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The Legal Side of Entrepreneurship

YoungUpstarts

Startups need to understand how to manage the seed money they receive from investors and VCs. “And if you have a valuation cap; a higher cap is always better than a lower cap.” Startups bear the costs of their financing, from the first seed investment to the sale of Series A stock.

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The best advice startups will never follow

Berkonomics

There’s a common expectation among entrepreneurs that seed money from family is great – letting close relatives in at the ground floor. I was a co–lender and assumed the chairmanship of a young startup where the entrepreneur’s cousin also loaned money under the same terms. The problem, of course, comes if the business fails.

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The Corrosive Downside of Acquihires

Both Sides of the Table

Let’s assume $2 million in seed money. If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. I know the buyers try the best to believe that [insert well known founder name here.

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The best advice startups will never follow

Berkonomics

There’s a common expectation among entrepreneurs that seed money from family is great – letting close relatives in at the ground floor. I was a co-lender and assumed the chairmanship of a young startup where the entrepreneur’s cousin also loaned money under the same terms. The problem, of course, comes if the business fails.

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Do the Math

Austin Startup

Further, you demonstrate on your spreadsheet that a venture return to early investors is plausible at a valuation that gives you enough equity to get the job done and to take care of you and your team at exit time. We took an advisor named Howard out there. But, the manner in which you get paid can swing your valuation considerably.

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How long will the “seed stage bubble” last?

andrewchen.co

My reasoning looks something like this: Right now, startups with strong teams can easily raise seed funding ($200-$1.5M They can easily raise seed money because there’s a lot of willing investors in the ecosystem. Not sure how investors feel about it though, as valuations skyrocket and competition becomes fierce.

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How to Fund a Startup

www.paulgraham.com

It wasnt because they werent accredited investors that I didntask my parents for seed money, though. When we were starting Viaweb,I didnt know about the concept of an accredited investor, anddidnt stop to think about the value of investors connections.The reason I didnt take money from my parents was that I didntwant them to lose it.