Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For

Finance 134

Finance Convertible Security Equity Seed Stage 134

Gust

FEBRUARY 22, 2014

There are literally hundreds of platforms currently operating that connect investors and startups, and there have been at least a hundred others that have come and gone. As I’ve discussed elsewhere, Gust’s long-term goal is to serve as the infrastructure platform for the entire global, early stage finance industry.

Belarus 107

Belarus Kazakhstan Portugal Accredited Investor 107

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. Same, except at the option of the noteholders (per the term sheet example above).

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

OCTOBER 21, 2011

To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. Suppose the notes converted as if the acquisition were an eligible financing round.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

MARCH 11, 2014

According to analysis by my partner Jamie Davidson on typical periods between financings peaks around 9 months so the follow on rates for Series Bs should be accurate up until the 2011 class, which gives these startups more than 2 years to raise their B. The secular decline in all of these ratios screams of increased competition.

Seed Stage 169

Seed Stage Seed Capital Startup Green 169

Gust

MARCH 8, 2014

While it sounds tautological, the most important thing a law firm brings to the startup table is… a knowledge of the law surrounding everything having to do with founding, financing and operating a startup! Invested Interests attorneys business entrepreneur law firm startups'

Warrant 156

Warrant Startup Valuation Finance 156

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. As with so many subjects in law and finance, mastering the jargon is half the battle. This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

DECEMBER 7, 2014

In my experience, that’s actually the worst way to start, for reasons I will outline here, and also the least common way, according to an authoritative survey of new startups. Show you are committed to your startup, not just involved. A startup idea executed hastily and poorly will be killed more completely than any timing delay.

Bootstrapping 191

Bootstrapping Entrepreneur Startup Burn Rate 191

Gust

AUGUST 9, 2014

CluelessCo is an internet startup company seeking $2 million of equity financing to fund our company for at least one year. Power Pitches bad David Rose pitch startup worst' Take your choice (these are both real, honest-to-God pitches, and I’ve got the originals in my possession): Contestant A.

Startup 131

Startup Database Open Source Equity 131

Gust

JULY 19, 2023

Being the founder of a startup can be both exciting and scary, particularly when raising capital from investors and managing your company’s finances. And we’ll cover 10 reasons why you should start building a financial model for your startup right away. We’ll explain what a financial model is and how you can use it.

Finance 70

Finance Conversion Founder Startup 70

Gust

SEPTEMBER 13, 2014

The world’s fastest growing tech startup ecosystem. A much more tightly knit startup community, compared to the larger but more diffuse West Coast community. Access to many, many more world market centers (advertising, finance, fashion, media, food, etc.). Many more world-class universities.

New York City 150

New York City Silicon Valley New York Angel Groups 150

Gust

NOVEMBER 18, 2012

Here are the components and “rules of thumb” that I recommend to every startup: Place a fair market value on all physical assets (asset approach). Back in the “heyday of the dot.com startups,” it was not uncommon to see a valuation incremented by $1M or every paid full-time professional programmer, engineer, or designer.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

NOVEMBER 13, 2013

It is also incredibly difficult to be successful, and will likely be very challenging to finance. You should also engage an attorney familiar with early stage financing to advise you on the legality of your plans. Invested Interests crowdfunding equity-based kickstarter project-based startup'

Securities and Exchange Commission 137

Securities and Exchange Commission Equity Early Stage Startup 137

Gust

DECEMBER 1, 2011

For years there has been a pervasive opinion across the entrepreneurial landscape that the US has a shortage of capital required to startup and grow new ventures. Dr. Carl Schramm, Kauffman CEO , recently said that startup formation is stagnant or even decreasing in the US in the second half of 2011.

SBIR 120

SBIR Startup New York City Angel Investor 120

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Gust

JANUARY 15, 2013

Is the bloom off of the startups rose? I had a conversation over the weekend, before either of us had seen the NYTimes story, about startups going down, even giving back investors’ money. Two days ago the New York Times published this story about investors getting pickier. This is what I hear from my own sources.

Due Diligence 119

Due Diligence Startup Angel Investor Early Stage 119

Gust

DECEMBER 29, 2013

I’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

JANUARY 22, 2014

Gust is the infrastructure that underlies much of the professional world of early stage finance. Gust News Invested Interests angel investors David Rose Gust investments startup' As a very active angel investor myself, I frankly can’t imagine how I could keep track of all the pieces without Gust.

Angel Investor 150

Angel Investor Angel Groups Accredited Investor Early Stage 150

Gust

NOVEMBER 11, 2011

Startups and investors discover each other, and the community wins because the event becomes visible evidence of new business and new jobs locally. Or the in-kind winning includes legal work or management consulting, but the startup that wins has its own providers. Investors and startup winner end up never agreeing on terms.

Software Review 79

Software Review Term Sheet Due Diligence Angel Investor 79

Gust

AUGUST 22, 2012

Giza was just a one-day side trip on my main mission: Visiting a tech startup tucked away in Alexandria, a bustling seaside metropolis of 5 million. Building a startup is one of the riskiest endeavors to begin with, so predictability is key, even in the face of known adversity. What the heck was I doing in Egypt anyway?

Technical Review 172

Technical Review Egypt Morocco Russia 172

Gust

MARCH 29, 2014

Invested Interests convertible note equity investors series a series seed startup' If they are similar in range, go right for an equity round, instead of incurring the cost and hassle of double-papering a note and a preferred round. original post can be found on Quora @ [link] *.

Equity 154

Equity Finance Cost Startup 154

Gust

JANUARY 22, 2014

Gust is the infrastructure that underlies much of the professional world of early stage finance. Gust News Invested Interests angel investors David Rose Gust investments startup' As a very active angel investor myself, I frankly can’t imagine how I could keep track of all the pieces without Gust.

Angel Investor 89

Angel Investor Angel Groups Accredited Investor Early Stage 89

Gust

OCTOBER 8, 2014

Cautionary note: No competent VC is actually fooled when you show up after raising $6M in seed financing and say you’re now raising an A! 5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007. It’s hard building a startup. and there''s always a but].

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

Gust

JULY 18, 2012

Yet I’ve rarely seen entrepreneurs more fired up than when recounting war stories of startups whose founders had control of the company wrested from them, were forced to take financing or compensation deals on outrageously onerous terms , or worst of all, fired from their own companies.

Stock Options 188

Stock Options SEC Stock Government 188

Gust

MARCH 12, 2014

But as a general rule of thumb, the investors in each round of financing will get somewhere between 15% and 35% of the equity in the company, and the total amount raised in each round should be enough to get the company to a significant increase in value. Invested Interests angel investors investors seed funding startups'

Angel Investor 133

Angel Investor Equity Finance Startup 133

Gust

NOVEMBER 2, 2014

Many entrepreneurs seems to be convinced that the “crowd” of regular people using the Internet will somehow solve their startup funding needs, when they sense a lack of interest from accredited investors. In my opinion, that’s why micro-finance has rarely worked, even for loans. Investors are not prepared for the high risk of startups.

Non-disclosure Agreement 160

Non-disclosure Agreement Intellectual Property Accredited Investor Equity 160

Gust

APRIL 23, 2014

When you realize that the platform operates in half a dozen languages and has investors or entrepreneurs in over 200 countries engaging in both local and cross-border investments, you can begin to see the outlines of the future of finance. Gust News angel groups businesses financial industry Gust innovations startups'

Angel Groups 127

Angel Groups Accredited Investor Private Equity Deal Flow 127

Gust

MARCH 19, 2014

Your best bet in this situation is probably to find an ‘established’ US startup that would be willing to employ you and go through the rather complicated H1B visa sponsorship process, and then (with their permission) work on your own time to create your startup. But I wish you luck with your venture!

Venture Capital 122

Venture Capital Business Plan Green Entrepreneur 122

Gust

JUNE 7, 2014

If a company hasn’t taken in any outside financing at all, things are very simple, because the liquidation waterfall jumps directly from (1) down to (9). Invested Interests company early stage funding investors startup starup' So, here is the typical payout order, from first to last: 1) Salaries owed to employees.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Gust

JANUARY 13, 2013

More important are standard business, finance, and economics courses. Too many startups fail simply by missing the practical elements of money management, time management, and setting priorities. An MBA is helpful, but not required. Supplement course work with practical experience. Supplement course work with practical experience.

Entrepreneur 180

Entrepreneur Seed Money Social Network Business Plan 180

Gust

DECEMBER 13, 2011

Here are the trends in venture capital financings from 2006 through 2010 – the number of seed stage deals funded and total investment by region in millions of dollars. . In fact, my sense is that in most regions, angels and VCs are cooperating and sometimes co-funding startups. All Seed-VC. Silicon Valley. New England. NYC Metro.

Seed Stage 162

Seed Stage Southern California San Diego Silicon Valley 162

Gust

DECEMBER 28, 2011

In the “good old days,” angels invested in seed-stage startups and teed up promising companies for subsequent venture capital financing. As you may know, startups can go public on active foreign exchanges – such as Toronto’s TSXV and the London AIM market – but there’s a catch. My, my…how the world has changed.

IPO 153

IPO Venture Capital Entrepreneur Angel Investor 153

Gust

OCTOBER 25, 2012

” Because convertible notes are designed to give investors an equity interest in a company that will eventually be worth much more than their investment, the intention on their part is always to convert into equity (after all, if they were just after the interest on a loan, they could find much less risky things to invest in than a startup.).

Bankruptcy 121

Bankruptcy Valuation Equity Finance 121

Gust

NOVEMBER 10, 2013

The fifth stage includes preparing for, financing, and implementing full-scale manufacturing and marketing activities. Invested Interests entrepreneur research and development startup' Results, if positive, are used for marketing a product directly to customers. Commercialization. The technology can be reliably replicated and produced.

Developer 148

Developer Warrant Angel Investor Early Stage 148

Gust

JUNE 13, 2012

And if you’re a startup CFO, finance lead, bean counter, or presentation slide deck preparer, then you should read this book. If you’re doing investment pitches, you should read this book. If you’re doing a pitch I’m going to see, I want you to have read this book. Painting with Numbers , by Randall Bolten.

Finance 121

Finance Revenue Sales Startup 121

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. The cap is irrelevant if the next equity financing is at a valuation below the cap amount.) was spun out, and the valuation was set by that financing round.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

JULY 12, 2012

If you are going to be a true co-founder (and 20% equity sounds like it), sharing over-all decision making about company direction, strategy, financing, staffing, etc. Similarly, if you are putting cold, hard cash into this pre-funded startup, along with your time and skill, then that may well warrant a board seat to protect your money.

Cofounder 107

Cofounder Founder Warrant Equity 107