Both Sides of the Table

SEPTEMBER 17, 2011

Dilute your cash, equity or both. Create hassles for post-merger integration of technology or teams. What will it do? Focus the most senior person in the company’s time away from critical decision making on daily business. Lead to bad blood on your existing team.

Operations 292

Operations CTO Hire Startup Early Stage 292

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

NOVEMBER 19, 2009

The technology team disagrees on direction and wants resolutions. He was a really nice and personable guy who had deep domain knowledge in an industry that he’d worked in for 10 years that is in need of technological advancement. Your head of sales thinks she should fire somebody. He wanted to be the guy who did it.

Entrepreneur 414

Entrepreneur Fractional CTO Technical Review CTO Hire 414

Both Sides of the Table

MAY 28, 2018

Of course the VC is looking to have specificity in how you plan to spend the money you’re going to raise and plans that show a pie chart that says, “25% on marketing, 30% on technology and R&D, 20% on infrastructure, 25% on G&A” do not get funded. Yes, I see plans this pedestrian.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

AUGUST 3, 2010

I can save tons of development time and I think I can buy it for all equity. I’m not saying there are never reasons to buy another company for cash and/or equity. how to integrate technology, systems, people and culture. - A close friend of mine in LA who is 3 years into his startup called me about 2.5

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

JULY 16, 2010

But VC is an “illiquid asset&# so funds didn’t disappear quickly - In 2000/01 the stock market quickly adjusted punishing investors in the NASDAQ and in individual public technology stocks. It takes less to start a business these days – We all know that it takes less to start a technology company these days.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JULY 26, 2015

If you hire somebody with 3 kids and who doesn’t have a lot of savings you’re naturally going to have somebody who cares more about cash than equity even though you REALLY WANT everybody in your company to have the same motivations as you. At times I scratch my head at the behavior.

Oauth 150

Oauth Software Review Technical Review IPO 150

Both Sides of the Table

FEBRUARY 23, 2015

He or she has worked at some very successful big technology or media companies and went to a great school. This career advice is for people who are slightly older, have slightly more personal responsibilities at home and who can’t just “throw caution to the wind” due to financial obligations. He still has the dream.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

SEPTEMBER 23, 2010

Convertible or equity? That was an important part of our “social proof&# that we had built interesting technology. 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?

Entrepreneur 292

Entrepreneur Technical Review Stealth Valuation 292

Both Sides of the Table

OCTOBER 17, 2019

Invoca is now doing 10s of millions in recurring revenue and is growing > 75% year-over-year but it took the first 3 years to really build out the technology and acquire our initial enterprise clients. VC is a long-term business Some businesses are overnight successes but few of them really move immediately up and to the right.

IP 223

IP Intellectual Property IRR Cofounder 223

Both Sides of the Table

MARCH 6, 2010

If I’m interested I get to spend more time with them, if I’m not I don’t have to – A few companies per month come in that have fascinating business ideas that warrant my spending more time trying to understand their people, company, technology and market. The upside for entrepreneurs is the equity in their business.

Technical Review 312

Technical Review Due Diligence Spain Warrant 312

Both Sides of the Table

JUNE 22, 2011

Responses ranged from, “hey, they’re in a HUGE market&# to “it is an amazing company and their technology rocks.&# In the past I have publicly commented on some specific companies that seemed over valued. But everything has intrinsic value. And you may choose to overpay hoping that the future value will be worth your while.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

JULY 10, 2010

If you don’t know Montgomery & Co it is one of the premier technology & media focused investment banks in the country (and as Michael corrected me they also have a strong Healthcare / Med tech practice). The Montgomery Conference : one of the top technology events of the annual calendar in the United States and held every March.

IPO 242

IPO Venture Capital Private Placement Cofounder 242

Both Sides of the Table

SEPTEMBER 29, 2009

High burn-rates fueled by over investment – One of the most damning things that happened to the start-up markets in 97-00 and 05-08 was the overfunding of technology companies. This came in part due to the huge influx of money into VC but also because hedge funds and private equity shops with no VC experience wanted part of the action.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

JUNE 12, 2013

Todd Gitlin is one of the best executive recruiters the technology & startup market in Los Angeles. Who cares what my equity is. He would offer his time to Launchpad LA companies. Jason could ask me just about anything now. He’s been such a consistent giver over the years. My philosophy was simple. ” I did well.

Los Angeles 407

Los Angeles PR Networking Partner 407

Both Sides of the Table

MAY 23, 2010

a loan) that is later converted to equity at the time of the next financing. If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. They might decide to delay new product features or upgrading technology infrastructure.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

JULY 11, 2010

Uh, I guess he won’t be co-sponsoring a technology lab in LA with me then? These kinds of office space arrangement are often called “technology incubators&# or “startup labs&# or something similar. The latest technology lab that I came across was dogpatch labs run by Polaris Ventures.

San Francisco 285

San Francisco Incubator Silicon Valley Startup 285

Both Sides of the Table

JANUARY 21, 2010

When to get a lawyer - If you plan to be a venture or angel backed technology company (what I mostly write about) the best time to start meeting and getting to know lawyers is long before you ever start your company. You never got around to agreeing exact equity splits but you had many conversations about it.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

MARCH 31, 2012

It is with this backdrop that I was really happy to learn from my friend Ethan Anderson (HBS alum & founder of RedBeacon) about an awesome program at HBS run by Tom Eisenmann called Launching Technology Ventures. Here is a sample of the reading list for the course that gives you a flavor for just how modern and practical this course is.

Startup 319

Startup Early Stage Sales Cofounder 319

Both Sides of the Table

JANUARY 1, 2016

We want to invest in early-stage technology enabled startup businesses – upfront in the funding cycle. You don’t have unlimited equity to dole out. Strictly for example sake I’ll take our mission at Upfront Ventures. We established our brand to lay out our belief system codified in a word: Upfront.

Leadership 150

Leadership Southern California San Diego Hiring 150

Both Sides of the Table

DECEMBER 1, 2009

I advocate treating them like a co-founder in every way except when they join and how much equity they get. Once it’s set up I recommend bringing in a co-founder and giving them 10-30% of the company depending upon when you bring them in. You may be introverted and need the more externally facing person.

Hiring 289

Hiring Cofounder Dilution Startup 289

Both Sides of the Table

APRIL 25, 2011

They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

OCTOBER 14, 2009

It’s just that many companies waste equity on advisory boards, pick the wrong advisers or set up advisory boards with the wrong expectations. Tags: Start-up Advice startup technology vc venture capital. I wrote recently about the role of Advisory Boards in startups , which I expected to be a bit controversial. Is it just me?

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

Both Sides of the Table

FEBRUARY 11, 2012

agreeing whether or not to top up a founder’s equity. Why should I pay 2x the price to hire a VP of sales as I would pay to hire a VP of Market, Technology or Finance? We like to short-hand it, as in, “What’s our BATNA?” ” As a VC I’m required to negotiate constantly. submitting term sheets.

Mexico 305

Mexico Term Sheet Hiring Search 305

Both Sides of the Table

MAY 5, 2011

It really wouldn’t take much to turn a great technology ecosystem into a truly electric one. In Los Angeles we don’t have “patron technology companies&# that are big enough to matter – we’re still hoping to see them emerge. LA and Seattle are in the second (or third) major wave of technology innovation.

Seattle 317

Seattle Silicon Valley Technical Review Los Angeles 317

Both Sides of the Table

MAY 15, 2010

But when the finally convert the debt to equity the round gets filed with the SEC and thus journalists often pick up on it. Arnie Gullov-Singh (ex-EVP of product, technology and operations for MySpace) also joined as CEO, as Sean Rad will assume the role of President. They also avoid Reg D.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

Both Sides of the Table

SEPTEMBER 2, 2009

Tags: Pitching VCs Start-up Advice VC Industry startup technology vc venture capital.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Both Sides of the Table

MARCH 3, 2013

He talked about how for centuries education had “no technological core” (meaning it was bound by physical locations) and thus disruption was very difficult. Internationalization of Technology. We spoke about what succeeds early in technology market evolutions. If you have some time I highly recommend watching it.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

Both Sides of the Table

OCTOBER 22, 2009

He’s joining you because your company offers him/her the hope of the big equity package but likely the step forward in his career that he’s been looking for. I had given him a small equity stake in my company. Tags: Start-up Advice startup technology. You need the sales executive who aspires to be a VP Sales (e.g.

Hiring 327

Hiring Startup Equity Sales 327

Both Sides of the Table

NOVEMBER 23, 2012

So you can imagine I see my fair share of celebrities looking to get into the technology industry. And equal numbers of startups seeking celebrity endorsements in exchange for equity. Don’t give up your hard-earned equity to celebrities. I live in LA. And I’m a VC. So I guess it requires some explanation.

Startup 321

Startup Equity Warrant Dilution 321

Both Sides of the Table

FEBRUARY 24, 2019

When an entrepreneur takes on investors who take equity (i.e. The board is where large equity investors get their representation. Founders on the other hand recognize that over time they are likely not to have complete control of the board of directors of the company they founded.

Warrant 187

Warrant LP Cofounder Founder 187

Both Sides of the Table

JUNE 29, 2011

If you don’t want to read that post, the summary is: Open source computing drove computing costs down 90%, which spurred innovation in technology. As some of the last generation of startups have gotten bigger many VCs have also chased later-stage investments that were traditionally dominated by growth equity or mezzanine funds.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Both Sides of the Table

DECEMBER 3, 2013

And even in this growth equity round led by Insight Partners we asked for our full prorata investment and took as much as we were allowed to. Nick – the incredibly visionary behind the company and our technology. We co-led the next round with IA Ventures without even asking other VCs to participate so we did an A-1 round.

Iran 358

Iran API San Francisco Nigeria 358

Both Sides of the Table

FEBRUARY 23, 2010

I just want to state that up front because while I believe that this post will apply to most startup technology companies out there, I’m sure there will be exceptions. No advice I give will ever apply to 100% of companies, 100% of startups or even 100% of tech startups.

Channel 293

Channel Startup Sales Partner 293

Both Sides of the Table

AUGUST 9, 2011

I show charts on housing, structural unemployment, home equity re-financings that we spent meaning less spending power post crash, new housing sales, debt-to-income ratios, public-sector job problems that will cause crises in cities and states across the US. And the equity in their house isn’t rising. And you don’t see it.

Stock 305

Stock Technical Review Marketing Greece 305

Both Sides of the Table

FEBRUARY 14, 2016

There is much discussion online and also in small, private groups, about why the price of technology companies – public and private – are falling. In the case of startups the “buyer” is the VC looking to part cash for “purchasing” equity in your startup. Demand represents a buyer and supply a seller.

Valuation 150

Valuation Down Round Startup Later Stage 150

Both Sides of the Table

FEBRUARY 7, 2017

He said that he believes AI will have a bigger impact than any technology in the last 30 years. After years of watching Shark Tank it’s heartening to hear them make comments like, “I don’t know why he gave up so much equity? Because otherwise you’re going to be a dinosaur within 3 years.” Why didn’t he just do a licensing deal?”

Artificial Inteligence 105

Artificial Inteligence Silicon Valley San Francisco Technical Review 105