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5 Things I Look when Investing in a Startup

Gust

It’s the result of several decades in high tech, three years as an investor in a local Oregon angel investment group , some consulting in due diligence for venture capital, and my experience as founder and co-founder of successful ventures. Respect for the exit. What I say here is my opinion and mine alone.

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Which books would you recommend to a VC analyst-associate?

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The Business of Venture Capital. Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies. Raising Venture Capital for the Serious Entrepreneur. A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms.

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5 Clues To Investor-Friendly Financial Estimates

Gust

Here are some basic rules of thumb that every Angel or venture capital equity investor uses, to help you anticipate their reactions. Thats why investors want to hear about your exit strategy. Venture capital requests that get satisfied are even lower. Build a path to 10x return.

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IPOs, M&As, Liquidity, & You. (the entrepreneur)

Gust

In the “good old days,” angels invested in seed-stage startups and teed up promising companies for subsequent venture capital financing. If the company was successful, this quickly led to an IPO – a very happy ending for the entrepreneur, the angels, and the venture capitalists. Raising venture capital may lead to a huge exit.

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Build Your Pitch on Fundamental Stories

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That’s essentially exit strategy, but let’s be honest, nobody cares that much about what you say today will be your exit strategy in three years; they want a story that reassures them you know that’s going to be important.

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Outside capital: do or die?

Gust

A gigantic percentage of startup literature concerns how to raise capital. Strategically, the advantage outside capital provides is obvious: you can go faster. 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?

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Good Sources for on Pros & Cons of Convertible Notes

Gust

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.