Startup Professionals Musings

SEPTEMBER 10, 2018

Building a new business is quite different from an executive role in a mature company, so people from these backgrounds are often a liability. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

Both Sides of the Table

FEBRUARY 6, 2013

I am fond of quoting that about 70% of my investment decision of an early-stage company is the team. it’s the most expensive dilution you’ll ever face. I don’t think VCs care as much about co-founders & economics as people think. If they join super early it is often a disaster.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

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

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. It’s true that some later-stage private equity firms like to fund “roll ups” (a company that acquires many related companies in it sector), but this is seldom the domain of VCs.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Startup Professionals Musings

AUGUST 4, 2014

Building a new business is quite different from an executive role in a mature company, so people from these backgrounds are often a liability. 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

Both Sides of the Table

MARCH 19, 2013

The era of VCs investing in successful consumer Internet startups such as eBay led to a belief system that seemed to permeate many enterprise software startups that hiring sales or implementation people was a bad thing. But the “no sales people” mantra isn’t what I’m here to take on. I believe it’s flawed.

Technical Review 403

Technical Review Software Review Startup API 403

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. Often senior people from one company are given senior titles at the other. They often involve big hugs on stage. Want to sell early? If they’re early stage like you, they’re likely just dogs.

Merger 276

Merger Technical Review Early Stage Dilution 276

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. Skoll Foundation.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

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. Later stage investors want a maximum size check.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

The Startup Magazine

MARCH 14, 2022

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. People have started reposing faith in the potential of startups. 2) Seed funding.

Technical Review 145

Technical Review Due Diligence India Startup 145

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.). Uncategorized company equity dilution founder investors startup'

Dilution 150

Dilution Equity Vesting Stock Options 150

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

Both Sides of the Table

SEPTEMBER 5, 2012

” I applaud all efforts by people to take on this issue and especially be Adeo who – let’s be honest – was really the first champion of trying to make the VC world more transparent by launching TheFunded, which didn’t exactly endear him to VCs initially. We’re back to discussing convertible debt again.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

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 usually judge people’s reactions not by the comments section of my post (where people are a little bit more polite so you get selective bias) but by the private emails I get. Dilute your cash, equity or both.

Operations 292

Operations CTO Hire Startup Early Stage 292

Startup Professionals Musings

AUGUST 24, 2016

Building a new business is quite different from an executive role in a mature company, so people from these backgrounds are often a liability. Of course, all co-founders need to remember that allocated percentages will be diluted as Angel and VC investors are brought in. But don’t get greedy.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

ReadWriteStart

JUNE 1, 2020

These usually play a role in the very early stage of your business, primarily pre-revenue. The seed stage is focused on building the core team, product optimization, exploring avenues for monetization. ? 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

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

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

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

Both Sides of the Table

JULY 22, 2010

So taking the same fund raising round and assuming that the VC wants the options including before he or she funds (and before is totally standard) then the math works like this: Assuming a 15% option pool post funding then you need a 20% option pool pre funding (because the pool gets diluted by 25% also when the VC invests their money).

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

YoungUpstarts

MAY 6, 2019

You must have heard about people who build startups, make them successful, sell them, and move on to start another startup. These people exist and they are called ‘Serial entrepreneurs.’. Early Stage. This startup stage starts from the day you decide to work on a startup idea. And, you must have wondered, ‘Man!

Startup 113

Startup Technical Cofounder Merger Early Stage 113

Startup Professionals Musings

MARCH 12, 2023

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. These are people who believe in you personally, without evidence of previous startup experience, no current traction, and lack of valuation.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

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

Both Sides of the Table

SEPTEMBER 10, 2021

One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued? The biggest change for us in early-stage investing is that we now need to commit earlier. Of course we can’t. What Has Changed in Financing?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

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

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

Business Plan Blog

OCTOBER 4, 2013

This is true for early stage funding as well as venture capital funding. Don’t hire people with skills and qualifications similar to yours. This helps to better divide the work, make people accountable, and show investors just why each founder/hire is key to the organization. Early Stage.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. Great leaders recognize their own individual strengths and recruit people who complement them rather than compliment them. They look for people who fill in their gaps and together the team can make a whole. were more distributed.

Operations 286

Operations New York City Technical Review Startup 286

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

APRIL 12, 2021

The real value of these groups is the relationships you can build with key people who can help you later, as well as the early learning from the incubator organization. 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.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Both Sides of the Table

OCTOBER 1, 2009

When the market run started in March people were relieved that “the world wasn’t ending” so they started spending again. I believe that “necessity is the mother of all invention” and that bad times will cause great people to rise to the occasion. So we loaded up on flat screen TVs, multiple generations of iPods and trips to Hawaii.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

YoungUpstarts

SEPTEMBER 16, 2015

Raise too much capital at any given stage and suffer more dilution than is necessary – obviously not ideal. The goal was to set quantifiable metrics to hit in each category and to reverse engineer how many people and dollars would be required to get there. It’s part art, part science. Set Quantifiable Goals.

Valuation 100

Valuation Dilution Chicago Technical Review 100

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

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. When should founders hire one? Based on what criteria? Assessing Opportunities & Challenges.

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336

Startup Professionals Musings

JUNE 13, 2020

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. These are people who believe in you personally, without evidence of previous startup experience, no current traction, and lack of valuation.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

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. Plus, you can allow people to vest into the program. These people are more focused, can multi-task better, and generally have a top tier sense of empathy.

Hiring 179

Hiring Early Stage Marketing Term Sheet 179