Gust

MARCH 22, 2014

There are some great answers here already (and there’s no way I’m going to try to top Terrence Yang ‘s magnum opus , so I will simply point you to a first-hand account of the challenges of VC fund-raising by Alan Patricof , the founder of Greycroft Partners. (Of

Venture Capital 146

Venture Capital Partner Design Founder 146

Gust

SEPTEMBER 3, 2014

It’s the official collaboration tool of the Angel Capital Association (and the equivalent national angel investor federations in 20 other countries.) It’s also used by over 300 venture capital funds. Needless to say, the author of this post is completely biased, as I am the Founder & CEO of Gust ).

Management 115

Management Vesting Angel Investor Venture Capital 115

Gust

DECEMBER 22, 2011

Here are a few key questions and observations that I offer to any newly incorporating startup: Who are the founders? If all goes well, the value of those assets will grow geometrically over time to eventually be worth millions or even billions. Has anyone already left the picture? Were outside advisors, contractors or consultants involved?

Intellectual Property 149

Intellectual Property Technical Review Software Review IP 149

Gust

APRIL 23, 2014

Note: The author of this answer is completely biased, as he is the founder and CEO of the aforementioned platform. While Gust is generally flying under the radar, and currently accounts for an infinitesimally tiny fraction of the marketplace, the actual numbers may be a bit surprising. original post can be found on Quora @ [link] *.

Angel Groups 127

Angel Groups Accredited Investor Private Equity Deal Flow 127

Gust

JANUARY 22, 2014

This is obviously a softball question that I’ve been Asked to Answer, as I’m the Founder/CEO of Gust. Disclaimer: the author is the Founder & CEO of Gust, and therefore this answer, while completely accurate, is not disinterested. original post can be found on Quora @ [link] *.

Angel Investor 150

Angel Investor Angel Groups Accredited Investor Early Stage 150

Gust

NOVEMBER 29, 2011

Bill Clark, founder of MicroVenture Marketplace, Inc. Experienced angel and venture capital investors spend lot of time independently evaluating the investment opportunities (a process called “due diligence”).

Securities and Exchange Commission 154

Securities and Exchange Commission Accredited Investor Angel Investor Due Diligence 154

Gust

DECEMBER 29, 2013

Some entrepreneurs can’t decide if they want to be a Limited Liability Corporation (LLC) or a C-corporation, or they don’t have the money, so they put off doing anything until the first venture capital round, or until the first lawsuit occurs. Too many founders think it’s more important to work on products and customers.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

SEPTEMBER 27, 2014

Create your Gust profile to show off your venture in the best possible light. I am continually surprised at founders who spend ten minutes throwing up a barebones profile and are dismayed that money doesn’t start flowing in. That means it should be complete, thoughtful, accurate and always kept up to date.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Gust

NOVEMBER 11, 2011

Usually these term sheets involve convertible notes, which are supposed to convert to equity at the next round of financing, like when the serious venture capitalists do a Series A. From what I’ve seen, it’s critical to make sure startup founders are thoroughly aware of the term sheet and what it means. Are they worth the risk?

Software Review 79

Software Review Term Sheet Due Diligence Angel Investor 79

Gust

OCTOBER 8, 2014

Equally silly were advisors & entrepreneurs insisting that founders use convertible notes but we funded a few of those, too. Invested Interests cap table venture capital' It seems such a silly thing to focus on.”. But since it was equally silly for me to fight, seed rounds they became. Reblogged via [link].

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

Gust

JANUARY 22, 2014

This is obviously a softball question that I’ve been Asked to Answer, as I’m the Founder/CEO of Gust. Disclaimer: the author is the Founder & CEO of Gust, and therefore this answer, while completely accurate, is not disinterested. original post can be found on Quora @ [link] *.

Angel Investor 89

Angel Investor Angel Groups Accredited Investor Early Stage 89

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. But most VCs don’t bother so many convertible note founders get screwed and never know it until they sell their companies. On the phone …. We raised a seed round.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

OCTOBER 2, 2014

You’d imagine that every founder was getting rich. Actually, positive outcomes for founders are quite rare. As a startup founder you rarely have much money in your bank accounts. Think about it – most entrepreneurs who manage to raise seed money or venture capital usually raise enough money for 12-18 months maximum.

Monaco 122

Monaco Cofounder Chicago Mexico 122

Gust

OCTOBER 8, 2014

A founder with a startup focused on selling groceries online should begin their pitch by describing the total money projected to be spent on groceries online over the coming years. Financeable businesses require investors to believe that: 1) you will win at what you’re doing; and 2) the market in which you’re operating is worth winning.

Venture Capital 163

Venture Capital Finance Early Stage .Net 163

Gust

NOVEMBER 11, 2011

The founders have exactly the religious zeal you want to see, and tons of relevant experience, in a niche industry that, nonetheless, generates tons of money: urban fashion. Much to the founders’ credit, however, they adopted a “ we’ll show them ” attitude. You can keep pounding your head against the wall.

eCommerce 107

eCommerce Valuation Stock Community 107

Gust

NOVEMBER 4, 2011

For more page-turning corporate drama, including the feud between Intermix co-founders and UCLA college buddies Brett Brewer and Brad Greenspan, Nasdaq delisting, proxy contest and lawsuits by Greenspan after he was fired as CEO, see Stealing MySpace by WSJ reporter Julia Angwin. MySpace became its own company, MySpace, Inc., of MySpace, Inc.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

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

DECEMBER 16, 2011

Hardly a founder now alive. And, a bit misty-eyed, this old war veteran can actually remember the glory days: Venture capitalists would commit tens of millions for a startup to buy expensive infrastructure; hire sales and marketing teams as products were still being built; and lease out big slugs of office space for the coming hiring spree.

IPO 87

IPO .Net Social Network Mobile 87

Gust

OCTOBER 25, 2011

I’m an angel investor now, but I also had a small piece of co-founder equity in a software company that went public, and whole ownership of a software company that grew and prospered but remained private. That’s what we’re here for. But angel investment isn’t for everybody. My own experience keeps me open minded on this point.

Cofounder 133

Cofounder Angel Investor Equity Software 133

Gust

OCTOBER 20, 2011

Is the founder coachable? – Need venture capital. Experience in sales or technology. — No business experience. Willing to step aside, if necessary, for an experienced CEO. — Unwilling. — No. How complete is the management team? -. Entrepreneur only. One competent player in place. +. Another angel round.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

DECEMBER 27, 2011

I’ve had startup founders tell me that it’s only about the color of the money, but I disagree – particularly if you are desperate. Here is the inverse, sometimes called reverse due diligence, describing what you should do to validate your investor before signing up for an equity partnership.

Due Diligence 119

Due Diligence Entrepreneur Offshore Angel Groups 119

Gust

OCTOBER 21, 2011

In descending order of preference from the founders’ point of view: 1. To understand why, consider what would happen without such a provision if the startup turned out to be an overnight sensation acquired by Google for $30 million six months later. What happens to the outstanding convertible notes?

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

OCTOBER 11, 2011

The three founders , who had been excellent to that point, looked at each other, and the floor, for just a few seconds, obviously at a loss, until the leader took the initiative. There were multiple objections. Nobody was buying those numbers.

Intellectual Property 70

Intellectual Property Differentiation .Net Sales 70

Gust

NOVEMBER 23, 2011

Startups and founders need to come to terms with the stark reality that the rules of the game may be changed mid-play. Talented entrepreneurs are nothing if not resilient in the face of change: Market forces, competitive threats, technological shifts, you name it.

IPO 110

IPO Prospectus SEC Intellectual Property 110

Gust

OCTOBER 12, 2011

It’s worth mentioning two key attributes of convertible note venture deals here: The debt is almost always unsecured , meaning there are no underlying assets to be seized as collateral in the event of default (unlike, say, a mortgage or car loan), and is not personally guaranteed by founders or shareholders.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

OCTOBER 5, 2011

In case it isn’t clear by now, angel investors aren’t in the business of making risky early stage investments in order to earn 6% interest on their money, or even 10%— the upside is all in conversion to equity—so the interest rate isn’t a major point of negotiation.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

OCTOBER 3, 2011

If a company is appropriate for angel financing , for example, it is highly unlikely that it would also be in a position to raise venture capital, and vice versa. Once in, this money stays in, and is part of what makes up your Founder’s Equity (along with your work and your intellectual property.). From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

Gust

DECEMBER 22, 2013

Being a startup founder is not a job, but a lifestyle, like getting married versus staying single. In fact, it’s more like being single, since founders usually have no one to lean on, no one to make decisions for them, no one to blame, and no vision to follow but their own. Each of these has a cost in time an effort.

Entrepreneur 184

Entrepreneur Angel Investor Bootstrapping Venture Capital 184

Gust

SEPTEMBER 13, 2011

Instead it came down to the simple question of “how can you get angel investors and venture capital funds to join and use the platform?” Therefore, in conceiving Gust, we recognized that the overwhelming priority had nothing to do with technology or features or buzzwords.

Angel Investor 79

Angel Investor Silicon Valley Venture Capital Finance 79

Gust

JULY 1, 2012

Generally, the same criteria applies to venture capital investors, although they invest other people’s money, at a later stage, in larger amounts. First-time founders will find that most angels turn into mirages. Entrepreneurs in an unfamiliar domain better find a partner who has been there before they apply for funding.

Angel Groups 143

Angel Groups Angel Investor Early Stage Startup 143

Gust

OCTOBER 26, 2011

Common examples include papering founders’ stock issuances, catching up on Board minutes, and ensuring that all members of the team have entered into IP agreements with the company assigning rights in their work to the startup.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79