Startup Professionals Musings

DECEMBER 11, 2022

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Undefined business model or very low gross margins. Ask only for the money you can justify. Naïve expectations on funding terms and process. Surprises during due diligence.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Steve Blank

APRIL 26, 2022

They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. Some even insisted that all prior preferred stock had to be converted to common stock. Founders rationalize it’s good for their employees. You’re not.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Professionals Musings

MARCH 14, 2020

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Undefined business model or very low gross margins. Ask only for the money you can justify. Naïve expectations on funding terms and process. Surprises during due diligence.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Startup Professionals Musings

AUGUST 1, 2016

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Undefined business model or very low gross margins. Ask only for the money you can justify. Naïve expectations on funding terms and process. Surprises during due diligence.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Steve Blank

OCTOBER 24, 2017

— all great things when you are executing and scaling a known business model. Because the new CEO had built a team capable of and comfortable with executing an existing business model, the company would fail or get acquired. Board Control. For three decades (1978-2008), investors controlled the board. The founders.

Founder 245

Founder Technical Review CTO Hire IPO 245

Tim Keane

JANUARY 12, 2010

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model. Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Growthink Blog

MAY 10, 2012

Your first year or two in business is where your dreams merge with reality and take a new form to guide your future efforts. Many entrepreneurs end up taking their company in a different direction after some time spent testing your initial business model. Series B is the round that follows series A in early stage financing.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88