Startup Professionals Musings

MARCH 9, 2018

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. In the interim, there is no market for the shares, and no dividends or interest.

Cram Down 148

Cram Down Angel Investor Equity Dividend 148

Startup Professionals Musings

OCTOBER 10, 2014

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. In the interim, there is no market for the shares, and no dividends or interest.

Founder 254

Founder Cram Down Angel Investor Equity 254

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Haystack

OCTOBER 2, 2019

Those of us in the early-stage tech ecosystem by now well know that saying “there are a LOT of seed and new startups” is a gross understatement. all together) combined with the culture of “demo days,” in-person gatherings where angels and professional investors collide with entrepreneurs.

Deal Flow 106

Deal Flow Cap Table Early Stage Institutional Investors 106

Startup Professionals Musings

APRIL 17, 2013

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. entrepreneurs friends and family fools startups investors business' Marty Zwilling.

Cram Down 230

Cram Down Angel Investor Equity Dividend 230

David Teten

JULY 3, 2013

what you need to know as an early stage investor: best practices in origination, evaluation, structuring and adding value. HBS Alumni Angels of Greater New York is comprised of Harvard alumni who invest in early-stage private companies on an individual basis and is the 3rd largest angel group in New York.

Angel Investor 114

Angel Investor New York Accredited Investor New York City 114

David Teten

JULY 3, 2013

what you need to know as an early stage investor: best practices in origination, evaluation, structuring and adding value. HBS Alumni Angels of Greater New York is comprised of Harvard alumni who invest in early-stage private companies on an individual basis and is the 3rd largest angel group in New York.

Angel Investor 114

Angel Investor New York Accredited Investor New York City 114

Startup Professionals Musings

NOVEMBER 11, 2015

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. In the interim, there is no market for the shares, and no dividends or interest.

Cram Down 120

Cram Down Angel Investor Equity Dividend 120

Both Sides of the Table

SEPTEMBER 25, 2011

Institutional investors will always insist on pro-rata rights. All it says is that the VC has the right (but not obligation) to invest his/her proportional ownership in the next round of financing. In the case of a super pro-rata right the investor (let’s say in your A round) will ask for MORE than their pro-rata right.

Entrepreneur 310

Entrepreneur Dilution Finance Silicon Valley 310

David Teten

AUGUST 21, 2019

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. 2) To sell their businesses when they want – early, mid term, or never.” . Works for early-stage companies.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

K9 Ventures

MAY 14, 2011

In my view the terminology being used for early stage investors by the press and the media is not as clear as it should be. I’ve talked about this on several occasions when I’ve been at conference and on panels, but I figured it would make sense to do a post explaining my taxonomy of the early-stage investing world.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Growthink Blog

MAY 10, 2012

The five main stages include the following: 1. Early Stage Investment (Series A & B) 4. Later Stage Investment (Series C, D, and so on) 5. Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. Pre-Seed Funding 2.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

David Teten

APRIL 7, 2017

This is the debut of an annual series of summits focused on sovereign wealth funds, institutional investors, family offices, venture capitalists, and entrepreneurs interested in technology-driven entrepreneurship and with ties to the Middle East and North Africa (MENA) region. Apply for the Startup Showcase here: [link].

New York 60

New York Africa Cofounder Egypt 60

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 21, 2011

It’s among the most-asked questions on startup forums, and an issue we’re dealing with right now at WPEngine as we bring on new employees: How do you decide how much equity (shares) to give a new employee or partner? Hard to know, but an important question for a bootstrap startup to answer! What about $Y/mo?&#

Equity 276

Equity Salary Hiring Institutional Investors 276

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Hunter Walker

SEPTEMBER 22, 2014

These “ piggy rounds ” usually left little room for other institutional investors, in contrast to traditional seed rounds which may include several funds collaborating. Accordingly, if a consumer startup hits escape velocity, this fund likely won’t have a shot at winning the A round. How This Impacts Homebrew.

Later Stage 95

Later Stage Valuation Semantic Institutional Investors 95

Both Sides of the Table

OCTOBER 1, 2009

There’s no doubt (at least anecdotally) that the pace of VC investments in early-stage technology companies has picked up in the past few months. I hear from several sources that Sequoia is very active in the market aggressively chasing several deals and even driving up prices on some early-stage deals.

IPO 255

IPO Investment Bankers Venture Capital Marketing 255

Both Sides of the Table

MAY 23, 2012

I have been close to the tech & startup sectors for more than 20 years and I can’t think of a period in which I felt more optimistic about the innovation and value creation I see in front of us. The number of startups being created has increased by an order of magnitude. Thank you, Aaron Sorkin! The Exit Problem.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Hunter Walker

APRIL 27, 2014

I’ve written before about our fundraising process and how it very much resembles that of a startup. Last week we held our first annual LP meeting, when venture funds get their investors together with updates on operations and results. Afternoon Session.

LP 97

LP Cofounder Term Sheet Valuation 97

David Teten

DECEMBER 3, 2019

See Bessemer Venture Partners’ A comprehensive guide to security for startups. Excel and Google simply aren’t going to cut it if you expect to build a high quality institutional investor base.”. Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Rob Go

JANUARY 7, 2013

Amidst the mass of new initiatives, new firms, new strategies, etc that constantly pop up in the early stage investing landscape, it’s helpful to have a clear articulation of what VC’s are focused on and how they see the world. Stage: Pre Product: 12. Here’s a good example from Volition Capital. Consumer: 9.

Portfolio 49

Portfolio Seed Stage Cofounder B2B 49

VC Cafe

FEBRUARY 6, 2011

VC investors rely heavily on referrals, but what should a non US startup do when looking to raise funding in Silicon Valley? I found a question on Quora that relates to European startups, but found that some of the advice may be very relevant to Israeli startups as well. If not, raise locally. Do the corporate flip.

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

Hunter Walker

SEPTEMBER 29, 2022

As more growth and crossover investors came into the startup ecosystem they were often eager to put capital to work and happy to consolidate their positions with common or preferred shares from early employees, founders and previous investors.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

YoungUpstarts

NOVEMBER 17, 2016

This change means that virtually any individual, not just the wealthy, will have opportunities to make equity investments in early stage companies. That suggests, potentially, more early stage capital for entrepreneurs. As a VC and angel investor, I believe deeply in entrepreneurs. Another way is with endorsement.

Equity 100

Equity United Kingdom Cap Table Oklahoma 100

VC Cafe

JUNE 9, 2010

The proposal will enable investors in startups to receive tax write-offs on investments for high-tech companies who spend at least 70% of their salaries in Israel. Today, most of the LPs for Israeli funds are foreign investors. Tax incentives for investors in early stage Israeli high-tech companies.

Technical Review 88

Technical Review Government Technology 88

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. If I put in $2MM and get out $10MM in a $50MM exit, that’s a solid 5x return.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

David Teten

NOVEMBER 15, 2013

Since I became an institutional investor, my #1 learning is: this is a highly unusual and somewhat baffling industry. Disruptable Pattern #5: Institutional investors are eager to cut larger checks rather than smaller ones. This is like a chef who likes to buy a whole cow in order to serve a client one hamburger.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

Rob Go

NOVEMBER 30, 2012

I was surprised to find that it has been more than two years since my post summarizing the state of the seed stage market, and trying to bring a balanced view on the rise of Super Angels and Micro-VC’s. The venture capital market continues to be in transition, and a lot of changes have occurred in the early stages of the market.

Seed Stage 55

Seed Stage Pre-Money Valuation Dilution Early Stage 55

Ben's Blog

MAY 24, 2021

Concerns have been raised around what this reveals about the price discovery process for IPOs and whether retail investors are disadvantaged relative to certain institutional investors that have access to purchase shares at the IPO process. First, as the below chart shows, IPO pops are not a new phenomenon.

SEC 36

SEC Accredited Investor IPO Technical Review 36

Up and Running

DECEMBER 9, 2014

Bates: Good morning and welcome to our CEO panel, “How to Fine-Tune Your Small Business Finances From Funding to Growth” which I think is the direction that we would all like to be going. I’m here with some really phenomenal CEOs who are going to talk to us today about small business finances from funding to growth.

Small Business 95

Small Business Finance Forecast Metrics 95

Steve Blank

AUGUST 19, 2013

But what if we could increase productivity and stave the capital flight by helping Life Sciences startups build their companies more efficiently? 75% or more of all the funds needed by a Life Science startup will be spent on clinical trials and regulatory approval. Pharma companies are staggering under the costs. WTF is going on?

Venture Capital 301

Venture Capital Startup Lean Philadelphia 301

VC Cafe

JUNE 19, 2020

There’s an increasing interest from institutional investors in particular, but also high-net-worth individuals, private banks and a variety of other players who are thinking to make more impact investments than we’ve seen in the past couple of years.”. The generational point is worth lingering on.

Venture Capital 174

Venture Capital Global South Africa 174