAY 18, 2017

1) Access Fallacy - the BS theory can only work if an investor has access to invest in any and all private companies. This is fundamentally why Vanguard works in the public markets with unrestricted access and why there is no Vanguard of the private markets. Just FYI - Vanguard now has 2T under management).

Seed Stage 60

Seed Stage Portfolio Venture Capital Valuation 60

The Equity Kicker

MARCH 14, 2012

It will have got you access to cash and other resources that will have helped you build your business. The more money a company has raised, the more the founders will be diluted and the investors will have proportionately greater formal and legal rights to control the company and influence operations.

Venture Capital 104

Venture Capital Dilution Early Stage Equity 104

abovethecrowd.com

APRIL 20, 2016

Competition also has access to capital. Never in the history of venture capital have early stage startups had access to so much capital. It will also minimize future dilution. The pitches typically involve phrases such as “you are invited to” or “we will provide access to” an opportunity to invest.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

SVPG

OCTOBER 22, 2015

Part of what causes confusion is a dilution of what is really meant when we call something a “product” or “product-quality” or “productized” or “live in production." I always try hard to reserve this use of the product term to describe the state where we can actually run a business on this.

Engineer 60

Engineer Dilution Software Early Stage 60

www.payne.org

SEPTEMBER 22, 2011

3 Dilution. The total preference is less of an issue in early stage companies (e.g. However, it can be a significant issue in later stage companies that have raised a lot of money. Those new shares are created out of thin air by the company, and will dilute all of the current stockholders. diluted) terms.

Equity 56

Equity Employee Vesting Preferred Stock 56

Venture Chronicles

AUGUST 23, 2013

5) Board management: My point here is not about criticism of investors because at the end of the day what investors provide above all else is access to capital, and point in fact their motivation is ultimately pure, which is they are in it to make money. well a lot of things can derail the best laid plans.

Management 66

Management Startup Liquidation Preference Dilution 66

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. At the same time, early-stage companies are thinking beyond the high prices of Silicon Valley to put down roots and find financing and growth partners.

Texas 90

Texas San Antonio Houston Dallas 90

Up and Running

DECEMBER 9, 2014

The pro is that it’s cheap capital and it’s not diluted. With equity [crosstalk 00:53:53] capital well sometimes you can bring great investors around the table who will be value add and provide insight that you may not otherwise have been able to have access to as you grow your business. My name is John Bates.

Small Business 95

Small Business Finance Forecast Metrics 95

Life Beyond Code

SEPTEMBER 27, 2011

Once the $1 million revenue milestone is crossed, entrepreneurs find it easier to find additional customers, manage working capital, and access funding, whether it is credit or equity. In my roundtables, the vast majority of entrepreneurs I work with are in this rather vulnerable pre $1 million revenue stage.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116