Startup Professionals Musings

JANUARY 4, 2020

One of the big questions that every entrepreneur struggles with is how much funding they should request from investors in the first round. Be prepared to explain your business model. Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

View from Seed

APRIL 30, 2015

Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. From a company milestones perspective, entrepreneurs who take on venture debt are almost always thinking about raising that next round of capital from other institutions.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

APRIL 12, 2021

In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process. The advisor will give you real credibility. Assess your resource potential before you start.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Both Sides of the Table

JANUARY 4, 2014

Equity for the future? If you are the person staying how resentful will you become working your arse off for equity that your co-founder who leaves will get value from. If you give up after this you’re not an entrepreneur. What should the financial settlement be for the founder leaves be? We sat down the three of us.

Founder 340

Founder Sacramento Cofounder Technical Review 340

Startup Professionals Musings

JANUARY 26, 2019

Being called a lifestyle entrepreneur should be a point of pride, not an insult. This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans.

Startup 194

Startup Equity Dilution LLC 194

Startup Professionals Musings

JANUARY 19, 2020

This can cause early investor dilution, lower ultimate returns or leave the startup stranded. Yet, in my view, every early-stage entrepreneur should be exploring this new funding alternative before approaching VCs. It’s the right way to get money without giving up too much equity or control of your business.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

Startup Professionals Musings

JANUARY 21, 2017

Being called a lifestyle entrepreneur should be a point of pride, not an insult. This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

Startup Professionals Musings

SEPTEMBER 10, 2012

Being called a lifestyle entrepreneur should be a point of pride, not an insult. This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans.

Entrepreneur 241

Entrepreneur Equity Dilution LLC 241

Startup Professionals Musings

SEPTEMBER 5, 2016

In my experience as an advisor to aspiring entrepreneurs, I often encounter the myth that an initial startup requires investors. The reality is that over 80 percent of new businesses will never attract venture capital or Angel funding, according to experts , and there are many good reasons for skipping that painful and distracting process.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

ReadWriteStart

JANUARY 27, 2011

This partnership speaks to a core philosophy of the program where we encourage entrepreneurs to get as much customer validation as possible before raising too much money, use other people's channels if you can get to them, don't burn too much cash, and all that good fiscal conservative stuff. LetsGiftIt.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Startup Professionals Musings

FEBRUARY 9, 2018

Bootstrapping allows you to maintain full control of your startup strategy, retain maximum equity, and avoid the time delay and energy spent to attract outside investors. You need a business degree to start a venture today. Business strategies are best learned from experience. Most successful entrepreneurs are young and crazy.

Incubator 180

Incubator Angel Investor Dilution Equity 180

Austin Startup

FEBRUARY 13, 2019

Not necessarily the entire business, but at some point, something will fail and you’ll either learn from it and grow or it will be the beginning of the end. Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Startup Professionals Musings

OCTOBER 10, 2013

Being called a lifestyle entrepreneur should be a point of pride, not an insult. This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans.

Founder 231

Founder Equity Dilution LLC 231

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. Put aside the frauds and hucksters — time and transparency will cause them to shake out — and obviously not every business model is a fit for an ICO. But many are. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. Put aside the frauds and hucksters — time and transparency will cause them to shake out — and obviously not every business model is a fit for an ICO. But many are. Fuzzy Governance.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Both Sides of the Table

SEPTEMBER 12, 2010

“Hi [entrepreneur], I hope all is well. It looks as though you’ve built a very interesting business, and I’d love to spend some time getting a better understanding of your future plans for the company and if there is an opportunity to partner with [My Firm]. Why do VCs send generic outbound emails like this?

Programming 294

Programming Entrepreneur Private Equity Equity 294

ReadWriteStart

SEPTEMBER 10, 2010

During this week's roundtable we discussed an area that deserves a serious look from entrepreneurs: Rural BPO. Today, I invited entrepreneurs to come up with ideas, apply the 1M/1M methodology to it, and come discuss with me at these roundtables. Whether it is credit or equity, funding is very, very tight.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Startup Professionals Musings

DECEMBER 27, 2014

This can cause early investor dilution, lower ultimate returns or leave the startup stranded. Yet, in my view, every early-stage entrepreneur should be exploring this new funding alternative before approaching VCs. It’s the right way to get money without giving up too much equity or control of your business.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Startup Professionals Musings

MARCH 7, 2015

One of the big questions that every entrepreneur struggles with is how much funding they should request from investors in the first round. Be prepared to explain your business model. Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Both Sides of the Table

NOVEMBER 23, 2012

And equal numbers of startups seeking celebrity endorsements in exchange for equity. Don’t give up your hard-earned equity to celebrities. So having a huge celeb who takes 10% of your company is – well – taking 10% dilution for 0% benefit. For the most part my advice is simple, “don’t bother.”

Startup 321

Startup Equity Warrant Dilution 321

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Transformify

JULY 23, 2018

To boost innovation and SME sector growth, the EU Commission has launched the SME Instrument of the Horizon 2020 program – the largest non-dilutive fund in the world. Why non-dilutive? It is a grant, not an equity funding. The startups are not selling equity or issuing new shares.

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

VC Cafe

SEPTEMBER 26, 2010

A fter years of talking with many of you in the Israeli startup industry, investors and entrepreneurs alike, I was invited to present some tips for entrepreneurs at the Launch48 conference in London this weekend. The entrepreneur-investor relationship is a little bit like marriage. Get out there and talk to potential customers.

Elevator Pitch 102

Elevator Pitch Incubator Technical Review Startup 102

Lightspeed Venture Partners

NOVEMBER 19, 2012

This business can’t work. The next two entrepreneurs run a wine tasting cruise business. Daymond had invested in a competitive business previously, so he bowed out. Cuban loved both the idea and the entrepreneur. With a 15% churn rate, that suggests about $7 in lifetime value. Corks Away.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

maplebutter.com

JANUARY 8, 2013

If you’re an Entrepreneur, you can do it from any place in the world. How important is education when I know I want to be an entrepreneur? I don’t have any formal business training and I actually think it’s served me well. If you’re a young entrepreneur, than congrats! Ask [link] – you don’t need to be in the valley.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Berkonomics

AUGUST 27, 2015

He has written numerous books and articles for entrepreneurs and investors, and was the publisher and editor-in-chief of Venture Magazine. Mr. Lipped addresses the issue of exits, and whether entrepreneurs should take the long view or cash out quickly when the opportunity arises. By Arthur Lipper.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Lightspeed Venture Partners

OCTOBER 22, 2012

The founders have more demand than they know what to do with, and want to raise $55k for 5% equity in the company to buy a second truck. Robert came back with $100k for 25% ($300k pre money), and made the point that success in this business comes from scale, and the extra money would allow them to buy two trucks instead of just one.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Small Business Force

OCTOBER 22, 2017

As an entrepreneur with multiple startups I founded; as CEO or senior executive of several small companies that either were public or went public; as an investment banker for dozens of small business clients; as an angel investor in various startups and small business opportunities. Less dilution!

Entrepreneur 25

Entrepreneur Angel Investor Valuation Investment Bankers 25

Up and Running

DECEMBER 9, 2014

Are you an entrepreneur or small business owner with questions about funding your small business? Maybe you are wondering which metrics to track, or whether or not you should take out a loan for your business. I’m the CEO of Executive Speaking Success and I’m a long-time entrepreneur.

Small Business 95

Small Business Finance Forecast Metrics 95

Professor VC

DECEMBER 8, 2015

one company running out of cash and another with cash but searching for a business model). Musk was the early winner taking the CEO role (for a brief period) in the merged company and the largest equity stake as well. Not surprisingly, the merger was highly dilutive, particularly to Confinity/PayPal shareholders.

Merger 28

Merger LP IPO Redemption 28

Both Sides of the Table

FEBRUARY 14, 2016

Most venture capitalists who have been in this business for a long time foresaw this correction and have been talking about it privately for the better part of the last year or two. ” “This will be great for VCs and bad for entrepreneurs.” What is the True Sentiment of VCs? ” “Sure, prices are dropping.

Valuation 150

Valuation Down Round Startup Later Stage 150

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. While currently free to angel groups, their business model revolves around aggregating the angel investment data. Touched by an Angel.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Professor VC

JUNE 20, 2011

I took a look back at our original financial model we presented to VCs in 2004. The business model (OEM through broadband and home security companies for mass distribution) if not specific product functionality has remained largely the same. Before the $52M Series D , the $23M Series C , the $15.5M So what does this all mean.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28