The Startup Magazine

MARCH 14, 2022

5) Managing the operations. As the seed funding has been raised by this time, the company starts its operations and gradually expands. At this stage, the founder mainly raises funding from their sources or family and friends. The business logistics are defined, and a brand identity is created. 2) Seed funding.

Technical Review 144

Technical Review Due Diligence India Startup 144

Startup Professionals Musings

AUGUST 4, 2014

Co-founders only able to work part-time, with responsibility and major income sources elsewhere, don’t carry the same risk as others with more operational responsibility. The challenge is for real co-founders to keep their equity percentage above 50 percent, or they effectively lose control of operational decisions.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

ReadWriteStart

JUNE 1, 2020

Reasons for funding. ? Scale up your operations. One of the most prominent reasons for funding is to scale up your operations, for expansion and achieve economies of scale. Now you may want to scale up your operations or expand your presence. The third reason is to fund your short term operational expenses or working capital.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

AUGUST 24, 2016

Co-founders only able to work part-time, with responsibility and major income sources elsewhere, don’t carry the same risk as others with more operational responsibility. The challenge is for real co-founders to keep their equity percentage above 50%, or they effectively lose control of operational decisions. But don’t get greedy.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

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? We both meant mostly the same thing.

Merger 276

Merger Technical Review Early Stage Dilution 276

This is going to be BIG.

JANUARY 18, 2024

Governance Moreso than a lot of actual VCs, a lot of high-net-worth folks tend to ask for board representation—even in the super early stages of a company where boards tend to be a little less formal. I would be wary of an investor who tries to insert themselves into the company before watching it operate for a while.

.Net 88

.Net Cap Table Startup Technical Review 88

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 118

Cofounder Burn Rate Technical Cofounder Seed Capital 118

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. Negotiate a line-of-credit with a financial institution.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Both Sides of the Table

SEPTEMBER 10, 2021

We operate at scale and speed unprecedented in human history.” * I first wrote about the changes to the Venture Capital ecosystem 10 years ago and this still serves as a good primer of how we arrived at 2011, a decade on from the Web 1.0 The biggest change for us in early-stage investing is that we now need to commit earlier.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

David Teten

JANUARY 19, 2021

John Berger, Director Operations & Impact Solutions, Toniic , observed that this has clear investor benefits: “ The grace period became a feature because it benefits investors in regions like the US where there can be tax differences between short and long term gains. Growth stage and beyond: clear pathway to outcomes of over $1 billion.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

View from Seed

JULY 15, 2020

Companies that are largely in R&D phase can operate business as usual, assuming there is capital to fund the company for 18-24 more months. Some early stage businesses may even be able to get to CFBE fairly quickly. Other companies are great businesses, but are effectively encountering a dilution event.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Both Sides of the Table

SEPTEMBER 28, 2014

Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company). If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. We want a strong balance sheet (um, ok.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

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. 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

David Teten

AUGUST 19, 2019

Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. The average monthly operating expenses is $70,335. 30% have been operated by females, 70% have been operated by males. 40% have been operated by “visible minorities”, 60% have been operated by “non-visible minorities”.

Revenue 60

Revenue Technical Review Software Review Equity 60

The Next Web

SEPTEMBER 13, 2013

But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices. The rest of Asia is still developing with far more angel and early-stage investors than mid-to-later stage folks.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

JULY 25, 2010

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

ReadWriteStart

OCTOBER 28, 2010

Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Too many people mix the notion of being a shareholder in a startup and having an operating role. You'll need to decide what kinds of decisions the board makes, and which ones it won't. Is it debt?

Cofounder 128

Cofounder Founder Equity Dilution 128

Seeing Both Sides

AUGUST 28, 2017

Perhaps, when things settle down a bit more, those companies will even raise series A capital from traditional institutional sources to expand the product features, beef up the operations team more fully and make progress in finding initial product-market fit. Shift of value from equity holders to token holders. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Perhaps, when things settle down a bit more, those companies will even raise series A capital from traditional institutional sources to expand the product features, beef up the operations team more fully and make progress in finding initial product-market fit. Shift of value from equity holders to token holders. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Up and Running

JULY 14, 2015

An early stage startup will want to access funds to help further validate its business proposition. You hire more staff than you need, become inefficient with operations, or move to bigger offices. Operating lean should be the mantra of all businesses. Should you ever raise more than you need?

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

Both Sides of the Table

FEBRUARY 17, 2011

If you are able to raise money from credible sources at a reasonable dilution percentage then I personally favor getting the round done now and building your business. Every conversation about fund raising should start with what your current operational needs are and the stage of your business. 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

YoungUpstarts

DECEMBER 7, 2014

Many new starters are reluctant to ask for any kind of assistance in the early stages, and it’s difficult to understand why. The starter may feel that outside assistance somehow dilutes the stand-alone nature of the operation, but this isn’t really the case. Going it alone can be an abstract concept.

Dilution 183

Dilution Early Stage Hiring Employee 183

Haystack

AUGUST 18, 2019

When I put all of this together, what I see is: In the Bay Area, the seed stage is getting squeezed from all sides during this summer solstice of. 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

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. This is because excessive capital becomes toxic for an early stage company.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. This is because excessive capital becomes toxic for an early stage company.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

DECEMBER 1, 2009

I know this is unconventional thinking but if you want to understand more I cover my rationale on this post about The Most Common Early Stage Startup Mistakes and again in this post covering how to implement startup prenuptials. Are you externally savvy vs. more inwardly operational? - Are you a leader vs. a manager? -

Hiring 289

Hiring Cofounder Dilution Startup 289

View from Seed

JANUARY 26, 2016

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. Series A investors invested quite early, often before product/market fit. FWIW, that is not how we operate.).

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Hunter Walker

JANUARY 15, 2016

Early on my original expectation was that, like a social club, Dogster site members should be able to incur all cost of site operations. 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.

Technical Review 48

Technical Review Startup Cofounder SMS 48

David Teten

NOVEMBER 17, 2011

In particular, this model is designed to help all team members understand the impact of dilution on their options. Enter Raul: This capital table startup options valuation model was created with the purpose of valuing options for an illiquid, early-stage start-up. I couldn’t find one online, so I built it. Participa.me

Employee 155

Employee IRR Startup Mexico 155

David Teten

NOVEMBER 10, 2011

This is designed to be a simple end-to-end financial model for an early-stage startup. The model outputs standard financial statements and key operating metrics based on a wide range of user inputs, and is highly customizable and entirely transparent. Download the template financial model in Excel here.

Balance Sheet 154

Balance Sheet Startup Equity Valuation 154

David Teten

AUGUST 21, 2019

Less or no dilution. 2) To sell their businesses when they want – early, mid term, or never.” . When you raise early stage VC, you can’t sell early because the VCs won’t agree to it. Works for early-stage companies. RBI investors usually don’t take equity. Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Early Growth Financial Services

AUGUST 28, 2014

Our Seed Funding Your Startup webinar with Kristine di Bacco, Associate Attorney at Fenwick & West and Sirk Roh, EGFS’ Chief Operating Officer, was a dive into the ins and outs of early-stage financing and a look at some of the key vehicles.

Bootstrapping 54

Bootstrapping Dilution Early Stage Equity 54

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

View from Seed

SEPTEMBER 9, 2014

For most of my career, I’ve served startups and early-stage companies as an operating executive or advisor. So when founders lose focus, they dilute their power and effectiveness, which diffuses the force of their impact. In other words, to operate a startup is to wade through uncertainty. Based on what criteria?

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336

VC Adventure

AUGUST 30, 2010

I think the answer to these questions are that 1) it’s not at all clear that this trend is as definitive as Graham suggests; 2) it’s a mixed bag for entrepreneurs (more positive in the short run, potentially negative in the long term); and 3) it’s clearly not a positive trend for early-stage investors. Has Convertible Debt Won?

Angel Investor 103

Angel Investor Early Stage Equity Valuation 103

The Equity Kicker

MARCH 14, 2012

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. The first and simplest answer to this is the legal one.

Venture Capital 104

Venture Capital Dilution Early Stage Equity 104

Up and Running

APRIL 24, 2018

Health care ethics are the moral principles and values that allow you to make the right choice while promoting, distributing, and operating your product to healthcare organizations or patients directly. That’s why having a revenue-minded focus from the early stages helps to secure funding.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73