Both Sides of the Table

OCTOBER 1, 2009

We spent our future since the equity was artificial. If you’re a startup, in bad times there is less over-funding of your competitors and therefore less pressure to give everything away for free. Tags: Pitching VCs Start-up Advice VC Industry startup technology vc venture capital. Consumer spending is where I’m dubious.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Both Sides of the Table

SEPTEMBER 25, 2010

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. Either would be fine with startups, so long as they can easily change their valuation. He’s fine with equity provided it’s cheap to paper it legally.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

APRIL 19, 2011

I recently sat down with Matt Coffin , the founder of LowerMyBills, which sold for $400 million but was very nearly a bankruptcy only a few years early, and talked “startups.&#. Matt is one of the most transparent, focused & honest startup guys you’ll meet. Or read the quick, informative summary below the image!

Acquisition 304

Acquisition Warrant Customer Term Sheet 304

Both Sides of the Table

AUGUST 30, 2010

Convertible debt is an investment that “converts&# into equity in the future usually at a discount to your next funding round price and sometimes has a “cap&# (maximum price). prefer equity to convertible debt): If you’re an early stage investor (e.g. Tags: Raising Venture Capital Startup Advice.

Equity 319

Equity Early Stage Angel Investor Valuation 319

Both Sides of the Table

AUGUST 14, 2017

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. ICOs certainly have a place in startup financing.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

JULY 16, 2010

So even within the “alternative class&# our LPs are looking at other asset investment choices such as distressed buyout funds, private equity or hedge funds. Then there is a certain size market for A round VCs, B round VCs and growth equity investors willing to put $50 million to work. VC will shrink. Oh yes it will.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JANUARY 21, 2010

If you’re a startup and you don’t have a close relationship with a few law firms you’re really missing one of the most important relationships that any entrepreneur can have. I write about some of the lessons in my post on Startup Mistakes. Every town has firms that focus on startups – find them.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

JANUARY 4, 2014

Yesterday I wrote a post about “ the politics of startups ” in which I asserted that all companies have politics, which in its purest sense is just about understanding human psychology. Equity for the future? Elie Seidman wrote in the comments section of my blog post on politics at startups. Startup Advice'

Founder 340

Founder Sacramento Cofounder Technical Review 340

Both Sides of the Table

AUGUST 3, 2010

There is a telltale sign of an inexperienced startup entrepreneur. As a startup you shouldn’t focus on buying other companies until you’ve figured out your own business. A close friend of mine in LA who is 3 years into his startup called me about 2.5 Tags: Startup Advice. They get premature merge elation.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

JUNE 30, 2011

Or the Cliff Note’s version: Open Source & Cloud Computing (led by Amazon) drove down tech startup costs by 90%. The result was a massive increase in startups & a whole group of new funding sources: both angels & “micro VCs&#. Continued high pace of startup innovation. I call this “stage drift.&#.

Venture Capital 289

Venture Capital Early Stage Valuation Angel Investor 289

Both Sides of the Table

JULY 26, 2015

Understanding your vulnerability and understanding the power of those with whom you must do business is a very important part of figuring out as a startup how to fit into the broader ecosystem and the art of statecraft is tremendously important in knowing when and how to project power in sales, recruiting, negotiations, fund raising, etc.

Oauth 150

Oauth Software Review Technical Review IPO 150

Both Sides of the Table

FEBRUARY 23, 2015

But not everybody has the right skills to build a highly successful and valuable startup from scratch. For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.” In fact, I would argue that most people don’t.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g. From pragmatic risk taking to risk aversion.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

DECEMBER 17, 2012

And that person has almost certainly chosen specifically to be a startup lawyer over serving other types of customers because he or she enjoys working with entrepreneurs. She was lamenting that some startups simply see their PR company as merely somebody who corrals the press when you want to get some inches.

Startup 363

Startup PR Venture Capital Angel Investor 363

Both Sides of the Table

AUGUST 12, 2010

In the technology world there are a few websites that most startups track to keep up with the latest financings, acquisitions, product announcements and gossip: BusinessInsider, TechCrunch, Mashable, GigaOm, etc. In the VC & Private Equity world there’s a small number, too, with one of the most respected being PEHub.

Seed Stage 232

Seed Stage Valuation Private Equity Venture Capital 232

Both Sides of the Table

MARCH 31, 2012

Her post is short & well written so definitely worth a read if you’re a startup person and want to hear some sensible views on sales. Erin’s main points: “As a former tech sales executive, I agree with many of [Mark's] lessons — when applied to later-stage, post-traction point startups.

Startup 319

Startup Early Stage Sales Cofounder 319

Both Sides of the Table

NOVEMBER 19, 2009

This is part of my Startup Advice series. So I was surprised at the sheer volumes of decisions that had to be made when I became a startup CEO. He would have found somebody technical and inspired that individual to work for equity or deferred payment. Tags: Entrepreneur Advice Startup Advice. I said that was my point.

Entrepreneur 414

Entrepreneur Fractional CTO Technical Review CTO Hire 414

Both Sides of the Table

JULY 12, 2011

2. Chris then discussed his time as founder and CEO of SiteAdvisor, his first venture-backed startup. 5. We then went back to talking about how to choose the space in which your startup is operating. The firm focuses on early stage companies in the Northeast but occasionally invests in California startups.

Technical Review 281

Technical Review Artificial Inteligence Cofounder API 281

Both Sides of the Table

MAY 28, 2018

Conversely many VCs believe that constraining cash can often lead to increases in creative solutions at a startup. It’s true that some later-stage private equity firms like to fund “roll ups” (a company that acquires many related companies in it sector), but this is seldom the domain of VCs. This is a red flag for VCs.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

MARCH 21, 2010

This is part of my ongoing series on Startup Advice. As startup entrepreneurs we all want to work with them because having their name as reference clients makes it so much easier for marketing, PR, selling to other customers, fund raising and even recruiting. The startup argues that they did free work so they saved cash.

Warrant 298

Warrant Dilution Startup Stock Options 298

Both Sides of the Table

MAY 27, 2013

You may know how much to pay in cash or equity for your new VP Engineering. Startup Advice' And you can often throw in a separate action like approving stock-option grants, getting approval for CAPEX spend, discussing fund raising timing – whatever. Always seek input. But asking your board will keep them engaged.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

AUGUST 26, 2010

Let’s say a senior member of your team demanded a pay raise (cash or equity) and you didn’t like the way they approached you. Tags: Startup Advice. I’d rather choose to be zen and maintain my public reputation. This also applies to internal company decisions. Sometimes the right thing to do is to given in completely.

Demand 340

Demand Equity Reputation Hosting 340

Both Sides of the Table

JANUARY 31, 2011

If you’ve taken the roller coaster ride that is a startup – you know what I’m talking about. The truth is that in my experience very, very few people really enjoy the “pure&# startup environment: months with no salary, months with no live product and lots of trial, error & rejection. It’s addicting. 8 beers that night.

Entrepreneur 384

Entrepreneur Startup Salary Egypt 384

Both Sides of the Table

DECEMBER 1, 2009

This is part of my ongoing series on Startup Advice. I advocate treating them like a co-founder in every way except when they join and how much equity they get. Tags: Entrepreneur Advice Startup Advice. I recommend that you start a company by yourself and own 100% of it. Take your inventory. Know thy weaknesses.

Hiring 289

Hiring Cofounder Dilution Startup 289

Both Sides of the Table

MAY 19, 2010

Another topic we debated early in the program was “lean startup” vs. “ fat startup ” where we both took the obvious hedge and said “it depends.” But truthfully both Dana and I are more aligned with the lean startup principles and believe you only go FAT when you’ve really proved out your product / market fit.

Partner 240

Partner New York City Cofounder Syndicate 240

Both Sides of the Table

SEPTEMBER 10, 2021

Today you have funders focused exclusively on “Day 0” startups or ones that aren’t even created yet. that broadly covers decentralized applications and possibly even decentralized autonomous organizations (which could imply that in the future VCs need to be more focused on token value and monetization than equity ownership models?—?we’ll

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

MARCH 11, 2010

Recently I’ve been debating with a number of young startup companies that are raising money in the next few months, “what is the right about of capital to raise at a startup?&#. Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. There are trade offs.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Both Sides of the Table

SEPTEMBER 23, 2010

Convertible or equity? Corporations need startups. Tags: Startup Advice. Have you looked at competition? How well financed is the competition? What is their market traction? How much are they raising? How much is soft-circled (committed)? At what valuation? Cap or warrants? Entrepreneurs need angels. Angels need VCs.

Entrepreneur 292

Entrepreneur Technical Review Stealth Valuation 292

Both Sides of the Table

JULY 11, 2010

I recently wrote a blog post about why I believe that startup teams in close proximity perform better. The CIC, founded in 1999, is located adjacent to MIT and has more than 100,000 sq ft of space for nearby startups that qualify to be housed there. As they showed me around the CIC I was instantly envious.

San Francisco 285

San Francisco Incubator Silicon Valley Startup 285

Both Sides of the Table

MARCH 6, 2010

When I was running startups I felt like a horse with blinders on because I was super focused on the content management market and ignored many other markets. Then I spent many years as a startup CEO. Still, it’s different in a startup. True, we’re paid better than many startup executives on an annual basis.

Technical Review 312

Technical Review Due Diligence Spain Warrant 312

Both Sides of the Table

SEPTEMBER 12, 2010

Many of the growth equity firms have had outbound dialing programs for years. Growth equity firms typically target profitable businesses that are often not technical in nature. These kind of companies were seldom startups. Perhaps outbound dialing / emailing programs worked well for growth equity firms in their core business.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Both Sides of the Table

APRIL 6, 2014

I know that in later-stage growth equity deals some firms even hire third-parties who will do the reference calls. Startup Lessons' I have been part of one deal where this happened and the level of detail from a professional reference checker was unbelievable. People with attitude problems. Negative people. Image purchased from 500px.

Technical Review 302

Technical Review Hiring Later Stage Employee 302

Both Sides of the Table

JANUARY 1, 2016

Having time to think about “leadership” at most startups feels like a luxury. The reality of most startups is about survival. We want to invest in early-stage technology enabled startup businesses – upfront in the funding cycle. We try to recruit investment partners who bring startup operating experience.

Leadership 150

Leadership Southern California San Diego Hiring 150

Both Sides of the Table

MAY 9, 2011

It is increasingly popular to have “founder dating&# or “startup weekend hackathons&# of some variety or the other. Give them a large sum of equity. Startups have high failure rates. And some of them will be from startups that are already very successful. Hire your co-founder. Vested over 4 years. Why risk it?

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Both Sides of the Table

MAY 19, 2018

The buyer is shopping for equity in startups and the seller is looking for cash in exchange for equity and shared governing control of his or her company. I never thought of this until I became the Founder & CEO of my first startup company. For starters you have to realize that fund-raising is a sales process.

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Both Sides of the Table

JANUARY 22, 2011

If you’ve taken the roller coaster ride that is a startup – you know what I’m talking about. The truth is that in my experience very, very few people really enjoy the “pure&# startup environment: months with no salary, months with no live product and lots of trial, error & rejection. It’s addicting. 8 beers that night.

Entrepreneur 176

Entrepreneur Startup Salary Egypt 176