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

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders. Uncategorized company equity dilution founder investors startup'

Dilution 150

Dilution Equity Vesting Stock Options 150

Startup Professionals Musings

APRIL 23, 2012

Expertise can be marketing, technical, financial, or sales. 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. Building a product doesn’t get it distributed and sold. Pre-existing intellectual property.

Intellectual Property 252

Intellectual Property Equity Cofounder CTO Hire 252

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

ReadWriteStart

JUNE 1, 2020

Instead of funding, you pay the investors a structured royalty, which is a portion of the sales. 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.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

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

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

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

Startup Professionals Musings

NOVEMBER 8, 2010

Expertise can be marketing, technical, financial, or sales. 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. Building a product doesn’t get it distributed and sold. Pre-existing intellectual property.

Equity 228

Equity Intellectual Property Cofounder CTO Hire 228

Business Plan Blog

OCTOBER 4, 2013

This is true for early stage funding as well as venture capital funding. If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. Early Stage. Seed to Series A.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

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

Both Sides of the Table

SEPTEMBER 10, 2021

A-Rounds used to be $3–7 million with the best companies able to skip this smaller amount and raise $10 million on a $40 million pre-money valuation (20% dilution). The biggest change for us in early-stage investing is that we now need to commit earlier. So in a way it’s self selecting. That used to be called A-round investing.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

YoungUpstarts

SEPTEMBER 16, 2015

Raise too much capital at any given stage and suffer more dilution than is necessary – obviously not ideal. John Vrionis is a partner at Lightspeed Venture Partners who focuses primarily on early stage enterprise and consumer technology investments. It’s part art, part science. Set Quantifiable Goals.

Valuation 100

Valuation Dilution Chicago Technical Review 100

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). Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. We want a strong balance sheet (um, ok.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

YoungUpstarts

MAY 6, 2019

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. Early Stage. This startup stage starts from the day you decide to work on a startup idea. Here is the complete list of points available in early stage startup.

Startup 101

Startup Technical Cofounder Merger Early Stage 101

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. While early-stage companies have all of their engineers working on product innovation, companies that want to scale realize that you also have to build systems to help with organizational scaling.

Operations 286

Operations New York City Technical Review Startup 286

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. Or will you be fine with a head of marketing or a controller or a sales lead? Based on what criteria?

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336

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. Typically stable, high margins; repeatable sales model; clear path to profitability; and high growth potential. Short track record. Cash collateral.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. NVV: Is there any dilution? But the costs are definitely there.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

YoungUpstarts

MAY 31, 2016

While it’s fair to say that the aforementioned cornerstones apply to more established companies and are intended to ensure for their continued well-being, early stage entrants can benefit from their guidance as well. Hire smart, ambitious, get-it-done employees and lead them with emotionally intelligent innovation leadership skills.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

Berkonomics

FEBRUARY 23, 2023

So, the question: load up with more equity and dilution? For young companies, often the question is whether to suffer a new round of dilution to stimulate growth, or to sell earlier and not share the (presumably) increased proceeds with additional investors. Or sell now? What about those unicorns?

Dilution 62

Dilution Valuation Early Stage Equity 62

Both Sides of the Table

JUNE 5, 2011

Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit&# someday – either via selling your company to a larger company or via an IPO. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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

David Teten

AUGUST 19, 2019

Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. The mode purpose for funding is (in order of frequency) Sales, Marketing, Market Expansion, Product Development, and Hiring Employees. GSD Capital. “ GSD Capital partners with early-stage SaaS founders to fund growth initiatives.

Revenue 60

Revenue Technical Review Software Review Equity 60

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. In short, token sales allow early stage companies to skip the series B round and beyond. Who sets the policy for token sales—management or the board of directors? But many are.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.),

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. In short, token sales allow early stage companies to skip the series B round and beyond. Who sets the policy for token sales—management or the board of directors? But many are.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Berkonomics

OCTOBER 26, 2010

Many early stage CEOs and board members have asked for some guidance regarding pay and time commitments for board members. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service.

Stock Options 66

Stock Options Early Stage Stock Vesting 66

Both Sides of the Table

JULY 25, 2010

Rincon is part of the new breed of Seed Stage VCs and with the leadership of Jim Andelman has charted out the most authentic early-stage investment strategy in Southern California. Any SoCal entrepreneur raising early-stage money should put Rincon on their short list.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Berkonomics

JANUARY 27, 2022

Because the first rule for raising money is to do it on good news – right when sales are increasing at an accelerating rate. Raising too much too early dilutes the founder interest to unacceptable levels. Why is this important advice? Or when a major customer signs a significant deal. What if you have no good news to offer?

Dilution 62

Dilution Strategic Investors Early Stage Hosting 62

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.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

The Next Web

AUGUST 19, 2013

Sales are the bloodstream for most businesses, and tech startups are no exception. It’s always better to be earn money, not just raise it, as money you earn doesn’t dilute your ownership and reassures your investors. This post is about choosing the right sales strategy and channels for your startup from the start.

Belarus 137

Belarus Viral Channel Startup 137

ReadWriteStart

OCTOBER 28, 2010

Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. It is very likely that one or more co-founders will be putting in some cash in the early stages of the company. What happens if one of us leaves the company? If so, how is this to be treated?

Cofounder 128

Cofounder Founder Dilution Equity 128

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. These are women in their 40s to early 60s, often shopping for younger women. Kristen is doing about $70,000 year-to-date, and expects to hit $200,000 for the 2010 fiscal year based on her holiday sales projections.

Cloud 115

Cloud Silicon Valley Bootstrapping Incubator 115

Both Sides of the Table

FEBRUARY 17, 2011

A year ago I blogged about one of my most common mantras that applies to sales, biz dev & fund raising alike: “ Time is the Enemy of all Deals.&#. 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.

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303