Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Hunter Walker

SEPTEMBER 15, 2023

So when I tell you what I’m seeing in venture financing these days if you disagree with me, it might just be that we’re touching different parts of the elephant. When $20B outcomes occur everyone on the cap table eats well. Because you start to care more about basis points than the cost to get those basis points.

Cap Table 93

Cap Table Valuation Salary Seed Stage 93

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. Repaid 12-36 months with ability to prepay at reduced cost. For RBI, return caps of 1.2x-1.8x According to John Borchers, Co-founder, Decathlon is the largest revenue-based financing investor in the US.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a cap table simulator to help level the playing field.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Hunter Walker

MARCH 14, 2019

All the disruption can be pretty jarring to an entrepreneur, especially in situations where the exiting partner represents the top line on your cap table. You’ll often need the support – both structurally and symbolically – of some other investors on the cap table to make the case for some of the ideas below to work.

Cap Table 95

Cap Table Dilution Silicon Valley Portfolio 95

David Teten

NOVEMBER 14, 2019

That said, venture capital is just one of many options to finance your business, and it’s typically the most expensive. The first step is to decide the right capital structure for your financing. Braavo specializes in financing app companies. The broader question is: what type of capital should you raise, and from whom? .

SBIC 60

SBIC SBA Cap Table Database 60

Austin Startup

AUGUST 20, 2017

Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company. Can you acquire them at a sustainable cost? You can print shares all day long even if you have no cash, so I get the need for that from time to time.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis. (If

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Altgate

JUNE 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 44

Equity Vesting Cap Table Technical Review 44

Altgate

AUGUST 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 28

Equity Vesting Cap Table Technical Review 28

The Equity Kicker

MARCH 21, 2017

There is clearly dysfunction in chasing growth at all costs – inherently unprofitable companies grow to employ thousands of people before going bust, resulting in much personal anguish and not a little wasted capital. Companies that aren’t chasing unicorn status find it hard to raise money.

San Francisco 90

San Francisco Cap Table Angel Investor Valuation 90

keen.io

FEBRUARY 5, 2013

To begin answering this question, I started on a quest to understand startup financing. This book was written to help founders negotiate financing with investors, but it really helped me understand Keen’s financial situation, and I highly recommend it to anyone joining a startup. First, I read Venture Deals by Brad Feld.

Salary 50

Salary Equity Startup San Francisco 50

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Feld Thoughts

SEPTEMBER 7, 2010

Here he said something that made me pause: “We’ll sell them back to the founders, the company, or the angels at somewhere between $1 and our cost.&# I probed on this (as in “seriously, can you give me some examples?&# ) Without naming names he explained three situations in the past two years where they’ve done this.

Cap Table 134

Cap Table Reputation Finance Programming 134

Feld Thoughts

AUGUST 12, 2011

When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. Revenues and costs should both be based off of a robust set of assumptions. as a C-Corp in Delaware. Build a financial model that forecasts the P&L.

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Lower processing cost. Much lower cost of capital, if company is highly successful. The cost of VC funding to a unicorn CEO can easily be the equivalent of paying well over 100% annual interest.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Eric Friedman

JUNE 27, 2016

I have seen what I call “predatory advisors” come in and really mess up a cap table by promising big intros and sales contracts only to disappear after the first 6-12 months. If a relationship isn’t working out, you can terminate it or renegotiate to mitigate costs.

Equity 98

Equity Vesting Cap Table Common Stock 98

This is going to be BIG.

DECEMBER 3, 2020

Depending on the minimum investment size, if you think about what hiring an actual analyst, or someone more senior, might cost you to look at deals you’re serious about, an investment in a fund could may for itself in access. Less than that and you need something else to bring to the table. b) Reputation for adding value.

Portfolio 134

Portfolio Syndicate Syndication Deal Flow 134

Both Sides of the Table

FEBRUARY 8, 2016

The smartest companies in the market that I know are working aggressively to lower burn rates through pragmatic cost cutting knowing that the next fund-raising cycle may be unpleasant. I’ve heard enough companies say “we simply can’t cut costs or it will hurt the long-term potential of the business” to get a wry smile.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

venturehacks.com

MARCH 21, 2008

The opportunity cost is probably too high. Or you can just “burn the boats at the shore&# and give the advisory shares to the investor with the agreement that he will invest a minimum amount in the financing. All our products Pitching Hacks , Cap Table , and Co-founder Interview. Learn more. Buy it here.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Austin Startup

SEPTEMBER 4, 2017

If you do eventually expose your company to those professionals, all your dumb shareholders will get crushed in the new cap table. This recent meeting may have been he first time I’ve heard a startup build its financing strategy strictly on the perceived availability of dumb money. I do try to give equal opportunity advice.

Cap Table 48

Cap Table Austin PR Founder 48

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

This is going to be BIG.

JUNE 2, 2010

I’m sure you’ll start seeing some rounds that essentially should be B rounds according to what the current cap table looks like, except that there’s a Series A level of progress, and about a million bucks in product overspend that didn’t really lead to a business. Once you have that, keep your focus simple. Try to prove one thing.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# If you don’t keep your eyes on the option pool, your investors will slip it in the pre-money and cost you millions of dollars of effective valuation. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

www.payne.org

SEPTEMBER 22, 2011

Buying your stock would cost $200,000! At a minimum, do your own personal finance homework so you know how much salary you need to live and not spend your savings. The other factor is the "cap table" (capitalization table, or summary of who owns what stock). Why cant the company just grant you the stock?

Equity 56

Equity Employee Vesting Preferred Stock 56

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat. 2015 was the exact opposite.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 22, 2011

I understand the appeal of having many VC firms on your cap table. You may feel as I did in 1999 that the more smart people around the table the more intros you’ll have, the more sage advice you’ll receive and the more impressive you’ll seem to outsiders. The Perils of Many.

Dilution 314

Dilution Cap Table Due Diligence Option Pool 314

abovethecrowd.com

JUNE 2, 2021

According to an interview with Elon Musk, this campaign cost Paypal about $60 million , which most Silicon Valley historians would consider money well spent. It would cost a tremendous amount of money to run such a program. With the 7% banker fee that is a 35% AVERAGE cost of capital. Billions of dollars. Wouldn’t that be great?

IPO 82

IPO Customer Matching Silicon Valley 82