David Teten

JANUARY 19, 2021

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. That said, nothing is cost-free. More complex cost of capital calculation. Inversely, if the company has slower than predicted growth, the effective cost of capital is automatically lowered.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

FEBRUARY 20, 2019

It’s not zero calories but with the right board the benefits should far outweigh the time and emotional costs. For starters, the incoming CEO will demand between 4–6% of the company so shareholders will immediately face dilution. It is ultimately a negotiation but I don’t think founders should fear having boards.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

YoungUpstarts

MAY 9, 2017

Lean organizations are lightweight and nimble enough to pivot based on shifting demands. individuals dilute their focus and slow their productivity. 9 Reduced Costs. Also related to business agility is the ability to synchronize efforts in the midst of changing priorities. 4 Better Project Visibility at the Team Level.

Lean 124

Lean Agile Technical Review Dilution 124

Startup Professionals Musings

NOVEMBER 6, 2020

Once you accept equity investor money, or go public with stockholders, you won’t believe the things they demand, and the legal rules you have follow. With major investors, your equity and return is diluted and delayed. You want to be your own boss, and do things your way. Take pride in your leadership role in the local environment.

Small Business 311

Small Business Small Business Administration SBA Equity 311

YoungUpstarts

OCTOBER 14, 2019

And when there’s so much demand for some mind-twisting, enjoyable experience, success in such business is inevitable. Doesn’t cost much. One of the reasons why you should think about building an escape room, if you are already thinking about venturing in something, is the cost of such setup is not much. Meaning, there’s demand.

Dilution 113

Dilution Demand Revenue Cost 113

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. COGS” represents the amount that each sale costs you. After all, they doubled their operating costs when they weren’t even profitable.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

ReadWriteStart

JUNE 1, 2020

In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. Capital is expensive.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

JULY 26, 2019

In fact, studies have shown that the long-term value of coaching has a return of at least 2x to more than 100x times the cost. People need coaching to weather setbacks and surprises which can dilute their confidence, and take away their ability to experience their full potential. Good coaches prepare for each session and follow up.

Dilution 229

Dilution Agile Developer Demand 229

Version One Ventures

FEBRUARY 6, 2019

The cost of bringing a drug to market is expensive (hundreds of millions of dollars to billions of dollars) and risky (it simply might not work!). This aggressive ownership target is one reason more and more founders are looking for capital from IT/tech VCs who don’t demand as much equity.

Dilution 132

Dilution Artificial Inteligence IPO Valuation 132

Both Sides of the Table

FEBRUARY 17, 2011

For many businesses you should keep your costs low & your capital raises low until you discover whether you are really on to a big idea where there is market demand. If you are able to raise money from credible sources at a reasonable dilution percentage then I personally favor getting the round done now and building your business.

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

YoungUpstarts

MARCH 1, 2019

Small businesses in particular may find it difficult to keep up with the new demands of customers shopping online, including the expectation of free, fast shipping. There is an option to increase the pricing of products to ensure the cost of quick shipping is covered, even when it is offered at no additional expense to the customer.

Matching 113

Matching Dilution Small Business Partner 113

Startup Professionals Musings

MAY 18, 2015

To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. This is called stock dilution control. Otherwise, people with no ongoing effort (“free riders”) will own the value growth that you are adding after their departure.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Company Lawyer

MARCH 14, 2010

If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection. Deleting anti-dilution rights saves several pages of text in the Certificate of Incorporation. Future rights. Right of first offer on future financings.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Startup Professionals Musings

JANUARY 29, 2018

Buying back stock on the open market may cost a huge premium. Manage dilution with proper use of new investment terms. Investors typically demand preferred stock to give them more control and first payouts, but these advantages can be at least partially offset (up to 20 percent) if you plan ahead.

Stock 129

Stock Vesting Preferred Stock Cofounder 129

Startup Professionals Musings

SEPTEMBER 5, 2016

Many aspiring entrepreneurs jump ship from corporate environments, complaining that they want to be their own boss, only to find that investors are more demanding bosses than the ones they left. Don’t let early funding increase risk and dilute your potential. A limited budget makes for a better business plan.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. Then the same company gets encouraged to spend that money to accelerate and to grow quickly, which in turn means it runs out of that money more quickly, and then needs to raise even more money.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Lightspeed Venture Partners

NOVEMBER 19, 2012

They believed that they could get customer acquisition costs to the $10-12 range, but as Cuban points out, that was just hope, they had no evidence to back this up. All e-commerce businesses should be examined through the lens of customer acquisition cost and lifetime value. The cost of shipping and handling is at least 4 x $2= $8/mth.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. Then the same company gets encouraged to spend that money to accelerate and to grow quickly, which in turn means it runs out of that money more quickly, and then needs to raise even more money.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

APRIL 25, 2011

Service as a bridge to a product business - One of the best ways for young startups to finance their business without any dilution is what I call “customer financing,&# which is mostly only possible in businesses that target businesses rather than consumers. There are at least two types of tech services businesses in my mind: 1.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Gust

DECEMBER 23, 2011

By the way, there’s a very beautiful thing about organic growth, aside from the absence of dilution: it usually forces you to try to monetize early. There’s no better test of how well your idea works, nor any better way of iterating it to real market demand, than to watch how the checks come in.

Intellectual Property 127

Intellectual Property Balance Sheet Dilution Bootstrapping 127

Lightspeed Venture Partners

OCTOBER 22, 2012

The founders have more demand than they know what to do with, and want to raise $55k for 5% equity in the company to buy a second truck. But it only costs $65k to buy a new food truck, so it is easy for others to enter the market. They have more demand than they can fulfill already. and costs $1.10 Freaker USA.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Tim Keane

JANUARY 12, 2010

  It is very expensive if you’re the entrepreneur since it doubles the cost to the company of paying dividends to the entrepreneur.   A full ratchet anti-dilution clause is very unfriendly to entrepreneurs; it requires them to make up the entire difference in price from their own holdings.   Why is this fair? .

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Lessons Learned

AUGUST 24, 2009

The other revels in the world as we all know it will be someday: limitless distribution enabled by new technologies, the importance of collaborative filters, and on-demand availability of all content for end-users. As the costs of production fall, it’s getting easier and easier to send in a proposal or even a complete work.

San Francisco 113

San Francisco Lean Technical Review Distribution 113

Duct Tape Marketing

AUGUST 20, 2019

As consumers’ attitudes towards video shifts, it’s up to you to meet that demand and give the people what they want! But sometimes that passion appears diluted when you try to write about it. There are tons of great opportunities to incorporate video all throughout your marketing efforts, from social media to your website.

Video 74

Video Social Media Flash Dilution 74

Both Sides of the Table

SEPTEMBER 5, 2012

In a standard VC term sheet there is a standard term called an “anti dilution provision” and they are in nearly 100% of deals. It has nowhere near the same dilutive effects as a full ratchet except in extreme edge cases. But my $500k, while only buying 10% of the company (and now diluted down to 7.5%

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

MARCH 11, 2011

He took out an ad in the Yellow Pages (it was the early 80′s, pre Internet), which cost him $1,000 / month for a half-page ad. That gave Google a huge cost advantage. Too many entrepreneurs focus on dilution. But over-optimizing for dilution is a bad attribute relative to focusing on creating a big & winning company.

Product 350

Product Tuvalu Dilution Incubator 350

Startup Lessons Learned

JUNE 15, 2009

As a consumer internet company with millions of customers, it may seem to have little relevancy for an enterprise software company with only a handful of potential customers, or a computer security company whose customers demand a rigorous audit before accepting a new release. Who will ultimately bear the cost of their mistakes?

Continuous Deployment 167

Continuous Deployment Software Review San Francisco Lean 167

Up and Running

APRIL 24, 2018

You and your team must know how to think about problems from new angles and adapt to changing market and customer demands. For example, having flexible work hours means you can hire talented candidates from different time zones, which will increase your productivity while keeping the costs down. Have a comprehensive growth strategy.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

David Teten

JANUARY 21, 2021

Jonathan Bragdon , CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments of $50-$300k in post-startup, post-revenue businesses planning to 2X revenues in 12-24 months. Versatile has built out a suite of no-cost portfolio acceleration services to help its companies succeed.

Equity 78

Equity Revenue Cofounder Colorado 78

rapidrollout.wordpress.com

JANUARY 15, 2011

He or she might call himself a “consulting CTO,&# “freelance CTO,&# “on-demand CTO,&# “CTO on call,&# “CTO for hire,&# or just a “technology strategy advisor.&# And finally, you may be able to avoid diluting your equity.

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40

crowdSPRING Blog

AUGUST 7, 2011

Businesses large and small will continue to struggle as long as demand is soft and business budgets are constrained. Cost of capital may increase. The distinct likelihood of higher interest rates means that small business loans will cost more and that credit will be tightened making loans less available to businesses.

Small Business 86

Small Business IRR Government United States 86

K9 Ventures

OCTOBER 10, 2017

Yes, the infrastructure is cheap (to start), but the human costs have gone up dramatically. In order for a company to attract a full Seed round ($2M – $3M), that company needs to show an almost completed product, an advanced prototype, or some kind of traction/demand metrics. Those times are long gone.

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Duct Tape Marketing

JULY 23, 2015

This will dilute your ROI and hurt results. This means they’ve taken and passed a series of demanding tests from Google to prove their know-how. Make sure your PPC contractor is using some combination of modified broad match, exact match and phrase match only. 4: Confirm They’re Adding Negative Keywords. . #6:

PPC 28

PPC Matching Campaign SEO 28

The Next Web

OCTOBER 3, 2012

So, growing more not only has the effect of adding more weight to the company, but also of diluting each employee’s decision-making stake (feeling of overall responsibility) in the company. Adding a second employee reduces the first employee’s “weight” in the company to 25%.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

Seeing Both Sides

JANUARY 4, 2012

Once things are working well, there is a magnetic power that demands pouring more fuel onto the fire. If the customer acquisition costs (CAC) are proving out to be $1 and the customer's lifetime value (LTV) are $2, why not raise millions of dollars to acquire more customers? Obviously, it's not that easy a decision.

Lean 53

Lean Dilution Revenue Hiring 53

Hunter Walker

SEPTEMBER 5, 2021

No founder should assume their pro rata from insiders is in the bag, let alone a bridge check, only because the cost of being wrong (to the company) is so high. If we’ve got an oversupply of demand, is this the round your firm usually starts stepping back from pro rata?”. If you had opportunity to buy up, would you want to?

Cap Table 94

Cap Table Seed Stage Syndicate Syndication 94

Both Sides of the Table

FEBRUARY 22, 2011

While all of this is true, it’s also true that nothing so perfect ever comes without a cost. Here’s the problem: Let’s say you have 5 VCs (plus angels but let’s ignore that for now) and each one owns 5% so you took 25% dilution to get the round done. And I always encourage entrepreneurs to do reference checking.

Dilution 314

Dilution Cap Table Due Diligence Option Pool 314