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. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Berkonomics

JUNE 15, 2017

From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering. So be aware that professional investors are in your company for the eventual large profits at the liquidity event.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Women Entrepreneurs Can

NOVEMBER 19, 2022

They can also help you develop your product and sales channels. Investors receive a healthy return on investment when the company reaches a liquidity event. This allows you to skip the complicated valuation calculations. Seed funding is usually used to support product development, sales, and marketing.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

Berkonomics

FEBRUARY 23, 2017

If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? Or do you plan to pass control to the next generation if appropriate?

Liquidity Event 102

Liquidity Event Valuation Email Management 102

Berkonomics

SEPTEMBER 27, 2018

Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Three months later, another investor company in the business offered to invest $3 million at a valuation of $60 million. million at a valuation of $80 million. Two months after that, a French game company offered $1.5

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

Berkonomics

JUNE 12, 2014

So co-management is the second group to share in the bounty upon a liquidity event. Those who receive options but leave the company before a liquidity event may either purchase those shares represented by the options upon exit from the company, or lose the right to those shares, often 60 days after their exit.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Startup Professionals Musings

AUGUST 7, 2015

Customers may be attracted to your marketing message, but investors look harder at the startup team, seeking superior expertise in the key areas of growing a business, product domain, financial, marketing and sales. Specific elements of your marketing and sales plans. Projected revenues and expenses over the strategic period.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

FEBRUARY 13, 2016

What are your specific marketing and sales plans? You need to identify pricing details, sales channels, strategic partners and a customized marketing plan consistent with your industry and target segment. Justify funding requirements, use of funds and specify a current valuation estimate.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Startup Professionals Musings

AUGUST 13, 2012

Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Convince investors that you have lined up sales channels, strategic partners, and a viable marketing strategy. Include a current valuation estimate. See where your cashflow bottoms out.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Berkonomics

FEBRUARY 23, 2023

He concluded that the sweet spot for valuation was in the $20–30 million sales price range, and that many, many times more deals were completed in that range than above $100 million in valuation at exit. Not so long ago, Basil Peters wrote his book, “Early Exits,” after analyzing 150 young companies and their exits.

Dilution 62

Dilution Valuation Early Stage Equity 62

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). Better yet, the valuation of your enterprise is often higher than if the same investment were taken from a professional investor.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

MAY 13, 2011

Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Convince investors that you have lined up sales channels, strategic partners, and a viable marketing strategy. Include a current valuation estimate. See where your cashflow bottoms out.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Steve Blank

JULY 15, 2010

Number of Venture Backed Liquidity Events 1991-2000. Number of Venture Backed Liquidity Events 2000-2010. If you’re starting a software company, your exit is most likely a sale to a larger company. During the decade between 1991 and 2000, nearly 2000 venture backed companies went public. Source: NVCA.).

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Most would agree this is not a fair outcome. a mix of cash and stock) received by other equity holders in the transaction.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Berkonomics

AUGUST 20, 2015

Dave’s note: Guest author, David Steakley returns to explain his theory of exit valuations. The inciting incident in a movie is the event at the beginning of the story that causes the hero’s life to be completely transformed and irrevocably changed, and makes the whole story unfold.

Liquidity Event 48

Liquidity Event Private Equity Valuation Equity 48

Berkonomics

SEPTEMBER 17, 2011

Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Three months later, another investor company in the business offered to invest $3 million at a valuation of $60 million. million at a valuation of $80 million. Two months after that, a French game company offered $1.5

Liquidity Event 59

Liquidity Event Pre-Money Valuation Sales Valuation 59

Gust

AUGUST 5, 2012

Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Convince investors that you have lined up sales channels, strategic partners, and a viable marketing strategy. Include a current valuation estimate. See where your cashflow bottoms out.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Startup Company Lawyer

MARCH 14, 2010

The only practical situation that I can think of where a dividend preference is beneficial to a stockholder is where a company does a partial sale of assets and wishes to distribute the proceeds to stockholders. Co-sale rights. Changes in preferred and merger/sale of assets only. Right of first refusal and co-sale agreement.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

The Next Web

MARCH 2, 2014

If you choose to issue stock, valuation and the amount you’re raising determines how much equity the investors will receive, and you will give up, for their investment. This will have a significant impact on the amount business owners could realize on the sale or other liquidity event for the company.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Berkonomics

DECEMBER 17, 2020

Your principal focus may be on the valuation of the company before the investment is made, which determines the amount of the company you will retain after the investment. There is a rather new term for those large, individual investors who are usually former entrepreneurs made rich through sale of their previous ventures.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Startup Professionals Musings

APRIL 22, 2010

Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Convince investors that you have lined up sales channels, strategic partners, and a viable marketing strategy. Include a current valuation estimate. See where your cashflow bottoms out.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Gust

SEPTEMBER 5, 2012

Angel investors don’t expect to get repaid, nor do they really want to get repaid; the return on their investment, if the startup proves a success, will come in conversion to equity followed by an eventual liquidity event (sale or IPO of the company), with a return of at least 5x or 10x the initial investment if all goes well.

Finance 134

Finance Convertible Security Equity Seed Stage 134

Berkonomics

JANUARY 27, 2010

From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering. So be aware that professional investors are in your company for the eventual large profits at the liquidity event.

Liquidity Event 67

Liquidity Event Initial Public Offering Dividend Valuation 67

ithacaVC

DECEMBER 14, 2011

Yes, it is possible to issue preferred stock without liquidation preference, but that is rarely done. Rather, preferred stock has the right upon a liquidation event to get its money back (a 1X LP) or, sometimes, a multiple of its money back (for example a 2X LP). Yet, it is able to attract more investment capital. It might be.

Liquidation Preference 49

Liquidation Preference LP Preferred Stock Liquidity Event 49

Growthink Blog

MAY 26, 2011

Last week, TruckCenter.com was purchased by Liquidity Services (NASDAQ: LQDT), a company that runs online auctions for surplus goods. I found this pretty amusing since when a company is purchased, we often say it reached a "liquidity event." Earn-outs are often used to bridge a valuation gap. your business) into cash.

Acquisition 81

Acquisition Liquidity Event Valuation Revenue 81

The Next Web

OCTOBER 7, 2013

As an aside for founders, there is an interesting approach on how to arrive at equity offers outlined by Fred Wilson that may be worth checking out once there is a sense of valuation. What you need to consider: - x : percent ownership upon a liquidity event. All of the estimates displayed above are figures prior to any dilution.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Berkonomics

FEBRUARY 9, 2017

He concluded that the sweet spot for valuation was in the $20–30 million sales price range, and that many, many times more deals were completed in that range than above $100 million in valuation at exit. Not so long ago, Basil Peters wrote his book, “Early Exits,” after analyzing 150 young companies and their exits.

Dilution 48

Dilution Valuation Early Stage Naming 48

The Next Web

SEPTEMBER 29, 2013

You’re basically tinkering with everything at this stage – product, marketing, sales, partnerships, etc. You’re tinkering with your marketing and sales channels. Investors are always thinking about growth mode because that’s the path to where they want to go – liquidity event. How do you do that?

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Startup Professionals Musings

MARCH 13, 2020

If you insist on projecting $100 million in sales the first year, smart investors will likely run for the nearest exit. Define an exit strategy for investors to liquidate their share. Assume margins and prices that are realistic in your target market. Back up your projections with a simple financial model.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Berkonomics

AUGUST 27, 2015

Creating brand is or should be a major focus for companies in industries where positive and immediate customer prospect recognition results in sales. Their “make or buy” decision is heavily impacted by the time required to make and the value of the Flipper’s brand.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Berkonomics

OCTOBER 7, 2011

For investors, a subsequent down round at a lower valuation than the last, or an exit opportunity at a loss are all opportunities for the affected stakeholder to show a side that can sometimes shock an entrepreneur or CEO. Email readers.continue here] Sometimes a secondary fund-raising effort leads to a lower valuation than the last.

Valuation 54

Valuation Dilution Down Round Employee 54

Startup Professionals Musings

AUGUST 29, 2018

It is this growth that concerns many investors: Startup valuations can’t be negotiated via crowdfunding. Neither the entrepreneur nor contributors from the crowd generally realize that high or poor valuations will likely hurt them later, when follow-on rounds are needed, and professional investors walk away.

Equity 180

Equity Due Diligence Angel Groups Liquidity Event 180

Hunter Walker

SEPTEMBER 29, 2022

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). Conversely, if you’re not a good picker, it’s difficult to overcome that, even if you had perfect timing on secondary sales.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Berkonomics

APRIL 3, 2014

Your principal focus may be on the valuation of the company before the investment is made, which determines the amount of the company you will retain after the investment. Second, there is a rather new term for those large, individual investors who are usually former entrepreneurs made rich through sale of their previous ventures.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Seeing Both Sides

SEPTEMBER 15, 2015

Only a handful of so-called unicorns — companies that have achieved a valuation of over $1 billion in the last 10 years — come from Israel, and only one Israeli firm, Teva, ranks in the world’s 500 largest companies by market capitalization. The second reason to move early is to hire the absolute best sales and marketing talent.

Cofounder 20

Cofounder Technical Review United States 20