David Teten

JANUARY 21, 2021

VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020. They share their learnings on Flexible VC and pioneering rural startup ecosystems on the GCVF blog. II: Who are the major Revenue-Based Investing VCs?

Equity 78

Equity Revenue Cofounder Colorado 78

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. price based anti-dilution). Then they laugh at you. Then they fight you. Then you win.”

Finance 58

Finance Term Sheet Equity Aggregator 58

Both Sides of the Table

AUGUST 14, 2017

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. ICOs certainly have a place in startup financing. There’s a lot of mystique about what happens at board meetings and a lot of imagined board-room drama.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. This might happen because to meet all investors needs they end up selling too much of the company, taking too much dilution and feeling beat up. Thus begins the dance. Aren’t they getting screwed?

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

SEPTEMBER 16, 2010

avoid being diluted). “When our capital and participation has helped de-risk a business to the point where it is appropriate to follow on and finance growth, we want to step up to do our pro rata and beyond.&#. In the worst case you want to protect your prorata investment as much as possible (e.g. But it is.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

View from Seed

OCTOBER 28, 2019

But this financing contour description is just a proxy for underlying business metrics. In reality, a pre-seed is “an early round of financing that is designed to help a company achieve certain intermediate milestones PRIOR to the magic combination of strong PMF + meaningful traction.”.

Seed Stage 247

Seed Stage Finance Dilution Early Stage 247

Up and Running

DECEMBER 9, 2014

Bates: Good morning and welcome to our CEO panel, “How to Fine-Tune Your Small Business Finances From Funding to Growth” which I think is the direction that we would all like to be going. I’m here with some really phenomenal CEOs who are going to talk to us today about small business finances from funding to growth.

Small Business 95

Small Business Finance Forecast Metrics 95

Both Sides of the Table

MARCH 21, 2013

I recently wrote a blog post in which I pointed out that many investors & advisors discourage enterprise startups from having a professional services (PS) business and I think this is a big mistake. This article originally appeared on TechCrunch. By year 2 I’d like to see PS at 50% maximum, which is still high.

Software Review 321

Software Review Software IP Technical Review 321

View from Seed

DECEMBER 4, 2019

Over the last 10 years, we’ve been in a bull market with considerable froth in late stage financing activity and valuations. These growth rounds may be more dilutive than planned, but will still occur without punitive terms and allow founders, teams, and early investors to emerge with very successful outcomes at the very end.

LP 256

LP IRR Distribution Portfolio 256

ReadWriteStart

SEPTEMBER 10, 2010

I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though). In 1M/1M, our preferred financing strategy is customers. You can get cash without diluting your ownership in the company.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

www.avc.com

SEPTEMBER 22, 2011

This "best value" can be the valuation on the last round of financing. Whatever approach you use, it should be the value of your company that you would sell or finance your business at right now. The other important data point is the number of fully diluted shares. And this blog doesn't come with end user support.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

ReadWriteStart

JUNE 1, 2020

If you are facing any problem you can always check out this: Business Loan vs. Equity Financing. Raising higher capital at an early stage means more equity to be diluted to the investors. Please feel free to check out my blog, Arnab Ray’s Blog — I have additional information there about the startup ecosystem.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

View from Seed

JULY 15, 2020

Many of these companies are probably valued at their last financing round, which probably occurred in a very frothy funding environment. Other companies are great businesses, but are effectively encountering a dilution event. These businesses are not under existential threat, but have unfortunately hit the funding market at a bad time.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Business Plan Blog

OCTOBER 4, 2013

Rather, give titles such as VP of Engineering, Product/Technology, Sales, Marketing, Finance, etc. Having too many co-founders will only lead to your eventual dilution. Hire a VP of Finance that can increase profitability by monitoring operations, legal fees, HR expenses, office space and the like.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

David Teten

JANUARY 19, 2021

Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Further reading: The Evolution of Entrepreneurial Finance: A New Typology. Of the Inc. 5000 companies, only 6.5% raised money from VCs and 7.7%

Cofounder 78

Cofounder Technical Review Equity Dividend 78

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Blog Archives.   That’s because there are not that many issues to negotiate in a simple equity financing. Have you had anyone from Canada use these documents for financing a Canadian (Quebec) entity? SeriesSeed.com. « Step 2 (as opposed to version 1.1) | Main.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Austin Startup

MARCH 26, 2019

For the reader of this blog that owns a young digitally-native brand, my guess is that retail isn’t an actionable part of the strategy yet and you’d be better served optimizing DTC for now. Discounts too early can also have the adverse effect of diluting a brand when targeting a more affluent customer segment.

Technical Review 49

Technical Review Software Review China Acquisition 49

Altgate

DECEMBER 15, 2010

It is a pretty narrow filter of the 750+ companies that completed the 2010 CompStudy survey, but there are 55 rounds of financing to look at…enough to be a meaningful dataset I think. This chart shows that adding additional founders to the team is in fact dilutive, but also that the more founders the more dilutive.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

View from Seed

SEPTEMBER 19, 2019

That may not seem like a big deal in the moment, but at the next financing round, the pro rata rights of all the prior investors may add up to a pretty big number, creating a fistfight for allocation. It could also mean investing in companies that avoid significant downstream dilution due to capital efficiency or very rapid value creation.

Dilution 136

Dilution Early Stage Business Model Founder 136

ReadWriteStart

OCTOBER 28, 2010

Contributors include dozens of TechStars mentors and founder alumni, including Dharmesh Shah the founder and CEO of HubSpot and the curator of the OnStartups blog and community. Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Raise angel funding?

Cofounder 128

Cofounder Founder Equity Dilution 128

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing. Small Business Success | Mondays and Thursdays. Franchises.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Seeing Both Sides

AUGUST 28, 2017

Note: my blog has moved to www.seeingbothsides.com. But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens?

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Note: my blog has moved to www.seeingbothsides.com. But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens?

Early Stage 20

Early Stage Equity Venture Capital Government 20

Both Sides of the Table

SEPTEMBER 25, 2011

Yesterday I saw a Tweet from Chris Sacca fly by that prompted me to want to write a blog post helping entrepreneurs understand why they should push back against VCs asking for “super pro-rata” rights. They might own 8% of your company after the first funding but demand up to 33-50% of your next round of financing.

Entrepreneur 310

Entrepreneur Dilution Finance Silicon Valley 310

Hunter Walker

SEPTEMBER 5, 2021

I really liked Jason Lemkin’s “ Do You Have a Weak Investor Syndicate ” blog post from earlier in the summer. As a venture fund I might have a strategy which says “for every dollar I invest into companies, I will hold one dollar in reserve for additional financings.” Go read it and then come back here…. Long term greedy!!!!

Cap Table 94

Cap Table Seed Stage Syndicate Syndication 94

The Equity Kicker

JULY 4, 2012

Regular readers will be well aware that through 2011 and into early 2012 Nicholas Lovell and I were writing a series of 50 blog posts designed to help entrepreneurs with the fundraising process, and that we intended to publish them in book format once we were finished.

Venture Capital 107

Venture Capital Due Diligence Participating Preferred Dilution 107

Both Sides of the Table

APRIL 25, 2011

It’s nearly impossible to get a services company financed by VCs. They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. You’re a small fish. This team is talented. They wanted advice.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

DECEMBER 1, 2009

If you’ve read my blog for a while you’ll know that I’m a fan of starting businesses in a non-traditional way. You agonize over whether it is better to take a “A investor&# for 30% dilution or a “nice to have&# investor for 25% and on better terms.

Hiring 289

Hiring Cofounder Dilution Startup 289

Scott Edward Walker

APRIL 8, 2013

I’m using Twitter as a form of micro-blogging to share interesting blog posts, articles and podcasts relating to entrepreneurship and startups, M&A and legal issues. “Be careful not to have too many co-founders; it’s the most expensive dilution you’ll ever face.” Seed Finance Survey 2012 (via Fenwick) [link].

Dilution 49

Dilution Cofounder RSS Finance 49

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders.

Dilution 54

Dilution Equity Warrant Distribution 54

David Teten

NOVEMBER 17, 2011

This is the third of three blog posts on financial modeling for startups. I’ve often found it helpful to have on hand a simple model showing the impact of each financing stages on all team members, suitable for sharing with everyone in the company. I couldn’t find one online, so I built it. Photo credit: dierken.

Employee 155

Employee IRR Startup Mexico 155

www.mattbartus.com

SEPTEMBER 24, 2011

Blog blog archive. We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” Cooley Report Reviews Second Quarter Venture Capital Financing Trends. Sorry, your blog cannot share posts by email. A View from the Valley. Quora Answers.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Genuine VC

JANUARY 10, 2012

I recently received a email from an entrepreneur who I know with a genuine question about terms of his financing: " How do you guys at NextView feel about one of our investors holding super pro - rata rights for the next round?"

Term Sheet 131

Term Sheet Burn Rate Valuation Dilution 131

www.instigatorblog.com

OCTOBER 23, 2010

The more that those first employees feel like founders in terms of their ownership, emotional attachment, responsibility and overall understanding of the startup process (including financing , running day-to-day activities, etc.) 1% is even less after you factor in dilution. 1% is even less after you factor in dilution.

Equity 41

Equity Employee Startup Vesting 41

keen.io

FEBRUARY 5, 2013

Youre reading Radical Transparency — a blog brought to you by the team at Keen IO. To begin answering this question, I started on a quest to understand startup financing. True to my consulting roots, I made yet another Excel spreadsheet, plugging in the equations and the variables I found in the blogs mentioned above.

Salary 50

Salary Equity Startup San Francisco 50