Berkonomics

AUGUST 3, 2023

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). For those of you who fit that description, nice work. Often private equity investors will want control of the business as well.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Steve Blank

JULY 19, 2010

They also know that most founding CEO’s don’t scale past the early stage. Where’s My Liquidity Event. The goal of your business model can be revenue, or profits, or users, or click-throughs (or even just to get the technology into production) – whatever the founders and their investors have agreed upon.

Vesting 255

Vesting Liquidity Event Venture Capital Founder Vesting 255

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. A company can have value, even if there is no current income or revenue.

Valuation 100

Valuation Stock Options CPA Merger 100

Berkonomics

DECEMBER 17, 2020

Let’s take a few minutes to examine the kind of equity financing available to small or early stage businesses. There are other classes of equity investors for small or early stage businesses that we have not yet considered. Friends and family investors. Angel investment groups or funds. And the one thing in common?

Equity 62

Equity Finance Liquidity Event Angel Groups 62

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). For you who fit that description, nice work. Often private equity investors will want control of the business as well.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Both Sides of the Table

SEPTEMBER 27, 2010

If the company is moderately successful, growing and has great prospects for the future than a small liquidity event will help founders & venture capitalists to be aligned. The hardest thing is deciding what the right time to allow founder liquidity is. It is such a disconnect. We saw this with VC backed companies in 07/08.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Gust

SEPTEMBER 5, 2012

Turn the question on its head: How could it make sense to lend money to a brand new, seed-stage company with no revenue, no products, and no collateral? (You Convertible debt is a venerable instrument, originally created to “bridge” a later-stage startup from one VC round to the next quickly and easily.

Finance 134

Finance Convertible Security Equity Seed Stage 134

Berkonomics

MAY 26, 2010

They include an expense account, company car, profit sharing, 401k contributions, medical coverage for dependents, free life insurance, educational payments, extra vacation, relocation expenses, paid trips to industry association meetings, or a small override on revenue from new products developed under the candidate’s watch. .

Employee 54

Employee Liquidity Event Stock Options Salary 54

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. As the business owners had a longer-term perspective, decisions were made with greater deliberation and with a more conservative recognition of risk.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Steve Blank

JUNE 11, 2013

The test is: If you add one more sales person or spend more marketing dollars, does your sales revenue go up by more than your expenses? What are revenue strategy and pricing tactics? And at this early stage you’ll be giving up a larger percentage of your firm to investors. What problems do they want solved?

Venture Capital 334

Venture Capital IRR Liquidity Event Business Model 334

Steve Blank

JUNE 11, 2013

The test is: If you add one more sales person or spend more marketing dollars, does your sales revenue go up by more than your expenses? What are revenue strategy and pricing tactics? And at this early stage you’ll be giving up a larger percentage of your firm to investors. What problems do they want solved?

Venture Capital 226

Venture Capital IRR Liquidity Event Business Model 226

Berkonomics

APRIL 3, 2014

There are three classes of equity investors for early stage businesses that we have not yet considered. VCs often invest no less than $2 million in a single deal, finding it difficult to put less money to work and still spend time on boards and coaching entrepreneurs to a successful liquidity event.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Steve Blank

JULY 2, 2009

You can be an Independent studio or do “work for hire&# (either a revenue share or buy-out model) - If you’re an independent studio you have a set of choices for distribution channel and marketing models. - We understood none of this. More detail in future posts. But I wonder if the success is due to or in spite of VCs.

Silicon Valley 120

Silicon Valley Technical Review RSS Software Review 120

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? Dont worry about giving up too much equity at an early stage. Here are some "average" guidelines for equity percentages at a liquidity event. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

Up and Running

SEPTEMBER 20, 2021

A convertible note is like a loan, but this amount can be converted into company equity later on, usually during a liquidation event, like the acquisition of the company. The popularity of convertible notes is increasing in the world of startup financing, especially in seed-stage companies. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Berkonomics

DECEMBER 19, 2013

If you are an investor in an early stage venture, wouldn’t a dialog using these questions help greatly in defining and perhaps reducing your risk? Revenue projections: What will happen to the company if the revenues and earnings projected on a worst case basis are not achieved as predicted? a 33% discount. www.berkus.com.

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. Never in the history of venture capital have early stage startups had access to so much capital. The same thing happened to many Internet stocks. Competition also has access to capital.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Seeing Both Sides

SEPTEMBER 15, 2015

To answer these questions, we built a database of 112 Israeli companies founded between 1996 and 2013 that have met or exceeded $20 million in revenue. These are also questions that will concern late-stage investors who provide the companies the opportunities to scale and, eventually, go public. Partner with Foreign VCs.

Cofounder 20

Cofounder Technical Review United States 20

www.quora.com

JANUARY 16, 2011

What did you take from idea on the back of a napkin to liquidity event? As a developer, I feel that design/creative is undervalued in the early stages of product development. to echo Yyz earlier you need to prove early stage market traction! Now we turn it around. What companies have you launched?

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42