YoungUpstarts
JUNE 12, 2018
They work with attorneys to form corporate structures and help with financing agreements. California and Massachusetts have state minimum taxes, whereas states such as Alabama and Tennessee impose franchise tax based on capital/equity.
ReadWriteStart
SEPTEMBER 10, 2010
Whether it is credit or equity, funding is very, very tight. I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though). In 1M/1M, our preferred financing strategy is customers.
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ReadWriteStart
OCTOBER 7, 2010
Bottom line, early stage equity is very, very expensive. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I
ReadWriteStart
DECEMBER 9, 2010
Jacqueline asked an important question: how do you mitigate your working capital challenges in an e-commerce company at the very early stages without raising financing? First, there are two primary aspects that have to be managed: inventory financing and customer acquisition costs. Well, there are multiple nuances to the answer.
ReadWriteStart
JANUARY 27, 2011
And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. The business is already profitable with $2.9 million in revenue. Well, I didn't think much of it.
ReadWriteStart
DECEMBER 16, 2010
The company is profitable and has so far raised only $400,000 in friends and family and angel financing. At this point, he can grow organically and leverage channel partners and other creative modes of non-equity financing and preserve equity as much as possible. Jimmy asked if he should be raising money at this point.
ReadWriteStart
MAY 26, 2011
Finally, we had a discussion on Adam's proposal to sell 20% of his equity for $50,000, which I thought was preposterous. Adam needs a crash course on financing and should go digest the 1M/1M curriculum module on that topic ASAP. Of course, this needs to be validated. That's like selling your prized assets for nothing in a flea market.
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