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. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy.

Customer 191

Customer Entrepreneur Technical Review Dilution 191

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. Details here.

Equity 78

Equity Revenue Cofounder Colorado 78

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. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy.

Entrepreneur 252

Entrepreneur Marketing Technical Review Dilution 252

Startup Professionals Musings

OCTOBER 17, 2022

VCs are committed to servicing existing portfolios. 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.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

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. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy.

Startup 254

Startup Technical Review Dilution Early Stage 254

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

Startup Professionals Musings

APRIL 12, 2021

Of course, it helps to pick a business model that minimizes these costs, such as e-commerce to minimize initial staff and facilities, or professional services, where you are the initial product. Don’t underestimate the advantages of providing your products and services in exchange for access to facilities and equipment you need to grow.

Dilution 404

Dilution Incubator Bootstrapping Government 404

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. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

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 113

Startup Technical Cofounder Merger Early Stage 113

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. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. How profitable is my product or service? What sized team can I afford in order to sell, market & provide service to these customers? We have been able to build deep customer insights on product, pricing, service, geography, competition, etc.

Operations 286

Operations New York City Technical Review Startup 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

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

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. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy.

Startup 227

Startup Technical Review Dilution Early Stage 227

Startup Professionals Musings

JANUARY 19, 2020

VCs are committed to servicing existing portfolios. 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.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

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. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

Berkonomics

NOVEMBER 23, 2023

and here is the usual early-stage trap… First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. An option plan should carve out an addition of about 15% of the “fully diluted” shares. Equity is divided between the founders and the business begun.

Equity 62

Equity Stock Options Vesting Early Stage 62

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

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. Early-stage: Cofounder with engineering/ product background from top-tier university or major technology company. Short track record.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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

Berkonomics

FEBRUARY 23, 2023

Competitors, seeing a successful development of a niche, flock into the competitive void with products or services built with a fresh view of the current environment. So, the question: load up with more equity and dilution? Or sell now? Or sell now? What about those unicorns?

Dilution 62

Dilution Valuation Early Stage Equity 62

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

David Teten

AUGUST 19, 2019

Investment Criteria: B2B SaaS or tech-enabled services with proven, recurring contracts. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Feenix Venture Partners : Feenix Venture Partners has a unique investment model that couples investment capital with payment processing services.

Revenue 60

Revenue Technical Review Software Review Equity 60

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

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. However, nothing is more important than having a product or service with the ability to make it and sell it.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

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

Berkonomics

OCTOBER 26, 2010

Give one percent equity to each outside board member vesting over four years of service. Many early stage CEOs and board members have asked for some guidance regarding pay and time commitments for board members. Inside board members, CEO and any other paid employees are not paid for board service in either stock options or cash.

Stock Options 66

Stock Options Early Stage Stock Vesting 66

Berkonomics

JANUARY 27, 2022

Raising too much too early dilutes the founder interest to unacceptable levels. In recent years, I have counseled founders to raise enough to accelerate to a significant milestone that is over a year away, and to scale the business to find breakeven with two early rounds if possible. So, here’s the rub.

Dilution 62

Dilution Strategic Investors Early Stage Hosting 62

Gust

MAY 24, 2012

As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Startup Professionals Musings

DECEMBER 27, 2014

VCs are committed to servicing existing portfolios. 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.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

ReadWriteStart

SEPTEMBER 10, 2010

This company provides a crowdsourced customer service solution to enterprises. Gio pitched it to me as a crowdsourced BPO, but I think he will have more success if he simply focuses on customer service as his core value proposition. You can get cash without diluting your ownership in the company.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

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. How much dilution am I going to have to take now? So if you can take 27% dilution for $1.5 So if you can take 27% dilution for $1.5 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Startup Professionals Musings

AUGUST 2, 2014

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. The amounts from Angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range.

Angel Investor 266

Angel Investor Entrepreneur Venture Capital IRR 266

Berkonomics

APRIL 26, 2018

If fixed expenses, especially payroll, are paid out before cash is received from services or shipments, the company is financing its growth with ever-increasing working capital needs. Running out of money is not always synonymous with “going broke”. Many great businesses in their growth periods find themselves stretched for cash.

Dilution 90

Dilution Acquisition Early Stage Book Value 90

www.seriesseed.com

DECEMBER 9, 2012

I hesitate to use a quote from one of the greatest people ever to grace planet earth, and certainly the question of how to structure early stage investment is a laughable cause as compared to the rights that Ghandi (also a lawyer) fought to advance.  A question I have is why is there no anti-dilution protection for the investor?

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

View from Seed

APRIL 16, 2015

An easy way to think about it is that value over time doesn’t go up and to the right in a straight line like this: Instead, it’s more of a stair step like this: So, what are the value inflection points that create the stair steps, and how does one think about it at the earliest stages? These might include: Bring on a technical co-founder.

Seed Stage 120

Seed Stage Cofounder Early Stage Startup 120