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. They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm.

.Net 89

.Net Cap Table Startup Technical Review 89

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. So it makes it a lot more challenging when you have debt on the books that isn’t as longer term as equity. What are some pros and cons? These are value-creation milestones.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

JANUARY 4, 2014

I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. One who wants to commercialize his product and start charging while the other prefers to not charge.

Founder 340

Founder Sacramento Cofounder Technical Review 340

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. It meant that the management teams hadn’t figured out a product / market fit for their own businesses.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

SEPTEMBER 17, 2011

Still, I’ll bet that functionally you divide areas of competence like sales & marketing, product, engineering, biz dev, etc. I know it’s much sexier to race around talking about buying up companies than it is tweaking your business operations to accelerate revenue, reduce churn and grow faster. What will it do?

Operations 292

Operations CTO Hire Startup Early Stage 292

Up and Running

JULY 1, 2020

Businesses start when their founders see a need for a product or service that they can provide. While it’s called a business plan, it can be written and utilized to successfully enter a new market, launch a product, or weigh the potential of adding an employee. This typically occurred with new products.

Business Plan 152

Business Plan Forecast Operations Dilution 152

discuss.joelonsoftware.com

NOVEMBER 1, 2010

where I can learn about how to build a sweat equity team? Right now, my business is just myself and a part-time employee who does support, testing, and product usability design. Rather, it is a proposal for sweat-equity investors. Equity partners need to have a hand in guiding the enterprise. The gist: 1.

Sweat Equity 40

Sweat Equity Equity Angel Investor Affiliate 40

The Startup Magazine

MARCH 30, 2022

Growth financing can also be described as revenue-based financing, which essentially allows you to upfront your annual recurring revenue (ARR) and make it available right now, rather than forcing you to wait weeks or months until your end-of-year earnings are accessible. The scope of growth financing products. Final thoughts.

Finance 166

Finance Dilution Green Revenue 166

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. I also advised Andrew to greatly tighten his product and go-to-market strategy. Safarclick.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Who are the major Revenue-Based Investing VCs?

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Both Sides of the Table

OCTOBER 1, 2009

Consumer spending is 70% of the economy and will continue to be stretched – We can look all we want at tech innovation, VC funding cycles and hot M&A deals, but ultimately growth and therefore investment must be underpinned by revenue. We spent our future since the equity was artificial. Consumer spending is where I’m dubious.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

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

Business Plan Blog

OCTOBER 4, 2013

If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. Rather, give titles such as VP of Engineering, Product/Technology, Sales, Marketing, Finance, etc. Don’t make everyone a founder.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

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

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Production or service is the business’s core activity, which generates revenue. If you are selling a physical product, you will need to decide whether to market online or through brick-and-mortar stores.

Technology 148

Technology Venture Capital Finance Startup 148

Austin Startup

FEBRUARY 4, 2019

A finalist in the Social and Culture category , which will pitch at 11 am Saturday, March 9, EnrichHER Funding , based in Atlanta, is fueling the growth of women-led businesses by enabling women founders to secure capital in an affordable and non-dilutive way. Investors of EnrichHER get no equity.

Startup 50

Startup Cofounder Technical Review Equity 50

Berkonomics

DECEMBER 20, 2018

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. They will be more willing to pay a royalty fee if your product gets them to market earlier or is protected by patent to create a barrier to their competition. I have the weeks to follow to make mine.

IP 54

IP Intellectual Property Investment Bankers Product 54

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

Hunter Walker

JANUARY 2, 2017

The total value of these deals might look higher than when a tech company makes an acquihire but the premium tends to go to retention rather than the cap table (especially since (a) the acquirer might not be seen as an ‘attractive’ place to work and (b) there’s assumption of less equity upside post-acquisition).

Technical Review 115

Technical Review Cap Table Acquisition Startup 115

Up and Running

SEPTEMBER 20, 2021

The use of a cap table for a company comes into play when it has to track the total amount of shares, the value of shares, and the equity ownership of all the shareholders. The data of the company, such as debt and the company’s equity ownership, is laid out with the help of a cap table. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. Whether it is credit or equity, funding is very, very tight. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. Kir Devries.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Berkonomics

DECEMBER 20, 2018

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. They will be more willing to pay a royalty fee if your product gets them to market earlier or is protected by patent to create a barrier to their competition. I have the weeks to follow to make mine.

IP 48

IP Intellectual Property Investment Bankers Product 48

ReadWriteStart

JULY 18, 2011

Think about it that way, filling up their shelves with product. He believes that equity need not be distributed equally, as long as everyone involved is happy with their arrangement. And as long as founders don't have an argument about equity shares in front of the investors they are pitching. You in this room are the inventory.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

Both Sides of the Table

SEPTEMBER 29, 2009

Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. 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. I argued for literally a year to slash burn. Can a deal get done?

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

K9 Ventures

JUNE 12, 2012

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. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Life Beyond Code

SEPTEMBER 27, 2011

One Million by One Million is a global initiative that aims to nurture a million entrepreneurs reach a million dollars each in annual revenue and beyond by 2020, thereby creating a trillion dollars in global GDP and ten million jobs. 1M/1M Program has a bold mission. This is where numerous ventures fail.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116

K9 Ventures

JUNE 12, 2012

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. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Berkonomics

MARCH 21, 2019

If you are a going business with a track record of revenues, then the importance of accurate current financial statements cannot be overstated. If there is no record of revenues, see the “The Berkus Method” available with any search query for valuing the business before revenues. Let’s start with the basics.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Startup Professionals Musings

OCTOBER 29, 2013

Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible. Calculate what you need, and add a buffer. Investment terms.

Valuation 258

Valuation Early Stage Warrant Common Stock 258

Both Sides of the Table

MARCH 21, 2010

Plus, we’re all allured by the false sense that our contract with BigCo is going to “make us&# because once they start using us it will spread like wildfire and the revenue will flow in. BigCo calls you to review your product and decides they want to use you. Sometimes it actually does. How Should You Structure Them?

Warrant 298

Warrant Dilution Startup Stock Options 298

crowdSPRING Blog

DECEMBER 13, 2018

Your company’s brand is a promise you make to customers and prospects about your products, your services, and your company. Branding is a process designed to develop, among other things, a unique business name and custom logo design for a company, product, or service. How they interact with your products or buy your services.

Marketing 162

Marketing Charlotte Naming Design 162

This is going to be BIG.

MARCH 16, 2020

Everyone who follows me knows the love I have for Ample Hills, their product and their wonderful and hardworking amployees. They were capacity constrained from a production standpoint, but it seemed like a good problem to have. Prime locations were beating down their door for expansion.

Bankruptcy 103

Bankruptcy Private Equity Seed Stage Dilution 103

Startup Professionals Musings

SEPTEMBER 19, 2012

Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible. Calculate what you need, and add a buffer. Investment terms.

Valuation 236

Valuation Early Stage Warrant Common Stock 236

The Next Web

FEBRUARY 27, 2014

your equity in a hot new patented technology business), the higher the demand (e.g., As an example, a new restaurant may get valued at 3-4x EBITDA (earnings before interest, taxes, depreciation, and amortization) and a hot dot com business with meteoric traffic growth could get valued at 5-10x revenues. Supply and demand.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Brandanew

JULY 11, 2015

The brand of course is an easily recognizable name that immediately tells people about a certain organization that manufactures certain products or renders certain services. Its existing premium customers won’t take it kindly as it dilutes the said image. Positioning is the way a product is placed in the market.

Virginia 100

Virginia Equity Differentiation Dilution 100

Startup Professionals Musings

JULY 8, 2011

Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible. Calculate what you need, and add a buffer. Investment terms.

Entrepreneur 234

Entrepreneur Valuation Early Stage Warrant 234

Both Sides of the Table

SEPTEMBER 12, 2010

Many of the growth equity firms have had outbound dialing programs for years. Growth equity firms typically target profitable businesses that are often not technical in nature. Perhaps outbound dialing / emailing programs worked well for growth equity firms in their core business. These kind of companies were seldom startups.

Programming 294

Programming Entrepreneur Private Equity Equity 294