View from Seed

JANUARY 13, 2021

And yes, a seed fund may have a tougher time holding on to their ownership down the road, and thus get diluted down. We’ve had multiple companies in our early funds that hit bumps and had to raise flat rounds, which hurts from a dilution standpoint but doesn’t wipe out our position. So yes, seed funds will own less. But guess what?

Dilution 399

Dilution Later Stage Portfolio Technical Review 399

Startup Professionals Musings

APRIL 27, 2019

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Technical Review 255

Technical Review Dilution Early Stage Product Development 255

YoungUpstarts

AUGUST 3, 2019

Non-dilutive grants are a great way to fund your research, provided you’re working on a project that directly benefits the government according to current needs. Many companies pursue non-dilutive government grants because they don’t require giving away ownership in the company. . Their cost is $40.86

Dilution 113

Dilution Government SBIR Salary 113

Berkonomics

FEBRUARY 8, 2024

The post What are the costs of taking investor money? A seat on your board? Email readers, continue here…] Almost always, professional investors, including angel groups and venture capitalists, also require at least one seat on the corporate board. first appeared on BERKONOMICS.

Cost 62

Cost Covenant Angel Groups Angel Investor 62

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders. Uncategorized company equity dilution founder investors startup'

Dilution 150

Dilution Equity Vesting Stock Options 150

Startup Professionals Musings

AUGUST 4, 2014

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and venture capital investors are brought in.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Startup Professionals Musings

APRIL 23, 2017

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Customer 191

Customer Entrepreneur Technical Review Dilution 191

Startup Professionals Musings

SEPTEMBER 27, 2023

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 240

Stock .Net Vesting Founder Vesting 240

This is going to be BIG.

JANUARY 18, 2024

Still, there are a lot of downsides to taking venture money—the push to grow at all costs, our desire to be all up in your business, literally, and sometimes, we’re kind of obnoxious. It will save everyone a lot of cost and time. You’re going to suck compared to an alternative player and you’ll undoubtedly cost your team wins.

.Net 88

.Net Cap Table Startup Technical Review 88

ConversionXL

MAY 27, 2014

They dilute the focus of the page if you have different promotional offers on each slide. The post 5 Popular eCommerce Trends That Might Be Costing You Conversions appeared first on ConversionXL. In the same study, it was noticed that they also create banner blindness and are often ignored by people.

eCommerce 125

eCommerce Conversion Software Review Cost 125

Up and Running

NOVEMBER 5, 2018

What will it cost to start that business? Many people underestimate startup costs and start their business in a haphazard, unplanned way. Estimating realistic startup costs is one of the key elements of your financial plan. What are startup costs? And it interferes with the estimates and dilutes their value.

Cost 150

Cost Balance Sheet Startup Intellectual Property 150

Startup Professionals Musings

JANUARY 15, 2021

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.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

SoCal CTO

SEPTEMBER 27, 2011

Suppose further that he's going to cost $60k a year in salary and overhead, x 1.5 = $90k total. The reality is that an early employee in a pre-funded startup that eventually raises a few rounds of capital will be diluted significantly, is down the line in preference, and will likely be locked up for a while to harvest it.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Startup Professionals Musings

DECEMBER 18, 2013

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Entrepreneur 252

Entrepreneur Marketing Technical Review Dilution 252

Startup Professionals Musings

AUGUST 24, 2016

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as Angel and VC investors are brought in. Amount of venture funding provided.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

Startup Professionals Musings

OCTOBER 17, 2022

The cost of entry for tech startups continues to go down. Twenty years ago, it cost several million dollars to launch an e-commerce startup, which can be done today for a few thousand dollars. Mobile and web software apps may cost even less. The large investment amounts preferred by VCs are no longer needed to launch winners.

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

Startup Professionals Musings

FEBRUARY 27, 2023

They have equipment and smart students that would otherwise cost you a fortune through an outside contract. Most universities have a file of patents from project work that they are willing to license to any entrepreneur for business commercialization, with little or no cost up front. Get help with grant funding and incubator resources.

Arizona 276

Arizona Intellectual Property Accredited Investor Entrepreneur 276

Startup Professionals Musings

NOVEMBER 10, 2012

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Startup 254

Startup Technical Review Dilution Early Stage 254

Startup Professionals Musings

JULY 23, 2021

We all strive to reduce costs and improve efficiency, but the ultimate test is the potential to erode values, culture, and brand image. Yet every change can cause brand dilution or competition you don’t need. Attempts to do this have resulted in more confusion than value, as well as high management and marketing costs.

Leadership 426

Leadership Management Brazil Differentiation 426

Startup Professionals Musings

FEBRUARY 14, 2021

My perspective as an angel investor is that once you get past early adopters, most people won’t switch to a new approach unless they perceive a cost or time savings or speed advantage of at least 20 percent. Non-specific terms, like better usability and low cost don’t incite customers to action these days.

Intellectual Property 417

Intellectual Property Angel Investor Dilution Differentiation 417

Startup Professionals Musings

APRIL 12, 2021

In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process. Don’t let your passion and “can-do” attitude convince you that you can overcome all financial realities.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Both Sides of the Table

NOVEMBER 14, 2017

MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. As companies get this initial customer feedback on their product they start to have to ask harder questions about unit economics: How much does it cost us to acquire a new customer? and we were met with weak demand, slow growth and high costs.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

MARCH 19, 2013

It’s Profitable Revenue Covering Your Fixed Costs. Need I point out that the $500,000 is still profitable revenue that can contribute to your central costs of running your business? That it is non-dilutive financing? They are the gateway to your growth. Professional services = upsell + cross sale + new business units.

Technical Review 403

Technical Review Software Review Startup API 403

View from Seed

AUGUST 17, 2021

at exit due to dilution. It creates dilution, and investing in these rounds increases your effective post-money. The cost of being incorrect becomes magnified as one has more than just capital to lose. If the company wasn’t that capital efficient, the fund may end up owning 2.5% in a mid stage round at a $100M post.

IRR 205

IRR Dilution Founder Portfolio 205

Startup Professionals Musings

SEPTEMBER 13, 2011

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

YoungUpstarts

JULY 31, 2019

They need to comply with laws, create back-end processes, and build prototypes — all of which cost money. But “fundraising debt” comes into the picture when you raise too much too early, diluting your business at the beginning of the venture, with no real plan or unrealistic projections for how your business will scale.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

The Startup Magazine

FEBRUARY 2, 2021

Minimizing costs against aggressive timelines is the financial goal of the most successful labs in preclinical academic research. This reduced focus on reaching clinical phase results and low clinical trial success, yields a significantly elevated cost. Critical Components in Academic Research.

Technical Review 118

Technical Review Syria Developer United States 118

Up and Running

JULY 2, 2014

of our company in exchange for the $300K, and my business partner and I each diluted from 50% ownership down to 33.3% ownership and never dilute. When fundraising for a startup, all investors dilute as additional investors join in on the deal. The deal we made with him was he’d get 33.3%

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Startup Professionals Musings

FEBRUARY 13, 2013

But before you conclude that your funding problems are solved with grants, you should consider the direct and indirect costs of grant funding: Grant applications are bureaucratic. Professional help costs money. To the investors, it means less dilution and lower overall risk. Research related tax credits and incentives.

Government 230

Government Equity Cost SBIR 230

Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. Startup Lessons'

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. how to cut redundant costs. - It has awesome features that my main competitor doesn’t have. I can save tons of development time and I think I can buy it for all equity. BUT … it’s your company.

Merger 276

Merger Technical Review Early Stage Dilution 276

View from Seed

AUGUST 17, 2021

at exit due to dilution. It creates dilution, and investing in these rounds increases your effective post-money. The cost of being incorrect becomes magnified as one has more than just capital to lose. If the company wasn’t that capital efficient, the fund may end up owning 2.5% in a mid stage round at a $100M post.

IRR 156

IRR Dilution Founder Portfolio 156

Austin Startup

JULY 6, 2018

Re: cash, the more “unbundled” types of accelerators (less formalized, less equity) tend to not provide any cash upfront, but also typically “cost” less in equity, often just 1–2% of your fully diluted capitalization. Anti-Dilution. See: Startup Accelerator Anti-Dilution Provisions; The Fine Print. Market Focus.

Dilution 48

Dilution Startup Technical Review Equity 48

Startup Professionals Musings

OCTOBER 7, 2022

Here is where projections of cost, pricing, volumes and cash flow are critical. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection. How much do you really need for the next 12 to 18 months? Are you flexible on the terms of the investment?

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

NOVEMBER 8, 2021

Of course, that doesn’t dilute the owner’s equity, but it may well limit you to organic growth, versus international rollouts and acquisition options. Startup funding comes from personal savings and family. There is no free lunch for money. Non-equity funding has to come from personal sources, or government grants, or bank loans.

Entrepreneur 371

Entrepreneur Equity Dilution LLC 371

Up and Running

JULY 1, 2020

Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success. Doing so helped us avoid mistakes that could have cost us substantial time and money. To be honest, the plan showed we had limited opportunities.

Business Plan 152

Business Plan Forecast Operations Dilution 152

Startup Professionals Musings

AUGUST 27, 2010

It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing.

Startup 227

Startup Technical Review Dilution Early Stage 227