Gust

JULY 7, 2022

Welcome to the Gust Launch Founder Spotlight! Gust Launch supports a variety of exciting founders doing amazing things. In this ongoing series we’ll highlight the experiences of Gust Launch founders, in their own words, as they navigate the challenges of early-stage entrepreneurship. Want to share your story?

Early Stage 91

Early Stage Founder 91

Gust

JULY 15, 2012

Every startup faces a myriad of challenges that are well beyond the scope of any founder, so you need a few guiding lights to illuminate the road ahead. I recommend that every early-stage startup find three Advisory Board members. Make sure they are willing to check their egos at the door. Let’s talk specifics.

Advisory Board 178

Advisory Board Technical Review Startup Software Review 178

Gust

OCTOBER 28, 2022

As a founder, you likely have a lot on your mind. It’s important to raise capital to support growth and scalability in the early stages. Raising capital for your startup is probably near the top of your mental "to-do" list, but chances are you haven't really gotten around to starting on it just yet.

Early Stage 91

Early Stage Startup Founder 91

Gust

DECEMBER 1, 2011

When meeting with early stage entrepreneurs for the first time, after reviewing a demo or hearing their pitch, I often ask them to articulate what they’re most focused on building. I don’t fault entrepreneurs for relegating startup legal work to the bottom of their daily triage list; founders are spread incredibly thin.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Gust

APRIL 28, 2022

Every early-stage startup has a unique set of constraints it must deal with and trade-offs that must be made along the way to launch its product into the market. From product development, to legal, to go-to-market strategy, even the most seasoned startup founder can make potentially business-crushing missteps.

Product 91

Product Early Stage Product Development Founder 91

Gust

DECEMBER 18, 2013

Assuming the company is able to make effective use of the seed money to greatly increase the value of the enterprise, all of that value therefore accrues to the founder, rather than the investor.

Valuation 150

Valuation Founder Seed Money Common Stock 150

Gust

JUNE 17, 2012

Yet, I find that startup founders often fixate on one or two sources, often to the detriment of their business. After bootstrapping, friends and family are the most common funding sources for early-stage startups. Just don’t quit your day job before your new company is producing revenue. Friends and family.

Technical Review 164

Technical Review Bootstrapping Venture Capital Incubator 164

Gust

JUNE 7, 2014

In many, if not most, seed and early stage funding scenarios, the investments are structured in LIFO order: Last In, First Out. 9) Common Stock (including any Preferred that converted to Common, any exercised options, and all Founders stock) and Common stock warrants. 2) Secured creditors. 3) Un-secured trade creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Gust

JANUARY 4, 2012

I’d like to take a step back and discuss the significance of IP as a component of the overall value that founders intend to create as they grow the company. The questions that arise most with respect to any category of IP at the earliest stages include: How will this affect our chances of getting funded on favorable terms ?

Intellectual Property 143

Intellectual Property IP Startup United States 143

Gust

JULY 23, 2014

You can find this in a number of places, but in a nutshell, I prefer to invest in highly-scalable, technology-based ventures, with a particular focus on platforms, at a very, very early stage (but, oxymoronically, where there is already some type of traction).

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

Gust

NOVEMBER 8, 2012

Nevertheless, there are literally thousands of other examples scattered around the country, each of which grew from a founder or two with an idea to a successful growth company employing scores, hundreds or even thousands of skilled employees, with the attendant benefits to the local and national economy.

Silicon Valley 187

Silicon Valley San Francisco Intellectual Property Accredited Investor 187

Gust

APRIL 9, 2014

The Founder of a company starts by owning all the shares representing ownership of the company. Uncategorized company equity dilution founder investors startup' Equity dilution works when the same pie is divided among more people. original post can be found on Quora @ [link] *.

Dilution 150

Dilution Equity Vesting Stock Options 150

Gust

OCTOBER 12, 2014

An older but still relevant study, published by CB Insights, Venture Capital Human Capital Report , summarizes a variety of characteristics for private early-stage Internet ventures funded in the US. The significant findings include the following: Founders need to live in the right place. No surprises here.

Silicon Valley 182

Silicon Valley Venture Capital Massachusetts California 182

Gust

JANUARY 22, 2014

This is obviously a softball question that I’ve been Asked to Answer, as I’m the Founder/CEO of Gust. Gust is the infrastructure that underlies much of the professional world of early stage finance. The answer, of course, is Gust —because that’s exactly the purpose behind the platform!

Angel Investor 150

Angel Investor Angel Groups Accredited Investor Early Stage 150

Gust

JANUARY 25, 2016

Early-stage technology company valuations are generally a crap-shoot. New founders may think that startup valuations work like this: I figure out what the value of my existing company is I figure. Bill Payne did a great post about this in October 2011.

Valuation 70

Valuation Early Stage Startup Founder 70

Gust

DECEMBER 8, 2013

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. These are the questions that get past the hype of a founder “vision to change the world,” and into the realm of real business strengths, weaknesses, and current health.

Due Diligence 174

Due Diligence Sweat Equity Intellectual Property Burn Rate 174

Gust

NOVEMBER 18, 2012

Two founders have spent $200K of personal and family funds over a one year period to start the company, get a prototype site up and running, and have already generated some “buzz” in the Internet community. On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

APRIL 23, 2014

Note: The author of this answer is completely biased, as he is the founder and CEO of the aforementioned platform. The result is that nearly $2 billion has been invested directly as primary investments into more companies than in total are traded on the NYSE and NASDAQ combined. original post can be found on Quora @ [link] *.

Angel Groups 127

Angel Groups Accredited Investor Private Equity Deal Flow 127

Gust

JANUARY 22, 2014

This is obviously a softball question that I’ve been Asked to Answer, as I’m the Founder/CEO of Gust. Gust is the infrastructure that underlies much of the professional world of early stage finance. The answer, of course, is Gust —because that’s exactly the purpose behind the platform!

Angel Investor 89

Angel Investor Angel Groups Accredited Investor Early Stage 89

Gust

FEBRUARY 1, 2014

In addition to doing the kinds of things that anyone (employee, friend, parent, founder, etc.) The ideal angel investor would spend a great deal of his/her time working on behalf of the company in support of the CEO, in every way other than being a full-time employee.

Angel Investor 148

Angel Investor Startup IPO Early Stage 148

Gust

JULY 23, 2012

However, for investors and founders, it may be helpful to think outside the box when it comes to giving. Q: Wouldn’t a contribution of early-stage company stock have a very small impact? In fact, the contribution of early-stage company stock can have tremendous impact. per share.

Stock 114

Stock Capital Gains Warrant Stock Options 114

Gust

OCTOBER 12, 2011

Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs. Without any other language to the contrary, the Notes become due and payable in full, including principal and accrued interest.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

SEPTEMBER 29, 2011

It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal. This is not the kind of loan that is expected to be repaid; early stage startup investments are risky, and there typically isn’t much to go after if the business fails.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In most cases, an early stage startup will raise seed capital from more than one investor. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

NOVEMBER 29, 2011

Consider the following; Inexperienced investors may see every opportunity as the next Facebook and may not understand the risks inherent in investing in early stage companies. Bill Clark, founder of MicroVenture Marketplace, Inc. Unfortunately, there are some downsides to crowd funding.

Securities and Exchange Commission 154

Securities and Exchange Commission Accredited Investor Angel Investor Due Diligence 154

Gust

SEPTEMBER 17, 2014

I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. But most VCs don’t bother so many convertible note founders get screwed and never know it until they sell their companies. There are a bunch of ways to offer cheaper pricing to people who commit early without notes.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

OCTOBER 21, 2011

In descending order of preference from the founders’ point of view: 1. Assuming a hypothetical $100,000 investment at a 10% interest rate, this kind of payoff would yield a return of $5,000 ( 5% ) six months later – not exactly the kind of return angel investors are looking for when they make risky early stage investments.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

OCTOBER 8, 2014

There weren’t a lot of seed funds in 2007 so this was often done by angels, funding consortia or sometimes early-stage funds that existed then (First Round Capital, True Ventures, SoftTech VC, etc.). Equally silly were advisors & entrepreneurs insisting that founders use convertible notes but we funded a few of those, too.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

Gust

SEPTEMBER 5, 2012

” Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum” Taku , a partner at my “alma mater” law firm Wilson Sonsini Goodrich & Rosati , created quite a stir this past week by announcing a new set of template deal documents dubbed “ Convertible Equity.”

Finance 134

Finance Convertible Security Equity Seed Stage 134

Gust

DECEMBER 27, 2012

Keep in mind that any cash you put in will remain in the company as Founders’ Equity, and will only come back to you on a successful exit in which your investors make money. [3a. This will NOT be your family lawyer, or the one who helped you beat that traffic ticket.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

Gust

MAY 24, 2012

Some commentators have suggested this is the wave of the future, signifying a shift in the balance of power from investors to founders of the relatively small, elite group of growth companies that make it to public markets. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Gust

OCTOBER 20, 2011

This worksheet provides the investor with a basis for deciding if a start-up company should be valued near the top or bottom of the range of values that might reasonably be applied to such an early stage venture. Is the founder coachable? Experience in sales or technology. — No business experience. — Unwilling.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

OCTOBER 3, 2011

Once in, this money stays in, and is part of what makes up your Founder’s Equity (along with your work and your intellectual property.). A majority of companies that are started in the US begin and end with the first stage: the founders’ own money. From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

Gust

JULY 1, 2012

We are talking about angel investors here, meaning people who invest their own money in early-stage startups for a share of the equity. First-time founders will find that most angels turn into mirages. Early-stage these days means early customer revenue received, and early product in the market.

Angel Groups 143

Angel Groups Angel Investor Early Stage Startup 143

Gust

OCTOBER 8, 2014

A founder with a startup focused on selling groceries online should begin their pitch by describing the total money projected to be spent on groceries online over the coming years. To raise capital as a very early-stage business, you have to convince investors that your current size isn’t indicative of where you will be in the future.

Venture Capital 163

Venture Capital Finance Early Stage .Net 163

Gust

SEPTEMBER 13, 2011

Today’s unveiling of Gust , the global infrastructure for early stage entrepreneurial financing, is a milestone that has been seven years in the making.

Angel Investor 79

Angel Investor Silicon Valley Venture Capital Finance 79