Common Stock Dilution Early Stage Revenue 
David Teten
JANUARY 19, 2021
More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.
ReadWriteStart
JUNE 1, 2020
The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. The shares given out can either be common stocks or preferred stocks. ? Debt investment. Early-stage. Incubators and Accelerators.
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Both Sides of the Table
SEPTEMBER 18, 2014
Revenue multiple? And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. Your A round?
Both Sides of the Table
MARCH 21, 2010
Plus, we’re all allured by the false sense that our contract with BigCo is going to “make us&# because once they start using us it will spread like wildfire and the revenue will flow in. They negotiate a “master agreement&# to work with your company with some maybe minimum guarantees in terms of revenue.
Gust
OCTOBER 12, 2011
In my experience, a term of 12 to 24 months is common, with 12 months being on the short end. Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs.
Gust
SEPTEMBER 17, 2014
Revenue multiple? And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? But how do I offer cheaper prices to early investors?” How will you price the next round? Your A round? Him: On metrics. We’ll have some proof points by then. EBITDA multiple?
Berkonomics
DECEMBER 6, 2010
Use stock options and warrants to pay for service only rarely. Earlier, I stated that stock options are the currency of early stage business. Second, when making such a decision, assess the speed of growth and risks associated with that growth, as both would affect the value of the common stock.
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