Startup Professionals Musings

SEPTEMBER 20, 2017

Angel investors and venture capitalists don’t make equity investments in nonprofit good causes. What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. Individual and institutional philanthropy.

Angel Investor 132

Angel Investor Equity Technical Review Exit Strategy 132

The Startup Magazine

FEBRUARY 21, 2024

As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. The goal is to transform dormant or underutilized assets into active capital that supports your business.

Technical Review 131

Technical Review Due Diligence Bankruptcy Intellectual Property 131

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

APRIL 17, 2023

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue. Congratulations!

Angel Investor 313

Angel Investor Intellectual Property Investment Bankers Private Equity 313

Startup Professionals Musings

NOVEMBER 21, 2016

They know it’s especially hard to provide a financial return with a free business model. Even non-profits need money to scale, but their pitch should be to philanthropists, not equity investors. Declare a $10 million valuation with no revenue or customers. The average valuation for Angel investments is about $2.5

Intellectual Property 120

Intellectual Property Valuation Technical Review Equity 120

Startup Professionals Musings

OCTOBER 17, 2022

Super angels sometimes drive up valuations. Perhaps because of their focus on building a large portfolio, or their competitiveness, these angels sometimes accept valuations that cause later friction while moving to VCs, or even other angel groups. Marty Zwilling.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

Startup Professionals Musings

OCTOBER 7, 2022

Be prepared to explain your business model. Professional investors expect to see your top three use of funds categories, and how these relate to scaling the business, rather than initial development. How much equity ownership are you willing to offer? Can you justify your use of funds to this investor?

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

FEBRUARY 15, 2015

Angel investors and venture capitalists don’t make equity investments in non-profits. What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. donation equity grant investment non-profit philantropy startup'

Angel Investor 120

Angel Investor Equity Technical Review Exit Strategy 120

Steve Blank

MARCH 12, 2014

The startups and the teaching team crafted a challenge for the kids to tackle using the Customer Development methodology, Lean Launchpad tools and the business model canvas. These two startups had problems they could not solve on their own due to lack of resources—time, people, money.

Lean 334

Lean Customer Development Startup Silicon Valley 334

Steve Blank

MARCH 31, 2014

In spite of this, private equity funds have used the rallying cry of efficiency to hijack corporate strategy and loot the profits that historically would have been reinvested into research and development and new products. Look at the valuations of companies like Tesla, Illumina, and Twitter.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Startup Professionals Musings

SEPTEMBER 15, 2012

What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. Some non-profit entrepreneurs think they can skip the whole plan, rather than just the sections on valuation, equity offered, and exit strategy.

Angel Investor 218

Angel Investor Technical Review Exit Strategy Equity 218

Startup Professionals Musings

JULY 3, 2011

What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. Some non-profit entrepreneurs think they can skip the whole plan, rather than just the sections on valuation, equity offered, and exit strategy.

Angel Investor 238

Angel Investor Technical Review Exit Strategy Equity 238

Startup Professionals Musings

JULY 22, 2020

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue. Congratulations!

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Startup Professionals Musings

JANUARY 4, 2020

Be prepared to explain your business model. Professional investors expect to see your top three use of funds categories, and how these relate to scaling the business, rather than initial development. How much equity ownership are you willing to offer? Can you justify your use of funds to this investor?

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Steve Blank

MARCH 17, 2020

But next the question is, ‘What happens to my business?”. The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? What does your new business model look like? What does my business model look like now? Is this a three-month, one-year or a three-year problem?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

www.inc.com

SEPTEMBER 24, 2011

Will Work for Equity. Dave Graham Business Venture Capital Private Equity GlobalLogic Inc. Determined not to miss another opportunity, Graham has begun waiving fees and instead taking equity in clients he thinks have a good shot at success. Theres a huge opportunity cost in not taking equity," he says.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. Most existing investors (those still in business) hoarded their money and stopped doing follow-on rounds until the rubble had cleared. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Professionals Musings

SEPTEMBER 30, 2013

It doesn’t prove your business model of pricing, distribution, and support. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Get a real customer and real revenue. Show personal investment.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

genylabs.typepad.com

SEPTEMBER 24, 2011

Working for Equity Instead of Cash. has an article on service firms waiving their fees and instead taking equity in their clients. Interest in this waned when the Internet bust resulted in most tech start-up equity becoming worthless, but it seems to be coming back. Not all start-up stock is created equally.

Equity 40

Equity Technical Review San Jose Stock 40

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

NOVEMBER 13, 2021

If you are an aspiring entrepreneur, or an existing business, and haven’t yet sized any of these opportunities, you may be already late to the game. One consequence of the new sharing business model is that goods become services. Access to assets in a community leads to a reduced need to own.

Cuba 316

Cuba Venture Capital Community Valuation 316

David Teten

AUGUST 20, 2019

Many are reporting that they’re seeing a more diverse pool of applicants than traditional equity VCs… even though virtually none have a particular focus on women or underrepresented founders. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital.

Revenue 60

Revenue Cofounder Founder Venture Capital 60

Startup Professionals Musings

MARCH 11, 2016

Come with a product built and a proven business model. Angel investors expect to review a short executive summary before booking time to hear an investor presentation or taking the time to analyze a full business plan. Have a full business plan and financial model to close the deal.

Angel Investor 120

Angel Investor Intellectual Property Accredited Investor Angel Groups 120

Both Sides of the Table

JUNE 22, 2011

But this mania to not miss out on the next big thing is driving some investors to pay growth-equity prices for traditional market risk (as in, they’re paying up before it is clear there is product / market fit). And for some that means that despite waiting they may see worse valuations in the future than now.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Startup Professionals Musings

JANUARY 19, 2020

Super angels sometimes drive up valuations. Perhaps because of their focus on building a large portfolio, or their competitiveness, these angels sometimes accept valuations that cause later friction while moving to VCs, or even other angel groups. Marty Zwilling.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

YoungUpstarts

MAY 30, 2016

There are a few benefits to bootstrapping your way through your business growth. For one, the business owner continues to own major equity which gives them greater financial leverage and control. Also, by their very nature, bootstrapped businesses are built on sustainable business models.

Bootstrapping 100

Bootstrapping Germany United States France 100

Startup Professionals Musings

AUGUST 31, 2012

It doesn’t prove your business model of pricing, distribution, and support. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Get a real customer and real revenue. Show personal investment.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Startup Professionals Musings

OCTOBER 19, 2015

In fact, an entrepreneur friend of mine, who made millions on her marketing expertise, asserted recently that most inventors fail in business because they refuse to believe that any business expertise or experience is worth more than 5 percent in partner equity. Intellectual property is a business issue, not a technical issue.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

Startup Professionals Musings

DECEMBER 9, 2019

Crowdfunding, on the other hand, opens the investment door online to almost anyone who is willing to bet on a new product or service with an investment, typically for a chance to be first in line for the offering, and willing to forgo any equity or management position in the company. Investors are very wary of unknown owners and valuation.

Non-disclosure Agreement 299

Non-disclosure Agreement Angel Investor Bootstrapping SEC 299

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. So it makes it a lot more challenging when you have debt on the books that isn’t as longer term as equity. Business model? What are some pros and cons?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

NOVEMBER 4, 2011

The corporate entity lends itself best to the concept of “sharing” equity required by investors, and unincorporated entities don’t get funding. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model.

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

ReadWriteStart

JULY 17, 2023

The platform has raised over $225 million through equity and debt financing to date. Furlenco’s innovative business model has disrupted the traditional furniture industry in India. On the other hand, Sheela Foam will benefit from Furlenco’s innovative business model and expertise in the furniture rental space.

India 104

India Acquisition Merger Curation 104

Startup Professionals Musings

JUNE 6, 2010

What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. Some non-profit entrepreneurs think they can skip the whole plan, rather than just the sections on valuation, equity offered, and exit strategy.

Angel Investor 143

Angel Investor Technical Review Exit Strategy Equity 143

Startup Professionals Musings

JUNE 17, 2011

It doesn’t prove your business model of pricing, distribution, and support. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Get a real customer and real revenue. Show personal investment.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Austin Startup

FEBRUARY 13, 2019

Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. Our strategic investor had a major impact on the way we shaped our business model, and we owe a lot of our success to his advice. With that in mind, we were not shy about being picky.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Steve Blank

MAY 19, 2015

While he kept bringing the conversation back to their big valuation I tried to steer the conversation back to how they were going to deal with: training the influx of new hires – in both culture and job specific tasks. retaining their existing hires who were working for intern-like salaries with little equity.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Startup Professionals Musings

SEPTEMBER 23, 2010

The corporate entity lends itself best to the concept of “sharing” equity required by investors, and unincorporated entities don’t get funding. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model.

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224