Gust

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The right investors for the right stage

Gust

Angel investors typically provide early-stage funding, while venture capital firms typically come in at later stages. This is the realm of venture capital professional investors, with funding amounts of $1-10 million, often referred to as the “A-round,” or first institutional funding. Funding or rollout stage. Exit stage.

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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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Entrepreneurs: Due Diligence on Investors is Smart

Gust

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.

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A long time ago in an economy far, far away.

Gust

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. Hardly a founder now alive.

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Limiting the Number of Shareholders in Private Companies

Gust

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. Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders.

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