David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Sales & Marketing | Wednesdays. Financing a Small Business. Financing A Small Business. Personal Finance. SALES & MARKETING. Should You Share Equity with Consultants? Parker found that equity as compensation helped build loyalty to his company -- even among consultants.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Marketing and sales are how you reach and sell to your target market. Finance is how you manage your finances, including budgeting, accounting, and bookkeeping. Financing Your Startup.

Technology 135

Technology Venture Capital Finance Startup 135

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. The business is already profitable with $2.9 million in revenue. Well, I didn't think much of it.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Austin Startup

FEBRUARY 4, 2019

L to R: Tiara Zolniez (Co-Founder & Sales), Dr. Roshawnna Novellus (Co-Founder & CEO), Alisha Griffey (COO) The Forrest Four-Cast: February 4, 2019 Fifty diverse startups will aim to impress a panel of judges and a live audience with their skills, creativity and innovation at SXSW Pitch Presented by Cyndx.

Startup 50

Startup Cofounder Technical Review Equity 50

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? even before the pandemic itself has been fully tamed. We have global opportunities from these trends but of course also big challenges.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

ReadWriteStart

SEPTEMBER 10, 2010

Whether it is credit or equity, funding is very, very tight. I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though). In 1M/1M, our preferred financing strategy is customers.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Seeing Both Sides

AUGUST 28, 2017

But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens? Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens? Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

David Teten

JANUARY 21, 2021

V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020.

Equity 78

Equity Revenue Cofounder Colorado 78

ReadWriteStart

OCTOBER 28, 2010

More excerpts from "Do More Faster" Title chapter: " Do More Faster " by David Cohen How should we split the equity? Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Or worse, one that claims equity that you don't believe is due.

Cofounder 128

Cofounder Founder Equity Dilution 128

Hunter Walker

JANUARY 2, 2017

This keeps them aligned with their investors since a $250m exit with modest venture financing raised can be wonderful for all parties, but the same transaction can look awful if your last round was $60m on $300m pre! It could lower earnings because of continued investment and share dilution. ” Next Level – Buying Product.

Technical Review 116

Technical Review Cap Table Acquisition Startup 116

Berkonomics

MAY 8, 2014

The company has been funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all. The company grows in value to its customers and to prospective buyers of the business, but without any dilution of control or ownership for the founders. How refreshing!

Finance 66

Finance Dilution Equity Naming 66

Haystack

JULY 8, 2018

For employees at early-stage companies… the equity you’ve been granted is likely common stock, just like the founders. While folks will feel sympathy for line employees at startups who don’t make any gains in a sale, no one will feel sorry for early-stage investors who get washed out.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Startup Professionals Musings

SEPTEMBER 5, 2016

You don’t have to fight for your equity, and no one can slow you down in decision making. Keep later critical financing needs viable. The most critical need for financing will come as you scale initial success, when you need money to cover new inventory, delayed receivables, and location expansion.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

Gust

OCTOBER 21, 2011

For convertible notes, the only liquidity event we need be concerned with is an acquisition of the startup in the near future, before the maturity date; otherwise, the notes will convert to equity of one kind or another, and the eventual sale of that equity (in a public offering, acquisition, or private sale) is a different subject for another day.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 29, 2009

Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Do I understand the royalty replaces the need for equity investors ?

IP 54

IP Intellectual Property Investment Bankers Product 54

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Do I understand the royalty replaces the need for equity investors ?

IP 48

IP Intellectual Property Investment Bankers Product 48

The Equity Kicker

MAY 14, 2012

Twice in the last week I found myself coaching founders on how to build a financing plan around value creation milestones so I thought I would share what I said here. demonstrating a repeatable sales model (typically telephone sales, direct sales, or channel sales). achieving first international sales.

Finance 118

Finance Valuation Venture Capital Dilution 118

Both Sides of the Table

APRIL 25, 2011

It’s nearly impossible to get a services company financed by VCs. They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. You’re a small fish. This team is talented. They wanted advice.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. To briefly recap: 3/12 : Fred Wilson discussed why he dislikes convertible notes and SAFEs, and how priced equity rounds make more sense at the seed level. instrument (for a lack of a better name).

Dilution 54

Dilution Equity Warrant Distribution 54

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” 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.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay. For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Next Web

FEBRUARY 27, 2014

This is typically in conjunction with an upcoming financing or pending takeover offer. your equity in a hot new patented technology business), the higher the demand (e.g., A competitive commodity business, or a “me too” story , will be less demanded, and hence, will require a lower valuation to close your financing.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Up and Running

MAY 27, 2014

Is this the investor’s first time investing in a company that needs to raise multiple rounds of financing (if you are in fact doing so)? Is the investor asking for a non-dilution clause (a stipulation that their equity shares never dilute) in your operating agreement? (No Is your target market new to the investor?

Angel Investor 119

Angel Investor Dilution Accredited Investor Due Diligence 119

This is going to be BIG.

MARCH 16, 2020

Some key existings who didn’t want to see their prior money get lost wouldn’t budge on a dilutive financing, despite the fact that they knew where we were headed. If you are a turnaround, bankruptcy or private equity investor and have questions about the sale process, you can e-mail me at charlie@brooklynbridge.vc.

Bankruptcy 95

Bankruptcy Private Equity Seed Stage Dilution 95

The Next Web

MARCH 2, 2014

Instead, honestly analyze the company’s business plan and finances to determine whether the business needs to secure outside funding in order to achieve its objectives, and if so, how much. Should we finance with debt or equity? Here are four main questions to keep in mind during the vetting process: 1. Take your time.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Both Sides of the Table

DECEMBER 1, 2009

I advocate treating them like a co-founder in every way except when they join and how much equity they get. You agonize over whether it is better to take a “A investor&# for 30% dilution or a “nice to have&# investor for 25% and on better terms. Do you understand how to lead a sales process? Take your inventory.

Hiring 289

Hiring Cofounder Dilution Startup 289

Up and Running

APRIL 18, 2013

Specialty finance structures have been around since the beginning of finance, but in the last several years, as bank lending remained frozen following the financial crisis, alternative financial product offerings have exploded. For example, you don’t have to raise expensive equity to purchase 3 delivery trucks or a CNC machine.

Small Business 89

Small Business Finance Dilution Equity 89

Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. A convertible note is short-term debt that converts into equity.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. In a startup, dilution happens, and you just need to factor it in.

Equity 56

Equity Employee Vesting Preferred Stock 56

Both Sides of the Table

APRIL 14, 2012

What I want to talk about today is one of the insider baseball discussions of our industry this past week: The odd fact of the $500 million financing round completed just before the company sold for a B. You are either bought for stock or for equity. You just said, “nobody would take 1-2% dilution.” Think about it.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Pitfalls in sharing equity. While equity can be a great tool for compensating early on, the drawbacks are significant.

Equity 116

Equity Stock Options Vesting Stock 116

ithacaVC

DECEMBER 13, 2013

The option plan shares available for future issuance typically represent the number of additional options needed for hiring planned up to the point of the NEXT financing (as in we are doing a Series A round now, how many options do we need prior to doing a Series B round). times more equity than Founder X. after the financing closes).

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67