Berkonomics

FEBRUARY 23, 2017

Most of us work in our businesses, either as managers or owners, and rarely step outside to think about how this will end in a perfect world. Email readers, continue here…] But this question begs for a positive answer. It is a fair question. How would you like to see your finish line?

Liquidity Event 102

Liquidity Event Valuation Email Management 102

Berkonomics

NOVEMBER 1, 2018

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. I found myself in such a situation upon a sale of my computer software company. And a lack of plans for others.

Stock Options 192

Stock Options Stock Distribution Programming 192

Berkonomics

SEPTEMBER 20, 2018

Most entrepreneurs and certainly all investors would like to see “a positive liquidity event” (a good sale of the business) someday. This could be our intellectual property, our geographic reach, our superior product, our management team, or perhaps our dominant position. So, that’s the reason for this insight.

Liquidity Event 48

Liquidity Event Intellectual Property Naming Acquisition 48

Berkonomics

JUNE 12, 2014

It is rare when one person starts a company, supplies all the funding, and shares no management tasks or equity with others, and still grows the company to any significant size, worthy of a multi-million dollar opportunity to cash out at exit. Email readers, continue here.]

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Berkonomics

JUNE 15, 2017

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. So be aware that professional investors are in your company for the eventual large profits at the liquidity event.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Berkonomics

SEPTEMBER 27, 2018

Email readers, continue here…] I did forget to tell you that on that day looking into the company’s books I discovered that neither the company nor its founder had filed Federal income tax returns during the three years in business, didn’t I? The surprise I could not ignore. Our entrepreneur balked at the boldness of that statement.

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

Berkonomics

JANUARY 6, 2022

First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. This makes for some head-rubbing when attempting to calculate the return on investment with a proposed sale. and there are those accumulated dividends. …and

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Berkonomics

SEPTEMBER 24, 2015

While it is easy to divide all companies into just these two groups, this simplification ignores whether management has made a conscious, strategic choice about their growth. Email readers, continue here…] But this too is an overly simplistic view. This should be a major milestone goal of all start-ups.

Liquidity Event 48

Liquidity Event Ohio Acquisition Revenue 48

Berkonomics

SEPTEMBER 8, 2022

Email readers, continue here.] For corporate boards, even those not looking for a buyer at this time, I often help to manage this exercise in board meetings once every few years. A wise board and management would take their own hint and strengthen that core, whether it is your development team, your geographic dominance or other trait.

Partner 62

Partner Intellectual Property .Net Distribution 62

Berkonomics

JUNE 2, 2010

I discovered the power of employee feelings of ownership early in my management career, establishing an employee stock ownership plan (ESOP), once popular as incentive compensation as well as a tax write-off for corporations and even a way to slowly transfer ownership of a company from the founders to the employees.

Liquidity Event 86

Liquidity Event Stock Options IPO Stock 86

Berkonomics

FEBRUARY 23, 2023

Young companies have been known to outgrow the abilities of management to focus and direct them, failing to make the transition to organized, stable growth. Competitors, seeing a successful development of a niche, flock into the competitive void with products or services built with a fresh view of the current environment.

Dilution 62

Dilution Valuation Early Stage Equity 62

Berkonomics

OCTOBER 29, 2015

Taking money from professional investors such as angels or VCs usually requires that you agree to seek an exit for those investors in your plan, often targeting five to seven years as the ideal period for growth before a liquidity event. For some, that comfort is worth forgoing building high equity value.

Liquidity Event 48

Liquidity Event Equity Venture Capital Stock 48

Berkonomics

SEPTEMBER 13, 2011

This is an exercise I perform with my boards no less than once every several years in planning exercises attended by the board and senior management, sometimes augmented with an industry consultant or expert from the outside. Use a white board visible to the entire group. And that is most rewarding to see.

Intellectual Property 67

Intellectual Property Liquidity Event Acquisition Distribution 67

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). composed of these investors and management. For you who fit that description, nice work.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Berkonomics

JANUARY 13, 2022

Email readers, continue here…] But what about the pause to celebrate? Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale.

Dilution 62

Dilution .Net Sales Entrepreneur 62

Berkonomics

JANUARY 27, 2010

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. So be aware that professional investors are in your company for the eventual large profits at the liquidity event.

Liquidity Event 67

Liquidity Event Initial Public Offering Dividend Valuation 67

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Berkonomics

NOVEMBER 8, 2018

If you have now passed through the mind-numbing process of a successful sale of your company and the money is in the bank, enough to satisfy your needs, if not much more, then you have arrived at the point where you can think about love, belonging, esteem and self-actualization. How empowering.

Community 48

Community Email Sales Liquidity Event 48

Berkonomics

AUGUST 13, 2015

Dave’s note: John Huston is founder and past manager of the 300+ member Ohio TechAngel Funds and a past Chairman of both the Angel Capital Association and the Angel Resource Institute. . Cash spent on activities which do not burnish your attractiveness is cash squandered as you prepare for the sale. By John Huston.

Ohio 48

Ohio Acquisition Forecast Sales 48

Berkonomics

FEBRUARY 9, 2017

Young companies have been known to outgrow the abilities of management to focus and direct them, failing to make the transition to organized, stable growth. Companies sometime run out of cash in the midst of success, and often find that sources of loans or investment are not freely flowing at the moment of need.

Dilution 48

Dilution Valuation Early Stage Naming 48

Berkonomics

OCTOBER 28, 2011

Assuming that you have now passed through a successful sale of your shares in a business, and the money is in the bank, enough to at least temporarily satisfy your needs, if not much more, you have climbed the ladder within Maslow’s Hierarchy. Email readers, continue here.] How empowering.

Community 66

Community Sales Email Entrepreneur 66

Berkonomics

OCTOBER 8, 2015

Email readers, continue here…] First there comes a sense of relief, knowing that you no longer need to worry over daily cash or threats to your net worth. Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Many fail multiple times.

Entrepreneur 48

Entrepreneur Dilution .Net Sales 48

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to 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. There is a lot to say about retaining control.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Berkonomics

AUGUST 27, 2015

Many thought that they were starting companies for their children and grandchildren to inherit and manage. Email readers, continue here…] Now, when first meeting with an entrepreneur, I ask simply, “Is the business being formed as a Keeper or a Flipper?” What does all of this say about market levels and public attitudes?

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Berkonomics

OCTOBER 7, 2011

Managers almost always believe that stakeholders understand the pressures of the business and the circumstance of the present. . The truth is that many employees merely make a simple pact: timely pay for time in service.

Valuation 54

Valuation Dilution Down Round Employee 54

abovethecrowd.com

APRIL 20, 2016

These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. We have already seen examples of founders and management obtaining liquidity in front of investors. Late 2015 also brought the arrival of “mutual fund markdowns.” Now you make your own decisions.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.quora.com

JANUARY 16, 2011

The code behind airline reservations, visa transactions, and warehouse management systems, really did change the world beyond all recognition. Let's assume (for the sake of the argument) that I'm a complete failure at entrepreneurship and management. Leadership and management ability. Obviously not. So, be that guy.

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42

www.vccafe.com

MARCH 11, 2013

Whether you’re wondering what site search you should use or what is the best email marketing tool, knowledge is power. Email Integration. Task Management. Project Management Tools. Email marketing. Sendgrid : Need to send email out to users? They make sure that your emails never to go spam folders.

Software Review 53

Software Review Technical Review Startup 53

Software By Rob

SEPTEMBER 22, 2009

You won’t wind up on the cover of Fast Company for writing a waste management application. But you can build a very lucrative income if people in the waste management industry need your app. Follow Me on Twitter @robwalling Subscribe via Email Receive very occasional emails when I publish a new article.

Marketing 50

Marketing Software Review Technical Review Startup 50