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

Startup Professionals Musings

APRIL 12, 2021

Actively seek out government and local incentives. Especially in these times of pandemics and economic initiatives, SCORE and other government agencies are likely to help you if you plan ahead. In these cases, you both win by expanding the market. Use “white label” or custom contract for extra income.

Dilution 404

Dilution Incubator Bootstrapping Government 404

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS.

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

SEPTEMBER 10, 2021

With the enormous changes to our economies and financial markets?—?how how on Earth could the venture capital market stand still? 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?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Startup Professionals Musings

JANUARY 2, 2011

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. To the investors, it means less dilution and lower overall risk. It’s time for you to meet state and local government officials, make them aware of what you are doing, and get them excited and working for you.

Government 221

Government SBIR Dilution Database 221

Startup Professionals Musings

JANUARY 26, 2019

Until the recession a few years ago, market research indicated that as many as 90 percent of the roughly 20 million American small business owners were motivated more by lifestyle than growth and money. Non-equity funding has to come from personal sources, or government grants, or bank loans. There is no free lunch for money.

Startup 194

Startup Equity Dilution LLC 194

Austin Startup

FEBRUARY 13, 2019

Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more. Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. I speak from experience.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

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

Startup Professionals Musings

MAY 19, 2014

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. Since government grants are funded by tax dollars for specific industries and research, usage of grant funds is carefully monitored. To the investors, it means less dilution and lower overall risk.

Seed Money 242

Seed Money SBIR Dilution Government 242

Pascal's View

OCTOBER 11, 2013

I first visited the Museum of American Finance a couple of years ago, and it is not only a great space,it is a useful resource for visitors interested in a wide range of current exhibits on current capital markets topics, as well as documents and artifacts related to capital markets, money and banking.

New York 31

New York Technical Review Angel Investor Finance 31

Startup Professionals Musings

NOVEMBER 4, 2013

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. IPOs in 2008, the market was up to a still trivial 128 in 2012 (compared to 675 in 1996).

IPO 224

IPO Founder Exit Strategy Investment Bankers 224

Startup Professionals Musings

JANUARY 21, 2017

Until the recession a few years ago, market research indicated that as many as 90 percent of the roughly 20 million American small business owners were motivated more by lifestyle than growth and money. Non-equity funding has to come from personal sources, or government grants, or bank loans. There is no free lunch for money.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

Startup Professionals Musings

JULY 3, 2015

In reality, this option is a nightmare that can bump you out of the driver seat, dilute your equity and create a business entity you can’t control. Extensive government reporting and compliance rules. Even with private equity and private acquisition transactions, control stays internal to the principals.

IPO 120

IPO Initial Public Offering Entrepreneur Private Equity 120

Startup Professionals Musings

SEPTEMBER 30, 2012

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. IPOs in 2008, the market was up to a still trivial 159 in 2011. Increasing government regulations.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

Startup Professionals Musings

MAY 18, 2015

Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role. Make sure the government waits for a stock sale to collect taxes. This is called stock dilution control. In the U.S.,

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Gust

MAY 11, 2014

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. Since government grants are funded by tax dollars for specific industries and research, usage of grant funds is carefully monitored. To the investors, it means less dilution and lower overall risk.

Seed Money 164

Seed Money SBIR Dilution Government 164

Startup Professionals Musings

JULY 5, 2011

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Increasing government regulations.

Exit Strategy 235

Exit Strategy IPO Investment Bankers Entrepreneur 235

Austin Startup

OCTOBER 4, 2017

Dilution, overvaluation, free money, TNSTAAFL, and how to deal with VCs like a pro. First time founders are typically the most likely to object to dilution when fundraising. They do this to avoid dilution, which on the surface seems like a good idea, but can prove deadly to your start up when you get to the A round.

Dilution 59

Dilution Valuation Equity Balance Sheet 59

Up and Running

APRIL 24, 2018

Not only that, but global equity funding to digital health companies reached $3.67 Every business needs to adapt to emerging market trends, and your health startup is no exception to this rule. In fact, startups have to stay one step ahead of the changing market conditions. billion in 2017 YTD (as of May 22, 2017).

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

The Equity Kicker

APRIL 13, 2012

It is a well recognised problem, and one that I see affecting large companies all the time when they fail to respond to changing market conditions because it will hurt their business in the near-term. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.

Dilution 87

Dilution Stock Government SEC 87

Austin Startup

MARCH 7, 2021

Texas is the most promising technology market in the United States. Are they running from high prices, high taxes, dysfunctional government, and wildfires? All of the investors, all of the big companies, all of the government groups?—?they Tens of thousands visit Austin every year for the Austin City Limits Music Festival.

Texas 90

Texas San Antonio Houston Dallas 90

VC Cafe

SEPTEMBER 26, 2010

Many cups of coffee and pizzas later, the weekend culminates in a round of presentations from the teams, which clearly articulate the startup’s pitch: problem, market, solution, team, etc. For example, you may point out that there is a company with similar technology, but different application/market. Know your market.

Elevator Pitch 102

Elevator Pitch Incubator Technical Review Startup 102

Gust

MAY 24, 2012

Some commentators have suggested this is the wave of the future, signifying a shift in the balance of power from investors to founders of the relatively small, elite group of growth companies that make it to public markets. Nevertheless, these preferences aren’t intended to last forever.

IPO 159

IPO Equity Common Stock Stock 159

crowdSPRING Blog

AUGUST 7, 2011

Raising the debt ceiling and reducing the budget without additional government stimulus is likely to slow the growth of the overall economy. Investors like stability and the doubt surrounding the debt-ceiling debate removed that from the markets. State and local government cuts may come quickly. Slow growth almost certain.

Small Business 86

Small Business IRR Government United States 86

crowdSPRING Blog

DECEMBER 13, 2018

Chapter 7: How To Translate Your Brand Identity Into Actual Marketing. brand awareness – the ability of customers to identify a brand in a crowded market. Poor design, ineffective marketing, inconsistent messaging, and bad partnerships can all tarnish a brand. Conduct market research and perform a competitor analysis.

Marketing 162

Marketing Charlotte Naming Design 162

David Teten

OCTOBER 1, 2015

Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. How would one set up such a startup to eventually raise capital from outside VCs, who will be wary of ‘dead equity’ (i.e., equity that belongs to departed cofounders)? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Seeing Both Sides

OCTOBER 24, 2015

As Jason Cohen points out , it's just not realistic that in a wildly competitive, dynamic technology market, a company can expect to hold on to its customer on average for 8-10 years. Today, the United States government has a cost of capital of nearly zero - for example, it can borrow money for 10 years and pay only 2% interest.

Churn Rate 20

Churn Rate Early Stage Revenue Metrics 20

www.paulgraham.com

APRIL 28, 2010

As a company gets more established,its valuation gets closer to an actual market value. Whatkind of anti-dilution protection do they want? It costs you a little more equity, but being able to play the two firms off each other (as well as ask one if the other is being out of line) is invaluable. Hell if they know.In

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

maplebutter.com

JANUARY 8, 2013

Written By Dan Martell on February 2nd, 2012 | Category: Hiring LeanStartup Marketing Metrics Startup Life | 6 Comments. Take the market and break it down into smaller chunks. If you’re looking for a designer, engineer, or biz marketing guy – go to meetups / conferences that those people would go to. Why do I do it?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Transformify

FEBRUARY 1, 2019

A business professional can guide you on everything from hiring employees to marketing to sales. Taking this route has one obvious advantage and it is the fact that the entrepreneur remains in control of the business and no equity is acquired by third parties. Grants & Government-backed loans. Equity Funding.

Affiliate 49

Affiliate Equity Valuation SEO 49

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. With the public markets down, these groups began writing down Unicorn valuations. The market favors growth over profits.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

venturehacks.com

MARCH 21, 2008

They can even add more value than an independent board member because they don’t have to deal with corporate governance. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Reid Hoffman

JUNE 8, 2021

And all of the other smart and operational decisions that have enabled Airbnb to weather the storm and go on to have one of the most successful public market debuts. It’s a market. Most boards have an audit committee, a nominating governance committee and a comp committee. And I thought, well, no one’s marketing.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Reid Hoffman

JUNE 8, 2021

And all of the other smart and operational decisions that have enabled Airbnb to weather the storm and go on to have one of the most successful public market debuts. It’s a market. Most boards have an audit committee, a nominating governance committee and a comp committee. And I thought, well, no one’s marketing.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

www.paulgraham.com

OCTOBER 23, 2010

Theyre responding to the market. Till now, VCs claims about how much value they added were sort oflike the governments. Now that VCs have competitors, thats going toput a market price on the help they offer. Founders never really likedgiving up as much equity as VCs wanted. Super-angels compete with both angels and VCs.

Valuation 92

Valuation Stock Partner Founder 92

Startup Professionals Musings

OCTOBER 10, 2013

Until the recent recession, market research indicated that as many as 90 percent of the roughly 20 million American small business owners were motivated more by lifestyle than growth and money. Non-equity funding has to come from personal sources, or government grants, or bank loans. There is no free lunch for money.

Founder 231

Founder Equity Dilution LLC 231