Startup Professionals Musings

APRIL 23, 2012

Providing the major funding source for an early-stage startup is a totally different dimension, but it usually trumps all the items above in demanding some equity. For purposes of commitment and business decision making, I always recommend that execution partners retain control of at least 50% of the equity.

Intellectual Property 252

Intellectual Property Equity Cofounder CTO Hire 252

Startup Professionals Musings

DECEMBER 11, 2022

After many years of working with angel investors seriously trying to find new ventures worthy of their hard-earned money, I find their frustration often exceeds that of entrepreneurs sincerely looking for financial help. They are not interested in research and development, or funding at the idea stage. Lack of intellectual property.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Startup Professionals Musings

APRIL 27, 2019

Moore titled “ Crossing the Chasm ,” but most entrepreneurs have no idea how it relates to them. 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. Product development chasm.

Technical Review 255

Technical Review Dilution Early Stage Product Development 255

Startup Professionals Musings

AUGUST 4, 2014

Because these considerations can be quite complex, very emotional and have long-term implications, smart entrepreneurs don’t hesitate to get some legal advice at this early stage, in drawing up an agreement document to be signed by each of the co-founders. business entrepreneurs startups' But don’t get greedy.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Both Sides of the Table

MAY 28, 2018

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. One entrepreneur refrain I sometimes hear is “We want to raise some extra money for M&A activities.” It goes something like this … VC: “How much money are you raising?”

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Startup Professionals Musings

SEPTEMBER 13, 2011

Moore titled “ Crossing the Chasm ” (1991), but most entrepreneurs have no idea how it relates to them. 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. Product development chasm.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

David Teten

DECEMBER 2, 2019

I’m now researching non-dilutive funding for Action Tank , a startup I’m gestating to “Make America Functional Again”. I worked with outsourced research firm Wonder * to identify all of the institutions we could who support tech impact startups with cash and community, and in many cases without dilution. Aspen Tech Policy Hub.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

OCTOBER 12, 2014

These tensions seep out in some angels or seed funds publicly or semi-privately deriding later-stage VCs for their “bad” behavior. I have seen bad behavior from later-stage VCs, believe me. But I have seen equally bad behavior from super early stage investors. What a second, what about entrepreneurs?

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

AUGUST 3, 2010

There is a telltale sign of an inexperienced startup entrepreneur. How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. I’m doing due diligence on a company of another entrepreneur in LA whose company was apparently doing very well. Want to sell early?

Merger 276

Merger Technical Review Early Stage Dilution 276

The Startup Magazine

MARCH 14, 2022

India has always been renowned as the land of entrepreneurs. At this stage, the founder mainly raises funding from their sources or family and friends. If you are one of the fortunate early-stage investors to be presented with such an opportunity, it could lead to rewarding returns. 2) Seed funding.

Technical Review 138

Technical Review Due Diligence India Startup 138

Startup Professionals Musings

JUNE 13, 2020

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

Startup Professionals Musings

AUGUST 24, 2016

I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. Of course, all co-founders need to remember that allocated percentages will be diluted as Angel and VC investors are brought in. The CFO may have a major financial background, but might be a minority owner.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

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

JULY 22, 2010

And for some strange reason entrepreneurs didn’t share this information. I’ve started from day one trying to build total transparency into my process with entrepreneurs. This starts with understanding how VCs and entrepreneurs often see valuation differently. Back then VentureHacks didn’t exist.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

SEPTEMBER 17, 2011

I recently wrote a post about why I didn’t think early-stage startups should have COOs. I’d say about 80% of the experienced entrepreneurs & VCs I know privately agreed with me. Dilute your cash, equity or both. In summary, tons of early-stage M&A is driven by only one thing: CEO ego.

Operations 292

Operations CTO Hire Startup Early Stage 292

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. That it is non-dilutive financing? We only want software revenue.”

Technical Review 403

Technical Review Software Review Startup Churn Rate 403

David Teten

JANUARY 21, 2021

VI: Revenue-based financing: The next step for private equity and early-stage investment. Jonathan Bragdon , CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments of $50-$300k in post-startup, post-revenue businesses planning to 2X revenues in 12-24 months.

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

OCTOBER 17, 2022

This can cause early investor dilution, lower ultimate returns or leave the startup stranded. Yet, in my view, every early-stage entrepreneur should be exploring this new funding alternative before approaching VCs. It’s the right way to get money without giving up too much equity or control of your business.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

Startup Professionals Musings

NOVEMBER 10, 2012

Moore titled “ Crossing the Chasm ,” but most entrepreneurs have no idea how it relates to them. 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. Product development chasm.

Startup 254

Startup Technical Review Dilution Early Stage 254

The Next Web

OCTOBER 7, 2013

However, at the very early stage, they are taking as much risk with their future as the founders. Every time a startup raises capital, all common shareholders are diluted. All of the estimates displayed above are figures prior to any dilution. So, if o = initial ownership and y = total dilution, x = o * (1 – y).

Engineer 129

Engineer Dilution Option Pool Vesting 129

Startup Professionals Musings

MARCH 12, 2023

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

Startup Professionals Musings

NOVEMBER 8, 2010

Providing the major funding source for an early-stage startup is a totally different dimension, but it usually trumps all the items above in demanding some equity. Tags: splitting equity entrepreneur startup co-founders business. The same logic applies to splitting equity with co-founders. Marty Zwilling.

Equity 228

Equity Intellectual Property Cofounder CTO Hire 228

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 114

Cofounder Burn Rate Technical Cofounder Seed Capital 114

Both Sides of the Table

SEPTEMBER 10, 2021

And there is so much money around being thrown at so many entrepreneurs that many firms don’t even care about board seats, governance rights or heaven forbid doing work with the company because that would eat into the VCs time needed to chase 5 more deals. And the truth is that several entrepreneurs prefer it this way.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

YoungUpstarts

MAY 6, 2019

These people exist and they are called ‘Serial entrepreneurs.’. Serial entrepreneurs are those who understand the complete concept of a startup lifecycle and benefit from that. In this article, we will discuss why it is important to understand the whole startup stages concept before you start a business to get the most benefit.

Startup 101

Startup Technical Cofounder Merger Early Stage 101

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

YoungUpstarts

SEPTEMBER 16, 2015

I love it when entrepreneurs start a pitch with a “Big Vision” and end it with their how their idea will achieve “World Domination.” However, equally important is the ability for entrepreneurs to break down that path to world domination into realistic milestones that line up with funding rounds. Think baby steps.

Valuation 100

Valuation Dilution Chicago Technical Review 100

Both Sides of the Table

SEPTEMBER 25, 2010

Not that they’re “such a bad idea&# but more that there are inherent problems for entrepreneurs in the process of raising angel money that need to be addressed. This leads to the problem of “herding cats&# for entrepreneurs raising angel money. Here’s where I feel common ground : 1. and not a min.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Business Plan Blog

OCTOBER 4, 2013

This is true for early stage funding as well as venture capital funding. Having too many co-founders will only lead to your eventual dilution. You shouldn’t hire a senior executive from an established company for an early stage startup. Early Stage. Seed to Series A.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Startup Professionals Musings

APRIL 12, 2021

Surprisingly, I still find many aspiring entrepreneurs who assume that if their idea is good enough, funding will appear. These programs don’t usually ask for equity, and they are particularly targeted to the early stages of your business to facilitate growth and survival. The advisor will give you real credibility.

Dilution 404

Dilution Bootstrapping Incubator Government 404

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. See Why Are Revenue-Based Investors Investing in Women & Diverse Entrepreneurs? Less established regulatory framework. . Short track record.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

AUGUST 27, 2010

Moore titled “ Crossing the Chasm ” (1991), but most entrepreneurs have no idea how it relates to them. 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. Tags: entrepreneur chasm startup focus Geoffrey Moore.

Startup 227

Startup Technical Review Dilution Early Stage 227

Startup Professionals Musings

MARCH 14, 2020

After many years of working with angel investors seriously trying to find new ventures worthy of their hard-earned money, I find their frustration often exceeds that of entrepreneurs sincerely looking for financial help. They are not interested in research and development, or funding at the idea stage. Lack of intellectual property.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Startup 308

View from Seed

APRIL 30, 2015

From a company milestones perspective, entrepreneurs who take on venture debt are almost always thinking about raising that next round of capital from other institutions. GM: The model is more about the relationship with the entrepreneurs, the investors, and us as the bank, as opposed to cash flow or fixed assets to lend on.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

OCTOBER 1, 2009

So I believe that now is the perfect time to build a company and the perfect time for early-stage investors to bet on innovation. If you’re raising $2 million and can close on $3 million – don’t optimize to minimize short-term dilution, optimize for contingencies in case the market gets worse. million – take it. I disagree.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

View from Seed

SEPTEMBER 9, 2014

success story Blackboard and veteran entrepreneur who’s held several COO and president roles at various startups. For most of my career, I’ve served startups and early-stage companies as an operating executive or advisor. It’s why every successful entrepreneur will tell you that focus is so important.

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336