Gust

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Second-Class Investor Citizens: Facebook’s IPO and Dual-Class Equity Structures

Gust

Dual-class voting structures are receiving a lot of attention these days along with intense publicity related to the Facebook IPO , following in the wake of other recent tech IPOs with a similar structure such as Zynga and LinkedIn.

IPO 159
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How Reed Hastings’ Facebook Status Update Landed Netflix in SEC’s Crosshairs

Gust

Before the commercial Internet, the primary tools of disclosure included: Prospectus and related registration statement (“S-1″) for an IPO. Public companies have dealt with financial disclosure in ways that evolved over time with markets and technologies. Proxy statement in connection with the annual meeting of stockholders.

SEC 158
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5 Clues To Investor-Friendly Financial Estimates

Gust

Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year. In other words, revenue projections are not the place to be too conservative or wildly optimistic. Gross margins greater than 50%. Show red ink to match your funding request.

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Of Birchbox and Bricks

Gust

They are mentioned in any print, website, or television content concerning beauty, startups, New York, great entrepreneurs, women leaders , or the next generation of IPOs. OK, read the next two words slowly: generate revenue. Sorry, yes, I know how retro this sounds. Worrying about revenues (or wolves) can slow you down.

IPO 70
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These 10 Key Elements Make a Business Plan Fundable

Gust

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

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Adding Slides Does Not Enhance Your Investor Pitch

Gust

In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Project both revenues and expense totals for next five years, and past three years. What is the planned exit strategy (IPO, merger, sale, including likely candidates)? Business model. Competition and sustainable advantage.

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The right investors for the right stage

Gust

At this stage, your startup better be selling a commercial offering, have price and cost validated, with significant customer sales and a real revenue stream. This normally means more then 30 employees, and more then $1 million in revenue. Lesser amounts remain in the angel realm. Growth stage. Exit stage.