Gust

AUGUST 5, 2012

Exit strategy. For a family business, don’t project an exit. Otherwise, identify your preferred exit strategy, including specific candidates for merger or sale, and timeframe. Attractive deals show double-digit positive growth per year, and revenues that are projected to $20M or more within five years.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Gust

AUGUST 10, 2014

Thats why investors want to hear about your exit strategy. Build a path to 10x return. The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. If you dont have one, or intend to buy out investors with their own money, you probably wont get much interest.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Gust

DECEMBER 16, 2012

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. As a founder, you may think that everyone understands your vision and plan from your passion and words, but it doesn’t work that way. Finalize your financial model.

Angel Investor 179

Angel Investor Intellectual Property Elevator Pitch Angel Groups 179

Gust

SEPTEMBER 30, 2012

The only down-side I have heard is that many business incubators used to be notoriously high-pressure environments where a lucrative exit strategy was more important than the half-baked products. If that’s the toughest problem you face as a startup, then you probably didn’t need an incubator in the first place.

Incubator 147

Incubator Entrepreneur New York City Silicon Valley 147

Gust

DECEMBER 28, 2011

The two major differences in the exit environment in the past decade are (1) the disappearance of the IPO market and (2) the rapidly increasing size of the average VC fund. In the “good old days,” angels invested in seed-stage startups and teed up promising companies for subsequent venture capital financing. My, my…how the world has changed.

IPO 153

IPO Venture Capital Entrepreneur Angel Investor 153

Gust

DECEMBER 23, 2011

A gigantic percentage of startup literature concerns how to raise capital. But before you start on that PowerPoint, let’s ask this: do you really have to? Or is it still possible to bootstrap and build a company organically? Strategically, the advantage outside capital provides is obvious: you can go faster.

Intellectual Property 127

Intellectual Property Balance Sheet Dilution Bootstrapping 127

Gust

DECEMBER 27, 2011

Due diligence should always be a two-way street. A while back, I published an article on “ Startup Due Diligence Is Not a Mysterious Black Art ,” describing what investors do to validate your startup before they invest.

Due Diligence 119

Due Diligence Entrepreneur Offshore Angel Groups 119

Gust

JANUARY 4, 2012

Entrepreneurs: if you’re looking seriously at angel investment, and you have the kind of product-market fit and management experience investors will like, you need to take a good look at convertible notes. Do yourself and the investors you want to talk to a favor: take a few minutes and do some homework on this issue.

Angel Investor 114

Angel Investor Valuation Angel Groups Equity 114

Gust

NOVEMBER 23, 2011

Talented entrepreneurs are nothing if not resilient in the face of change: Market forces, competitive threats, technological shifts, you name it. In recent years, government regulation has emerged as another such force to be reckoned with in the technology industry.

IPO 110

IPO Prospectus SEC Intellectual Property 110

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

NOVEMBER 1, 2011

Are you wondering about angel investment ? How to find investors? What steps you need to take? I suggest you start by asking yourself these three questions. If you can’t honestly answer “yes” to all three, revise your plan, beef up your team, refocus, or pivot. Can it really grow?

Angel Investor 93

Angel Investor Intellectual Property Finance Web 93

Gust

DECEMBER 16, 2011

Listen my children and you shall hear. Of IPO dreams once held so dear. Our forefathers’ jackpot, guaranteed to arrive. Hardly a founder now alive. Can remember that famous yesteryear. So begins, of course, one of the most famous poems of the entire startup canon.

IPO 87

IPO .Net Social Network Mobile 87

Gust

OCTOBER 31, 2011

Oddly, perhaps, one of the most difficult decisions entrepreneurs face arises once the company begins to succeed. That’s usually when the first really “strategic” potential investors start to show up, presenting the question: sell a big chuck (or all) of the company at today’s valuation, or double down and go for the life-changing money?

IPO 70

IPO Valuation Stock Partner 70

Gust

JANUARY 5, 2012

Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders. The assumption has been that companies with 500 investors are quasi-public anyway, and for disclosure and other reasons should be forced to go public when the shareholder number approaches this limit.

SEC 131

SEC Angel Groups Technical Review Private Equity 131