Gust

OCTOBER 17, 2012

In addition, angels were up against a selection problem: All the best entrepreneurs and opportunities would naturally gravitate to the best venture capital funds, leaving only the “scraps” for angel investors. This is absolutely competitive with venture capital returns. So which is it? Only they’re not.

Angel Investor 152

Angel Investor Venture Capital Seed Stage Silicon Valley 152

Gust

NOVEMBER 22, 2011

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.

Venture Capital 171

Venture Capital Investment Bankers Angel Investor Initial Public Offering 171

Gust

FEBRUARY 15, 2014

While anything is technically possible, the reality is that venture capital firms do not fund “ideas” There are many wonderful ideas, and even many people having the same idea in the market at any given time. So what VCs fund is execution.

Venture Capital 130

Venture Capital Startup Marketing 130

Gust

MARCH 11, 2014

Data from 2012 and 2013 will show lower success rates because most of these companies won’t be mature enough to be in the market for a B. Tomasz Tunguz is a Partner at Redpoint Ventures where he works with Axial, Looker, Electric Imp, Expensify, ThredUp, Quantifind and Erply. .

Seed Stage 169

Seed Stage Seed Capital Startup Green 169

Gust

AUGUST 10, 2014

Here are some basic rules of thumb that every Angel or venture capital equity investor uses, to help you anticipate their reactions. On the other hand, you must remember that only about one percent of Angel investor funding requests get satisfied, according to the Angel Capital Association.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Gust

DECEMBER 1, 2011

We have no measure of the changes in available capital resources from entrepreneurs and their friends and family, but we have no reason to believe they have changed radically over the past few years. Let’s take a closer look at trends in government grants, angel investment and venture capital financings.

SBIR 120

SBIR Startup New York City Angel Investor 120

Gust

SEPTEMBER 27, 2014

In order to be competitive, a company needs to have just about everything in place, from its product to its team to market traction, before it is ready to seek funding. As such, the competition from an entrepreneur’s standpoint is very, very tough. Given this imbalance, the fact is that most VCs are reactive rather than proactive.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Gust

OCTOBER 8, 2014

I have come to realize that since the great tech boom started in 2009 and given the massive increase in first-time angels, first-time seed funds, first-time accelerators … the market is just filled with well-intentioned, but inexperience advice. Invested Interests cap table venture capital' So back to reality.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

Gust

DECEMBER 22, 2011

What do you suppose the market value would be of the trademark “Facebook,” its lowercase “f” symbol, or the Facebook.com domain?). Trademarks , which we touched on last week, are brand and product names, graphic logos, slogans, taglines, and other indicators of origin of the goods or services in question.

Intellectual Property 149

Intellectual Property Technical Review Software Review IP 149

Gust

OCTOBER 31, 2011

If your business offers a service, like marketing or management consulting, you are the product. Another reality is that angel investors and venture capital groups almost never invest in a services-only company. If you or any of your partners really don’t have the credentials, the commitment or the interest, you won’t succeed.

Angel Investor 143

Angel Investor Venture Capital Partner Networking 143

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. The simple answer is to do something, and start simple. So be alert and be flexible.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

OCTOBER 8, 2014

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. The latter requires that you articulate an amazing opportunity, largely defined by the projected size of the market you are pursuing. My answer is almost always the same.

Venture Capital 163

Venture Capital Finance Early Stage .Net 163

Gust

NOVEMBER 15, 2011

Sales and marketing risk. Funding/capital raising risk. While this method certainly considers the level of management risk it also prompts the user to assess other risk types,” including: Management. Stage of the business. Legislation/Political risk. Manufacturing risk. Competition risk. Technology risk. Litigation risk. 1 positive.

Valuation 102

Valuation Pre-Money Valuation Ohio Early Stage 102

Gust

DECEMBER 5, 2011

Too many entrepreneurs develop a new product without regard for market demand , then build an entire strategy based on creating a need, rather than acting on an existing market need. The best startups find a way to drive the market with their technology, rather than push their new technology-driven ‘solution’ on the marketplace.

Technology 167

Technology Angel Investor Early Stage Viral 167

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. On the phone …. We raised a seed round. About $1 million. Me: At what price? Him: It wasn’t priced. We raised a convertible note.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

OCTOBER 2, 2014

According to the SEC we’re not allowed to market the fact that we’re fund raising, so I won’t. Think about it – most entrepreneurs who manage to raise seed money or venture capital usually raise enough money for 12-18 months maximum. I promise you that won’t be a bit market for us. And so it goes again. Go figure.

Monaco 122

Monaco Cofounder Chicago Mexico 122

Gust

OCTOBER 20, 2011

Diversification across industry sectors is not as easily achieved for angels as could be accomplished in public markets, but can be achieved by co-investing with trusted angel colleagues in a broader set of businesses. Marketing/Sales Channels/Partnerships 0-10%. Marketing/Sales/Partnerships. 10% max.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

OCTOBER 25, 2011

Assume you have the right factors to get angel investment: experienced team, good product-market fit, growth potential, defensibility, and a reasonable shot at a successful exit. Have you asked yourself whether that’s what you really want? Have you considered the tradeoffs?

Cofounder 133

Cofounder Angel Investor Equity Software 133

Gust

DECEMBER 16, 2011

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

DECEMBER 20, 2011

This means the brilliant idea you started with will change as you iterate and pivot your business model until you find product/market fit.” ” He concludes that with the obvious: so that’s why you need the team, not just the idea, not just the market, not just the plan. You need a combination of skills. What skills?

Angel Investor 93

Angel Investor Oregon Business Model Search 93

Gust

DECEMBER 19, 2011

As everyone should know by now, this is the worst possible answer, since it implies that there is no market for your product, or you haven’t bothered to look for competition. Remember that cars compete with trains, so alternative solutions, or doing nothing, are real competition. . “We We have the first mover advantage.”

Viral 98

Viral Advertising Lead Investor Revenue 98

Gust

DECEMBER 6, 2011

Optimism ought to be a combination of potential market, product-market fit, scalability, defensibility, and management experience. Tell the story of the market, the need, the solution, the steps along the way, and the team that’s driving it. What I don’t like is the complete lack of experience that’s causing it. Absolutely.

Angel Investor 70

Angel Investor Early Stage Business Plan Sales 70

Gust

NOVEMBER 23, 2011

Talented entrepreneurs are nothing if not resilient in the face of change: Market forces, competitive threats, technological shifts, you name it. Google, which incorporated in 1998, has a market cap of $200 billion and employs more than 30,000 people. Facebook, which did not exist in 2003, is now valued at nearly $100 billion.

IPO 110

IPO Prospectus SEC Intellectual Property 110

Gust

JANUARY 4, 2012

Entrepreneurs: if you’re looking seriously at angel investment, and you have the kind of product-market fit and management experience investors will like, you need to take a good look at convertible notes. Do yourself and the investors you want to talk to a favor: take a few minutes and do some homework on this issue.

Angel Investor 114

Angel Investor Valuation Angel Groups Equity 114

Gust

OCTOBER 31, 2011

Lots, on the other hand, have passed up attractive exits only to see the market turn against them, the model run out of steam, or a competitor pass them by. And by “overall”, I mean “overall”: the rate of change for economic, geopolitical, technology, regulatory, and market conditions makes predictions radically more difficult than every.

IPO 70

IPO Valuation Stock Partner 70

Gust

DECEMBER 23, 2011

There’s no better test of how well your idea works, nor any better way of iterating it to real market demand, than to watch how the checks come in. Ventures with easy access to cash have the often-fatal luxury of setting the wrong priorities.

Intellectual Property 127

Intellectual Property Balance Sheet Dilution Bootstrapping 127

Gust

OCTOBER 18, 2011

Investors want scalability , defensibility, an interesting market, an experienced team, and some way to generate liquidity in 3-5 years. The related information is almost always easy to find (part of this site’s mission, by the way). If a local group wants local deals, don’t bother to submit from across the country. Bad fundamentals.

Intellectual Property 124

Intellectual Property Valuation Partner Revenue 124

Gust

NOVEMBER 11, 2011

They hem and haw as the weeks melt away your first-to-market advantage. All entrepreneurs know the feeling: your vision is crystal clear, but potential investors don’t get it. They ask small-minded questions. They niggle over details. It’s maddening! So, there are two things you can do after getting incredibly frustrated.

eCommerce 107

eCommerce Valuation Stock Community 107

Gust

OCTOBER 11, 2011

Honestly, I was really liking the people, the market, the secret sauce, and just about all of that pitch until they got to the financials. As they summarized their numbers, they were projecting enormous growth in sales with relatively tiny marketing expenses and huge profits, like 50 percent of sales before taxes. You need a team.

Intellectual Property 70

Intellectual Property Differentiation .Net Sales 70

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

NOVEMBER 1, 2011

Growth means a strong market and a deliverable that’s scalable and defensible. I suggest you start by asking yourself these three questions. If you can’t honestly answer “yes” to all three, revise your plan, beef up your team, refocus, or pivot. Can it really grow? By scalable I mean that you can gear up to sell 10 or 100 or 1,000 per hour.

Angel Investor 93

Angel Investor Intellectual Property Finance Web 93

Gust

OCTOBER 21, 2011

Rule #2 is: demonstrate not just your wonderful idea, but that you understand the concept of product-market fit. But you must be able to articulate, from the start, a very clear and compelling benchmark for success once a million has gone out the door… and, ideally, intermediate goals for each few hundred thousand spent along the way.

Early Stage 79

Early Stage Metrics Audience Revenue 79

Gust

NOVEMBER 4, 2011

Intermix had acquired their previous online marketing startup, ResponseBase, and they remained a cohesive group. The early history of MySpace is inextricably intertwined with that of Intermix, a small-cap publicly traded Internet company in Los Angeles where I worked as corporate counsel from 2004-06.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

DECEMBER 22, 2013

Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant. Professionals will tell you that the sequence is friends and family first, angel investors second, and only then venture capital.

Entrepreneur 184

Entrepreneur Angel Investor Bootstrapping Venture Capital 184

Gust

JANUARY 5, 2012

Since the IPO market has been in the doldrums for most of the past decade, high-profile private companies have chosen (or been forced) to stay private while raising huge sums of money from VCs and other private equity sources. But, the SEC limit on the number of shareholders is not the only issue entrepreneurs should consider.

SEC 131

SEC Angel Groups Technical Review Private Equity 131

Gust

AUGUST 6, 2014

a single venture capital fund putting in the full amount as Series A Convertible Preferred investment. The simple fact of the market is that there are many, many more entrepreneurs seeking capital than there are investors seeking to fund them. 25 individual angel investors funding a startup on a convertible note.

Term Sheet 170

Term Sheet Lead Investor Preferred Stock Common Stock 170

Gust

SEPTEMBER 13, 2011

When we originally conceived of a single platform tying together the world’s entrepreneurs, angel investors, venture capitalists and supporting organizations , it quickly became apparent that the biggest challenge had nothing to do with technology.

Angel Investor 79

Angel Investor Silicon Valley Venture Capital Finance 79