ReadWriteStart

JUNE 1, 2020

Reasons for funding. ? Scale up your operations. One of the most prominent reasons for funding is to scale up your operations, for expansion and achieve economies of scale. Now you may want to scale up your operations or expand your presence. The third reason is to fund your short term operational expenses or working capital.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. And the amount of equity you need to grant to accomplish these hires is also an art and most certainly not a science.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Startup Professionals Musings

NOVEMBER 8, 2021

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Entrepreneur 371

Entrepreneur Equity Dilution LLC 371

Both Sides of the Table

AUGUST 14, 2017

As a starting point the board is intended to have legal and financial responsibilities to a few key constituencies: shareholders, debt holders, creditors, employees, government and major parties with whom the business operates.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

YoungUpstarts

SEPTEMBER 23, 2017

Deciding whether to increase money or trade equity in the business for much needed assistance, could be a tough call. I raised money and traded equity, but with my venture, I had to make one of the toughest decisions, to build it with some assistance of co-founders. Both the choices tend to take away a few options. Save where you can.

Cofounder 124

Cofounder Sweat Equity Equity Dilution 124

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

FEBRUARY 6, 2013

it’s the most expensive dilution you’ll ever face. But not anal if one founder who shares equity graciously with early employees who are treated as “co-founders” My idea startup team is heaving on tech personnel but also has strong product management. Quick summary: Be careful not to have too many co-founders.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

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

This is going to be BIG.

JANUARY 18, 2024

On the other hand, they could be the opposite—much more focused on near-term cash distributions than long-term equity appreciation. I would be wary of an investor who tries to insert themselves into the company before watching it operate for a while.

.Net 88

.Net Cap Table Startup Technical Review 88

Startup Professionals Musings

NOVEMBER 6, 2020

It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. Personal income is related to operations versus equity. With major investors, your equity and return is diluted and delayed.

Small Business 311

Small Business Small Business Administration SBA Equity 311

Startup Professionals Musings

MAY 9, 2014

Thus every serious investor reserves a certain amount of his investment capital for follow-on rounds, which allows them to stay to course to success, even with dilution. They will need more money. If you subscribe to truths one to five, startup investing can be lucrative.

Angel Investor 278

Angel Investor Angel Groups Accredited Investor IRR 278

Up and Running

JULY 1, 2020

It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling. Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success.

Business Plan 152

Business Plan Forecast Operations Dilution 152

YoungUpstarts

OCTOBER 10, 2014

Loan financing and equity investment are two common methods of funding a new business start-up, assuming you do not have the capital on your own. Debt financing is the better choice when you prefer to retain control of your operation, and you do not mind the tradeoff of greater risk for higher earning potential. Operational Control.

Equity 176

Equity Limited Liability Company Vietnam Finance 176

www.inc.com

SEPTEMBER 24, 2011

Office and Operations. Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Parker found that equity as compensation helped build loyalty to his company -- even among consultants. Naming a Business.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Both Sides of the Table

AUGUST 3, 2010

I can save tons of development time and I think I can buy it for all equity. How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. I’m not saying there are never reasons to buy another company for cash and/or equity. BUT … it’s your company.

Merger 276

Merger Technical Review Early Stage Dilution 276

Startup Professionals Musings

APRIL 12, 2021

In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process. Negotiate a line-of-credit with a financial institution.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Startup Professionals Musings

FEBRUARY 13, 2013

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. For example, federal and state governments don’t provide grants for starting a business, paying off debts, or covering operational expenses. To the investors, it means less dilution and lower overall risk.

Government 230

Government Equity Cost SBIR 230

Startup Professionals Musings

JUNE 5, 2015

Thus every serious investor reserves a certain amount of his investment capital for follow-on rounds, which allows them to stay to course to success, even with dilution. They will need more money. If you subscribe to truths one to five, startup investing can be lucrative.

Angel Investor 120

Angel Investor Angel Groups Accredited Investor IRR 120

Both Sides of the Table

SEPTEMBER 28, 2014

If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. In startup world low GM almost always equals death which is why many Internet retailers have failed or are failing (many operated at 35% gross margins).

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Startup Professionals Musings

JANUARY 26, 2019

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Startup 194

Startup Equity Dilution LLC 194

The Startup Magazine

JULY 1, 2022

The most common types of financing are debt financing, equity financing, and venture capital. Equity financing is when you sell a part of your company for cash. Equity financing can give you a lot of cash upfront, but it can also dilute your ownership stake in your company. Financing Your Startup.

Technology 138

Technology Venture Capital Finance Startup 138

The Startup Magazine

MARCH 30, 2022

Every organization should be aiming to achieve growth, and this is a particularly important concern for startups that want to scale their operations consistently. Photo by Akil Mazumder from Pexels. You can’t make something from nothing, which is why businesses need capital to get the ball rolling and build momentum over time.

Finance 136

Finance Dilution Green Revenue 136

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. VIII: The Leading Flexible VCs, With Structures Between Equity and Revenue-Based Investing.

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

Up and Running

JULY 14, 2015

Now, if you only needed $2 million of new funding, the investor would receive 50 percent equity. If the new funding increases to $3 million, however, they would have a 60 percent equity stake on the same valuation. You hire more staff than you need, become inefficient with operations, or move to bigger offices.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

Startup Professionals Musings

FEBRUARY 9, 2018

Bootstrapping allows you to maintain full control of your startup strategy, retain maximum equity, and avoid the time delay and energy spent to attract outside investors. I find that most good founders proceed faster on their own, with less drain on their time from peers and programs, and no equity dilution.

Incubator 180

Incubator Angel Investor Dilution Equity 180

Both Sides of the Table

SEPTEMBER 10, 2021

We operate at scale and speed unprecedented in human history.” * I first wrote about the changes to the Venture Capital ecosystem 10 years ago and this still serves as a good primer of how we arrived at 2011, a decade on from the Web 1.0 dot-com bonanza. So in a way it’s self selecting.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Austin Startup

JUNE 30, 2017

TL;DR : Elite accelerators have cemented themselves as the universities of the entrepreneurial world; offering a bundle of resources in exchange for a price (tuition in form of equity). in exchange for a price: usually 6–9% of equity, with (sometimes) heavy anti-dilution rights, and pro-rata rights.

Curation 48

Curation Startup Cofounder Equity 48

Startup Professionals Musings

JANUARY 29, 2018

Unfortunately, in my years since as a small business advisor, I have seen too many founders squander this asset through a lack of understanding of some basic legal and operational issues, or by handing out nominally “free” stock to the wrong people at the wrong time. Manage dilution with proper use of new investment terms.

Stock 129

Stock Vesting Preferred Stock Cofounder 129

Startup Professionals Musings

JANUARY 21, 2017

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

Version One Ventures

FEBRUARY 6, 2019

This aggressive ownership target is one reason more and more founders are looking for capital from IT/tech VCs who don’t demand as much equity. Then, the revenue you earn from these partners/customers can cover your operating costs while you develop your own drug to bring to market – which is where the most value is captured in biotech.

Dilution 132

Dilution Artificial Inteligence IPO Valuation 132

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.

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.

Early Stage 20

Early Stage Equity Venture Capital Government 20

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Also see Preqin’s Key Due Diligence Considerations for Private Equity Investors. . VC and private equity are very illiquid on both the investing and the personnel side. So assessing fit is critical.

Private Equity 60

Private Equity Venture Capital Equity Partner 60

ReadWriteStart

SEPTEMBER 9, 2019

Although some founders take venture capital in exchange for equity, that’s not the only way to do it. That creates a market where equity funding is top of mind. The other piece of the puzzle is that equity deals tend to get a lot of press coverage. McKee : I think equity funding can be the right answer. Oftentimes, it is.

Venture Capital 105

Venture Capital Equity SBA Finance 105

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. It is a tool. They use that tool to buy ownership in a company.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

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. For example, federal and state governments don’t provide grants for starting a business, paying off debts, or covering operational expenses. To the investors, it means less dilution and lower overall risk.

Seed Money 242

Seed Money SBIR Dilution Government 242