Startup Professionals Musings

MAY 11, 2011

The simple answer is to find a business partner, not an “implementer,” who already has the technical experience you need, and is willing and able to run that side of the business. If you are an entrepreneur, like Andrew Mason , CEO of Groupon, with a degree in music and no technical business partner to be found, your job is a bit harder.

Technical Review 236

Technical Review Partner Entrepreneur Dilution 236

Both Sides of the Table

JANUARY 4, 2014

Nowhere is the politics more difficult than with co-founders, which is why for years I’ve spoken publicly about “ the co-founder mythology.” ” Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes. She started it with a partner, 50-50.

Founder 340

Founder Sacramento Cofounder Technical Review 340

View from Seed

OCTOBER 24, 2019

As seed rounds have atomized, it’s not uncommon for founders to raise 3 or even 4 rounds prior to a series A. The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. Founders with limited experience.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

View from Seed

JANUARY 13, 2021

The objection goes something like this: “yes, I can see rookie founders turning to you for a seed round. But won’t all good founders go to established firms that raise series A’s out of the gate?”. And yes, a seed fund may have a tougher time holding on to their ownership down the road, and thus get diluted down. But guess what?

Dilution 399

Dilution Later Stage Portfolio Technical Review 399

View from Seed

AUGUST 17, 2021

A few weeks ago, we hosted a small dinner for a number of portfolio company founders, LP’s, and friends of the firm. It’s by far the longest time I’ve spent working on any one thing, and I feel very blessed to have been able to work with my partners, colleagues, founders, and collaborators. at exit due to dilution.

IRR 205

IRR Dilution Founder Portfolio 205

Both Sides of the Table

MAY 9, 2018

You race back to the office to tell everybody how well it went and you wait for the follow-up call to have a partners’ meeting or talk about term sheets or at least dip into due diligence. I left the meeting and had to attend a 3-hour board meeting where two founders have been fighting and each want the other one fired. I remember.

Software Review 381

Software Review Churn Rate Due Diligence New York 381

Startup Professionals Musings

MAY 8, 2022

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The downside is loss of control and financial dilution.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

View from Seed

AUGUST 17, 2021

A few weeks ago, we hosted a small dinner for a number of portfolio company founders, LP’s, and friends of the firm. It’s by far the longest time I’ve spent working on any one thing, and I feel very blessed to have been able to work with my partners, colleagues, founders, and collaborators. at exit due to dilution.

IRR 156

IRR Dilution Founder Portfolio 156

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. Key founder vesting should have no cliff. This is called stock dilution control.

Stock 240

Stock .Net Vesting Founder Vesting 240

Feld Thoughts

MARCH 24, 2017

Foundry Group is best known for our investments in startups, but our vehicle currently investing in other venture funds, Foundry Group Next, is off to what we believe to be a great start and I wanted to share an update about it by talking about our new investment in a fund managed by Founder Collective.

Founder 75

Founder LP Technical Review Seed Stage 75

View from Seed

AUGUST 17, 2021

A few weeks ago, we hosted a small dinner for a number of portfolio company founders, LP’s, and friends of the firm. It’s by far the longest time I’ve spent working on any one thing, and I feel very blessed to have been able to work with my partners, colleagues, founders, and collaborators. at exit due to dilution.

IRR 136

IRR Dilution Founder Portfolio 136

Startup Professionals Musings

JANUARY 31, 2020

The simple solution I recommend to inventors is to find a partner who can focus on business and marketing, while you focus on technology. In fact, they may fear team leadership as a burden, or a potential dilution of their ownership. Two people with complementary skills are often equal to three.

Founder 312

Founder Intellectual Property Dilution Startup 312

The Next Web

NOVEMBER 20, 2013

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. If people are funding the business, they should get a premium because at the end of the day, cash funding founders are acting no different than a seed stage investor. Whose idea was it?

Cofounder 136

Cofounder Equity Founder Seed Stage 136

Startup Professionals Musings

AUGUST 24, 2016

I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. Giving a co-founder a salary won’t get you the “fire in the belly” you want. Each co-founder should get equity for value, based on these key variables: Lived a key role in a previous startup.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

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. Key founder vesting should have no cliff. This is called stock dilution control.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

The Startup Magazine

MARCH 14, 2022

A business plan is drawn up to attract investors and partners. At this stage, the founder mainly raises funding from their sources or family and friends. The equity dilution at this nascent stage is on desirable terms; such investing can lead to profitable returns. 2) Laying out the genesis of the company. 3) Company formation.

Technical Review 142

Technical Review Due Diligence India Startup 142

Both Sides of the Table

FEBRUARY 20, 2019

One of the things that founders have the most angst about is whom they should have on their board and at what stage of the business. Why you should set up a board at the seed round of funding I know these days with SAFE documents and rolling convertible notes many founders prefer not to set up a board early on.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Both Sides of the Table

AUGUST 14, 2017

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. That’s true.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

David Teten

AUGUST 19, 2019

RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

JANUARY 19, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Up and Running

JULY 2, 2014

Picking the right attorney in your startup is as important as picking the right business partner. My business partner and I made many mistakes in our first tech startup, and so many of them were the result of choosing a lawyer who was a terrible fit. My business partner and I were elated. ownership and never dilute.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Both Sides of the Table

MAY 9, 2011

I covered what I call “the co-founder mythology.&# Either you’re not technical and you think you need a technical co-founder or vice-versa. Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Hire your co-founder. Vested over 4 years.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Both Sides of the Table

AUGUST 3, 2010

years ago and told me, “I just got offered the chance to buy this company because the founder doesn’t want to continue. 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.

Merger 276

Merger Technical Review Early Stage Dilution 276

YoungUpstarts

SEPTEMBER 16, 2015

by John Vrionis, partner at Lightspeed Venture Partners. Raise too much capital at any given stage and suffer more dilution than is necessary – obviously not ideal. John Vrionis is a partner at Lightspeed Venture Partners who focuses primarily on early stage enterprise and consumer technology investments.

Valuation 100

Valuation Dilution Chicago Technical Review 100

Both Sides of the Table

OCTOBER 12, 2014

People all across the value chain have taken notice including Limited Partners who are the people who invest in VC funds in the first place. This might happen because to meet all investors needs they end up selling too much of the company, taking too much dilution and feeling beat up. Why prorata rights are now sought out by LPs.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Startup Professionals Musings

JULY 19, 2013

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-Founders to help you? The downside is loss of control and financial dilution.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

View from Seed

APRIL 30, 2015

What is it, and how should founders think about it? note: We’d like to be extra clear that founders should not take on venture debt if they don’t have 100% visibility into repaying the loan, as banks that need to recoup their loan my force the company or you as the guarantor into liquidation or bankruptcy.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

YoungUpstarts

OCTOBER 16, 2016

By Bryan Miles, CEO and co-founder, Miles Advisory Group, Inc. We witness so many of the subtle gains of our labor – ideas made real, people turned passionate partners and the prospects of inching ever-closer to a long-term future rather than the great likelihood of total business failure. Re-set the vendor and partner paradigm.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

Genuine VC

JULY 19, 2010

Micro VCs will continue to come in many flavors with slightly different strategies, but there are a few distinctive defining characteristics: On a per partner basis, each investor is investing less than $25M in any given fund. The capital deployment velocity is notably higher than a traditional 1-2 investment per partner per year.

Seed Stage 175

Seed Stage Technical Review Dilution Offshore 175

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

Berkonomics

AUGUST 10, 2023

From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering. There is no middle ground. Resetting your priorities Taking money from these sources involves resetting priorities over time.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

View from Seed

DECEMBER 4, 2019

The trends described above in VC performance have an upstream effect on Limited Partners which is somewhat counter-intuitive. These growth rounds may be more dilutive than planned, but will still occur without punitive terms and allow founders, teams, and early investors to emerge with very successful outcomes at the very end.

LP 256

LP IRR Distribution Portfolio 256

Startup Professionals Musings

MARCH 23, 2014

Even though the class is common stock, Founders can negotiate special vesting and other terms as part of their stock restriction agreement upon venture investment. Here are some typical special terms and considerations for Founder’s stock: Negligible real value. Stock dilution control. Vesting with no cliff.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Up and Running

JULY 1, 2020

Businesses start when their founders see a need for a product or service that they can provide. 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

Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The downside is loss of control and financial dilution.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Both Sides of the Table

SEPTEMBER 10, 2021

They might be ideas they hatch internally (via a Foundry) or a founder who just left SpaceX and raises money to search for an idea. two founders in a garage?—?(HP The most connected and high-potential founders start with wads of cash. each with partners as the lead. The legends of Silicon Valley?—?two HP Style) are dead.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Startup Professionals Musings

JANUARY 22, 2013

Even though the class is common stock, founders can negotiate special vesting and other terms as part of their stock restriction agreement upon venture investment. Here are some typical special terms and considerations for founder’s stock: Negligible real value. Stock dilution control. Vesting with no cliff.

Vesting 245

Vesting Common Stock Stock Founder Vesting 245