Startup Professionals Musings

SEPTEMBER 5, 2016

A limited budget makes for a better business plan. Flaws in a business plan are often masked by money, but ultimately will kill any startup. For aspiring entrepreneurs, a fallback plan is always good. Keep later critical financing needs viable. Don’t let early funding increase risk and dilute your potential.

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www.inc.com

SEPTEMBER 24, 2011

Small Business Success | Mondays and Thursdays. The Goods: Your Business Toolbox | Thursdays. Finance | Tuesdays. Todays Small Business News | Daily. Writing A Business Plan. Running A Home-Based Business. Naming a Business. Financing a Small Business. Buying a Small Business.

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Berkonomics

FEBRUARY 21, 2019

I cannot tell you how many times I have seen executive summaries of business plans in which the entrepreneur seeks $5,000,000 to build the business. Third (if you’re keeping score), it is not wise to dilute the founder’s ownership greatly in the first round of financing. Four reasons you should reconsider.

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Startup Professionals Musings

OCTOBER 15, 2016

A popular myth these days is that finishing college only dilutes your entrepreneurial instincts, and the best of the best, including Bill Gates, Steve Jobs and Mark Zuckerberg, dropped out early to hasten their success. Practical business courses are better than an advanced degree or MBA. Starting a business is not rocket science.

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Entrepreneur Chad Incubator Dilution 120

Up and Running

NOVEMBER 5, 2018

As you build your plan, watch your cash flow projections. If your cash balance drops below zero then you need to increase your financing or reduce expenses. And it interferes with the estimates and dilutes their value. It doesn’t include ongoing sales, costs, expenses, assets, and financing after launch.

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Cost Balance Sheet Startup Intellectual Property 150

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.   You can vary both valuation and term-sheet assumptions (in the gray boxes) to assess the impact on the values of the business.   First , dividends.

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The Next Web

MARCH 2, 2014

Instead, honestly analyze the company’s business plan and finances to determine whether the business needs to secure outside funding in order to achieve its objectives, and if so, how much. Should we finance with debt or equity? Here are four main questions to keep in mind during the vetting process: 1.

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Hunter Walker

JANUARY 15, 2016

HW: Because of Dogster you’ve been a sought-after advisor/investor for pet-related startups, which I know for a long time resulted in eye rolling from some of the wild business plans sent your way. TR: Pet businesses can easily get early traction, but have great challenge finding sustained, high-volume growth.

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Technical Review Startup Cofounder SMS 48

Berkonomics

FEBRUARY 24, 2012

I cannot tell you how many times I have seen executive summaries of business plans in which the entrepreneur seeks $5,000,000 to build the business. Third (if you’re keeping score), it is not wise to dilute the founder’s ownership greatly in the first round of financing. Email readers, continue here.]

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Dilution Retention Valuation Equity 72

Up and Running

SEPTEMBER 3, 2010

She also includes a Dun & Bradstreet Credibility Corp list of 10 tips for making your business as credit-worthy as possible. Remember, banks don’t loan money for ideas or business plans. Just plan well, please, before you do it. That’s about paying on time, minding the reporting and credit rating, and so on.

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Small Business Bootstrapping Dilution Finance 79

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? Detailed 30-page business plan. EUR 3 billion are available to fund a maximum of 7,500 startups by 2020! 1-2 years in duration.

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Intellectual Property Angel Investor Dilution Startup 66

Up and Running

AUGUST 28, 2013

Worrying about dilution. In a GREAT business, six months. In a mediocre business, infinity. Business Planning Finance James Altucher Techcrunch' Trying to raise VC money before product or customers. Having fights with partners in the first year. Fire them or split before anything gets out of control.

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Both Sides of the Table

MARCH 11, 2010

Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. It should pop out of your business plan. - So, let’s say you’ve raised $200,000 in friends and family money and you’re thinking about raising a round of $1 million and investors offer you $2 million.

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Venture Capital Startup Silicon Valley Warrant 319

Up and Running

APRIL 24, 2018

Your health startup business plan should be a tool to guide your growth. If you’ve never written a business plan before, take a look at these sample medical startup business plans. At first, you need to focus on developing your business model and validating it. Have a comprehensive growth strategy.

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SBIR Startup Artificial Inteligence Intellectual Property 73

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. 4 from our first year cohort of 10 crossed $1m ARR with less than 15% equity dilution while growing 2x; all are operationally profitable.

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rapidrollout.wordpress.com

JANUARY 15, 2011

And finally, you may be able to avoid diluting your equity. Preserve your equity by using a consulting CTO to ramp up your company before securing early-stage financing and hiring a permanent technology partner. By deciding to use a consulting CTO on a temporary basis, you avoid getting stalled in the earliest stages.

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The Next Web

SEPTEMBER 29, 2013

The Founder’s gut wrongly tells them their business plan has been validated because they received an investment. It should never be the financing event that dictates whether to shift or not. You have to execute the business plan without executing yourself. When should you switch from discovery mode to growth mode?

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Metrics Cofounder Cram Down Liquidity Event 136

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. First, hire an office manager that can double as an admin assistant thereby allowing founders to not get bogged down in minutiae and focus on growing the business.

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Part-Time VPE Fractional VPE Cofounder CTO Hire 79

dondodge.typepad.com

JANUARY 15, 2011

It isnt always possible to have a competitive bidding situation at each financing round so here are some guidelines for funding sources and percentages. Friends & Family can usually raise between $30K and $300K and usually take an interest bearing note that is convertible into stock at the next financing. 5% Managers -.25%

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Equity Employee Dilution Valuation 40

Professor VC

JUNE 20, 2011

Financing, that is.I Now that iControl has raised over $100M, this got me thinking back to our original business plan. One truth of start-up financing is that it generally takes twice as long and twice as much money to accomplish your milestones. As I said up front, I have mixed emotions about the financing.

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Seeing Both Sides

OCTOBER 24, 2015

Thus, the cost of capital for a start-up (and the dilution a founder faces in exchange for that capital) is very high. To fix this one, the rule of thumb I suggest you use is to discount an additional 10% points beyond whatever your finance head says your gross margin is.

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Churn Rate Early Stage Revenue Metrics 20

Both Sides of the Table

DECEMBER 18, 2009

The deal terms were agreed, the combined business plans were prepared and both sets of investors had verbally agreed to do the deal. We commited to getting by on much less capital than was planned. We got their commitment and our existing investors bridged us until the new financing round could close.

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Professor VC

DECEMBER 8, 2015

Not surprisingly, the merger was highly dilutive, particularly to Confinity/PayPal shareholders. I originally got to thinking about this when I received a 485 page information statement on a previously announced merger between Clean Power Finance and Kilowatt Financial. At the IPO, Musk held a 14.2%

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Growthink Blog

DECEMBER 9, 2011

Dave commentary: I mention this a lot when discussing business plan writing. If you feel the need to make the same point several times you end up diluting the power of the message. Avoid superlatives (e.g., we are the best, the market is absolutely exploding, etc.) unless you can immediately back them up with facts.

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Venture Capital Detroit Dilution Partner 102

maplebutter.com

JANUARY 8, 2013

If you believe in it – then finance whatever you can yourself. No investor cares about a business plan. If you’re not into business plans, as an investor, how would you decide if a startup is worth investing in (if you do in fact invest in startups)? . Other sources of capital. They care about real product.

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Technical Review Startup Cofounder Software Review 44

Up and Running

JULY 14, 2015

Or what if a new brilliant idea that you hadn’t considered when you were planning emerges? Build in fluidity to your business plans. I’d implemented a business plan including marketing, engagement, sales strategy and realized a few months in that it wasn’t servicing a key influence or in the sales process.

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