Startup Professionals Musings

SEPTEMBER 27, 2023

It’s disconcerting for most to realize that these shares are initially worth nothing, and the challenge is to get that value up as quickly as possible, without losing it just as quickly to investors, lazy partners, and taxation. This is called stock dilution control. Minimize your own loss of ownership as major investors contribute.

Stock 240

Stock .Net Vesting Founder Vesting 240

David Teten

JANUARY 19, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. 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. Of the Inc. Example VC.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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. In 2019 we partnered with several revenue-based lending providers, effectively creating a marketplace. “.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

JANUARY 15, 2021

It’s disconcerting for most to realize that these shares are initially worth nothing, and the challenge is to get that value up as quickly as possible, without losing it just as quickly to investors, lazy partners, and taxation. This is called stock dilution control. Minimize your own loss of ownership as major investors contribute.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

Both Sides of the Table

AUGUST 14, 2017

Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. That’s true. The administrative work we actually do at board meetings?

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Startup Professionals Musings

OCTOBER 7, 2022

Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. How much equity ownership are you willing to offer? Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

OCTOBER 17, 2022

They have too many highly paid partners, fat fees, an aging corporate infrastructure and difficulty raising money from institutions. As lifecycle investment partners, they have become weighted down with portfolios still recovering from the economic downturn. Super angels are individuals or small teams using their own money.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

www.inc.com

SEPTEMBER 24, 2011

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. But sharing equity can have pitfalls, too.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Berkonomics

DECEMBER 31, 2020

The company was funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all. No dilution to shareholders or the founders. Often, grants require that you partner with other organizations to deliver the results or measure the effectiveness of your special project.

Equity 62

Equity Finance Dilution Founder 62

View from Seed

APRIL 30, 2015

Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. Use good judgment, talk to your co-founders/investors/lawyers, and partner with a bank that values transparency and relationships such as SVB.]. What are some pros and cons?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

MAY 8, 2022

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

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. My recommendation to our lead partner looking at the deal, “Pass. He had an ad-supported business doing about 1.5

Merger 276

Merger Technical Review Early Stage Dilution 276

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

JANUARY 4, 2020

Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. How much equity ownership are you willing to offer? Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Austin Startup

JULY 6, 2018

Ask the Users Startup Accelerators: Bundled and Unbundled Over the past several years, accelerators have emerged as a powerful filtering and signaling mechanism in early-stage startup ecosystems, allowing high-potential young startups to connect with investors, advisors, and other strategic partners far faster and more efficiently than before.

Dilution 48

Dilution Startup Technical Review Equity 48

Both Sides of the Table

JANUARY 4, 2014

She started it with a partner, 50-50. Equity for the future? If you are the person staying how resentful will you become working your arse off for equity that your co-founder who leaves will get value from. They were close friends, lived down the road and members of our synagogue. We sat down the three of us.

Founder 340

Founder Sacramento Cofounder Technical Review 340

Startup Professionals Musings

APRIL 12, 2021

These can be a key source of funding connections, vendor contacts, and potential partners during your rollout and scaling. These programs don’t usually ask for equity, and they are particularly targeted to the early stages of your business to facilitate growth and survival. Negotiate bartering deals versus cash contracts.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Startup Professionals Musings

JANUARY 19, 2020

They have too many highly paid partners, fat fees, an aging corporate infrastructure and difficulty raising money from institutions. As lifecycle investment partners, they have become weighted down with portfolios still recovering from the economic downturn. Super angels are individuals or small teams using their own money.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

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

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. I can’t tell you how often a client calls me up and says something like this: “Matt, we have this great new consultant who is going to make introductions to us to [pick type of business partner]. link] mattbartus. Categories.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

www.instigatorblog.com

OCTOBER 23, 2010

Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. 1% but they’re not going to be overwhelmed by it, or insanely incentivized by that equity alone. I do believe that early employees should trade salary for equity.

Equity 41

Equity Employee Startup Vesting 41

Up and Running

JULY 1, 2020

Lenders and equity investors are less emotionally involved in the plan as people within the company. Our mission, as defined by the community partners that formed us, was to provide medical, dental, and mental health services. Will marketing for the expansion dilute marketing of your brand or other products?

Business Plan 152

Business Plan Forecast Operations Dilution 152

David Teten

JANUARY 21, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. 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. II: Who are the major Revenue-Based Investing VCs?

Equity 78

Equity Revenue Cofounder Colorado 78

This is going to be BIG.

FEBRUARY 27, 2011

This is where your business starts to incur real costs—but it’s also where entrepreneurs don’t like to be short term “sellers” of their equity. They’re hesitant to raise money—selling equity to investors—when things look great. Major league baseball players have trainers.

Dilution 104

Dilution Equity Hiring Partner 104

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Plus, any other non-standard items here should be called out, too, like non-dilutive grants, as applicable. First, it’s helpful to enumerate the startup’s funding history to date.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

Startup Professionals Musings

AUGUST 10, 2019

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Both Sides of the Table

SEPTEMBER 29, 2009

This came in part due to the huge influx of money into VC but also because hedge funds and private equity shops with no VC experience wanted part of the action. So if you’re in year 8 of a 10-year fund and fund raising hasn’t gone so well, it’s no surprise that some partners will leave. and trying to raise their next fund.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Berkonomics

JULY 16, 2020

It may not be equity. Venture or angel-financed companies with plenty of working capital sometimes are immune to this working capital need for some time into their growth, but at some point, it will become clear that the cheapest form of finance is not equity in a growing enterprise. Back to loans costing less than dilution of equity.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

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.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Startup Professionals Musings

JANUARY 29, 2018

Now is the time to talk to a qualified attorney, and get some discipline in place for the following strategies: Manage founder’s shares like gold with partners. Even though initial stock has no market value today, it is extremely valuable in dividing equity ownership between co-founders, investors, and early partners.

Stock 129

Stock Vesting Preferred Stock Cofounder 129

Startup Professionals Musings

DECEMBER 27, 2014

They have too many highly paid partners, fat fees, an aging corporate infrastructure and difficulty raising money from institutions. As lifecycle investment partners, they have become weighted down with portfolios still recovering from the economic downturn. Super Angels are individuals or small teams using their own money.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

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). each with partners as the lead. So in a way it’s self selecting. Where are Things Headed for VC in 2031? Investments in the intersection of data, technology and biology.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

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). under $500K). “ .

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

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

Startup Professionals Musings

DECEMBER 14, 2014

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Both Sides of the Table

MARCH 21, 2010

I’ve heard the following so many times that it still makes me scratch my head, “if those guys are going to get rich off of our backs then we’re going to look like fools if we don’t have equity.&#. I’ve already made clear that I think raising equity from “strategic money&# is an oxymoron.

Warrant 298

Warrant Dilution Startup Stock Options 298

Startup Professionals Musings

MAY 18, 2015

It’s disconcerting for most to realize that these shares are initially worth nothing, and the challenge is to get that value up as quickly as possible, without losing it just as quickly to investors, lazy partners and taxation. This is called stock dilution control. Minimize your own loss of ownership as major investors contribute.

Stock 120

Stock Vesting Common Stock Founder Vesting 120