Startup Professionals Musings

MAY 22, 2020

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Every startup should have at least a couple of outside advisors who are not major investors or family members, anxious to talk to new investors and key new hires. When did this effort really start, including pivots?

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

Startup Professionals Musings

FEBRUARY 9, 2020

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow. The industry veteran.

Technical Cofounder 308

Technical Cofounder Cofounder Advisory Board Stock Options 308

Startup Professionals Musings

OCTOBER 30, 2017

The “venture capital” model is the only option they know, where they feel they get no mercy, giving up equity and control. The basic categories include equity, straight debt, convertible debt, services, and agreements for future equity. Document the investment types you are willing to consider.

Technical Review 220

Technical Review Accredited Investor Due Diligence Equity 220

Startup Professionals Musings

FEBRUARY 18, 2023

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Every startup should have at least a couple of outside advisors who are not major investors or family members, anxious to talk to new investors and key new hires. When did this effort really start, including pivots?

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Startup Professionals Musings

JANUARY 18, 2020

Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold. Every young entrepreneur needs an experienced partner for credibility with investors, and as a trusted cohort for strategy and growth discussions. Member of the Advisory Board. Personnel Manager.

Advisory Board 312

Advisory Board Startup Dividend Angel Investor 312

Startup Professionals Musings

SEPTEMBER 29, 2018

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

Startup Professionals Musings

SEPTEMBER 25, 2023

The average amount per startup has been $23,000, usually in the form of a convertible loan, rather than an equity investment. The vehicle of choice is most often a convertible note, which is really a loan with a specified duration and interest, with an option to convert it to equity when professional investors come in later.

Sweat Equity 274

Sweat Equity Elevator Pitch Startup Equity 274

Startup Professionals Musings

DECEMBER 23, 2013

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Need expensive resources up front.

Bootstrapping 252

Bootstrapping Sweat Equity Entrepreneur Technical Review 252

Startup Professionals Musings

OCTOBER 5, 2014

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

APRIL 23, 2013

Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself. Every outside hire increases your cost and risk. Hire experts, not help. startup control equity bootstrapping Rich Christiansen business' Do it yourself.

Equity 241

Equity Bootstrapping Startup Merger 241

Startup Professionals Musings

FEBRUARY 21, 2012

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. This will equate to 2 working founders (taking no salary), hiring a 5-person development team for a year. Great strategy. Do it yourself and barter for services.

Burn Rate 232

Burn Rate Startup Salary Equity 232

Startup Professionals Musings

JUNE 12, 2015

Every investor in your startup, even friends and family, normally expects a share of your company (equity), which means your return for all your effort goes down quickly. This is at least double the time required for most equity investments, and may be a delay you can’t afford in keeping up with the market and your competitors.

SBIR 120

SBIR Equity Technical Review Early Stage 120

Startup Professionals Musings

NOVEMBER 13, 2012

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Need expensive resources up front.

Sweat Equity 239

Sweat Equity Technical Review Bootstrapping Equity 239

Startup Professionals Musings

JANUARY 28, 2011

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. This will equate to 2 working founders (taking no salary), hiring a 5-person development team for a year. Great strategy. Do it yourself and barter for services.

Burn Rate 231

Burn Rate Startup Salary Equity 231

Startup Professionals Musings

SEPTEMBER 22, 2011

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Need expensive resources up front.

Sweat Equity 255

Sweat Equity Technical Review Entrepreneur Bootstrapping 255

Startup Professionals Musings

MAY 18, 2020

With one of the many new tools , and a dose of sweat equity, you can create a website for almost nothing -- and you are on your way to success with ecommerce, your latest invention or personal services. With the unlimited access to “how-to” videos and detailed instructions on the Internet, you shouldn’t need to hire experts for most things.

Hockey Stick 423

Hockey Stick Bootstrapping Sweat Equity Intellectual Property 423

Startup Professionals Musings

NOVEMBER 1, 2014

Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold. Every young entrepreneur needs an experienced partner for credibility with investors, and as a trusted cohort for strategy and growth discussions. Member of the Advisory Board. Personnel Manager.

Entrepreneur 266

Entrepreneur Advisory Board Dividend Angel Investor 266

Startup Professionals Musings

SEPTEMBER 14, 2016

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

Startup Professionals Musings

FEBRUARY 18, 2018

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow. The industry veteran.

Technical Cofounder 144

Technical Cofounder Cofounder Advisory Board Startup 144

Startup Professionals Musings

APRIL 17, 2023

You are now entering the rollout stage , with money required for marketing, hiring a full-time team, and a production process. The new investors you need at this stage are investment bankers, private equity, or competitors, to buy you out via merger or acquisition (M&A), or to go public with an Initial Public Offering (IPO).

Angel Investor 313

Angel Investor Intellectual Property Investment Bankers Private Equity 313

Startup Professionals Musings

JANUARY 11, 2021

The average amount per startup has been $23,000, usually in the form of a convertible loan, rather than an equity investment. The vehicle of choice is most often a convertible note, which is really a loan with a specified duration and interest, with an option to convert it to equity when professional investors come in later.

Sweat Equity 346

Sweat Equity Elevator Pitch Equity Venture Capital 346

Startup Professionals Musings

MARCH 16, 2016

Sweat equity. This unpaid work component is sized in dollars, added to any funds contributed, to represent the total contribution of a founding partner and converted to an equity ownership percentage in a new startup. Equity crowdfunding. Expect your skills, insights and motivation to be tested -- so be prepared.

Software Review 120

Software Review Sweat Equity Accredited Investor Angel Investor 120

Startup Professionals Musings

JUNE 11, 2014

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow. The industry veteran.

Technical Cofounder 245

Technical Cofounder Cofounder Advisory Board Startup 245

Startup Professionals Musings

JULY 5, 2023

The alternative is to work with an innovation institute to evaluate your technology, or hire a consultant. Sometimes these will ask for 5%-15% of your equity for their support services. If you need help at this stage, look for a local university teaching online courses on entrepreneurship , or how to build a business plan.

Incubator 305

Incubator Startup Exit Strategy Institutional Investors 305

Startup Professionals Musings

NOVEMBER 6, 2020

It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. Personal income is related to operations versus equity. With major investors, your equity and return is diluted and delayed.

Small Business 311

Small Business Small Business Administration SBA Equity 311

Startup Professionals Musings

MAY 30, 2022

They need a large infusion from venture capitalists, private equity, bank loans, or mezzanine financing. Hire more help than helpers. You can hire the best salespeople, have great products and define good metrics, but without decisive and innovative managers, the sales organization will not reach its full potential.

Mezzanine 368

Mezzanine Private Equity Bandwidth Metrics 368

Startup Professionals Musings

OCTOBER 20, 2023

These advisors need a stake in your success, like a monthly stipend, or an equity share of the business. Keep up with new technology for internal processes, actively hire people with new skills, and provide industry training for exposure to new techniques and competition. This is not a place for friends and family.

Marketing 290

Marketing Leadership Differentiation Equity 290

Startup Professionals Musings

JULY 22, 2020

You are now entering the rollout stage , with money required for marketing, hiring a full-time team, and a production process. The new investors you need at this stage are investment bankers, private equity, or competitors, to buy you out via merger or acquisition (M&A), or to go public with an Initial Public Offering (IPO).

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Startup Professionals Musings

SEPTEMBER 13, 2015

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow. The industry veteran.

Technical Cofounder 120

Technical Cofounder Cofounder Advisory Board Stock Options 120

Startup Professionals Musings

OCTOBER 12, 2020

The alternative is to work with an innovation institute to evaluate your technology, or hire a consultant. Sometimes these will ask for 5%-15% of your equity for their support services. If you need help at this stage, look for a local university teaching online courses on entrepreneurship , or how to build a business plan.

Incubator 429

Incubator Startup Exit Strategy Institutional Investors 429

Startup Professionals Musings

FEBRUARY 5, 2010

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. This will equate to 2 working founders (taking no salary), hiring a 5-person development team for a year. Great strategy. Do it yourself and barter for services.

Burn Rate 120

Burn Rate Startup Salary Equity 120

Startup Professionals Musings

APRIL 10, 2016

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Every startup should have at least a couple of outside advisors who are not major investors or family members, anxious to talk to new investors and key new hires. When did this effort really start, including pivots?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

DECEMBER 1, 2021

Make sure your hiring practices include diversity, inclusion, and equity. I recently saw that many companies were slow in adopting pandemic required virtual workplaces, plexiglass barriers, and restaurant tables outside. Some of these companies no longer exist. Practice your agility.

Agile 321

Agile Differentiation Lead Generation Social Media 321

Startup Professionals Musings

JUNE 8, 2019

Hire the best people and continually upgrade your team. A big mistake often made in the rush to scale is to shortcut the hiring and training processes, to get out there fast, assuming that the team can learn on the job. Build your brand equity and relationships with customers.

Angel Investor 220

Angel Investor Equity Leadership Demand 220

Startup Professionals Musings

APRIL 8, 2015

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Every startup should have at least a couple of outside advisors who are not major investors or family members, anxious to talk to new investors and key new hires. When did this effort really start, including pivots?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Startup Professionals Musings

SEPTEMBER 1, 2019

They need a large infusion from venture capitalists, private equity, bank loans, or mezzanine financing. Hire more help than helpers. You can hire the best salespeople, have great products and define good metrics, but without decisive and innovative managers, the sales organization will not reach its full potential.

Mezzanine 244

Mezzanine Private Equity Startup Bandwidth 244

Startup Professionals Musings

DECEMBER 28, 2018

The alternative is to work with an innovation institute to evaluate your technology, or hire a consultant. Sometimes these will ask for 5%-15% of your equity for their support services. If you need help at this stage, look for a local university teaching online courses on entrepreneurship , or how to build a business plan.

Incubator 236

Incubator Exit Strategy Institutional Investors Angel Investor 236