Gust

DECEMBER 20, 2012

There is no specific ratio between “sweat equity” and cash in a venture, and that’s actually not a good way to think about the issue. A better way to think about this is to separate two aspects of the “sweat” that one puts into a new venture.

Sweat Equity 136

Sweat Equity Equity Valuation Salary 136

Gust

DECEMBER 15, 2013

In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Too many founders are convinced they “need” equity financing, for the wrong reasons, as outlined in the book and supplemented with a bit of my own experience: Need employees and professional services.

Bootstrapping 183

Bootstrapping Sweat Equity Entrepreneur Technical Review 183

Gust

DECEMBER 8, 2013

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. These are the questions that get past the hype of a founder “vision to change the world,” and into the realm of real business strengths, weaknesses, and current health. Now you know.

Due Diligence 174

Due Diligence Sweat Equity Intellectual Property Burn Rate 174

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Being fluent in these concepts helps in many settings, such as negotiating terms with potential investors, co-founders and key employees.

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Gust

MAY 24, 2012

Some commentators have suggested this is the wave of the future, signifying a shift in the balance of power from investors to founders of the relatively small, elite group of growth companies that make it to public markets. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Gust

AUGUST 7, 2012

Problems with the founders. For example, I saw a founder tell investors, during a pitch session, that some investors screwed him and his previous partners were dishonest. Sweat equity can be a problem. And of course founders making more than market-justified salaries is a problem too. The next [whatever].

Business Plan 172

Business Plan Sweat Equity Salary Founder 172