Both Sides of the Table

AUGUST 14, 2017

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. ICOs certainly have a place in startup financing.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

ReadWriteStart

JUNE 1, 2020

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. Forms of funding. ? Equity investment. Equity investment is the most popular and most talked-about avenue for startup funding. Equity investors. Sources of Funding.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Start-up | Mondays. How to Incorporate.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Austin Startup

JULY 6, 2018

The below outlines how I would approach the decision: Cash and Equity. Very simply, what are you giving and what are you getting in return in terms of cash and equity for joining the program? Anti-Dilution. See: Startup Accelerator Anti-Dilution Provisions; The Fine Print. Pro-Rata / Future Investment Rights.

Dilution 48

Dilution Startup Technical Review Equity 48

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost. 

Finance 58

Finance Term Sheet Equity Aggregator 58

Up and Running

DECEMBER 9, 2014

Bates: Good morning and welcome to our CEO panel, “How to Fine-Tune Your Small Business Finances From Funding to Growth” which I think is the direction that we would all like to be going. I’m here with some really phenomenal CEOs who are going to talk to us today about small business finances from funding to growth.

Small Business 95

Small Business Finance Forecast Metrics 95

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

Berkonomics

JULY 16, 2020

It may not be equity. Venture or angel-financed companies with plenty of working capital sometimes are immune to this working capital need for some time into their growth, but at some point, it will become clear that the cheapest form of finance is not equity in a growing enterprise. The banks need to be convinced.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. And now I have to explain to team that they’re taking more dilution than they expected if we do a down round.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

This is going to be BIG.

FEBRUARY 27, 2011

This is where your business starts to incur real costs—but it’s also where entrepreneurs don’t like to be short term “sellers” of their equity. They’re hesitant to raise money—selling equity to investors—when things look great.

Dilution 104

Dilution Equity Hiring Partner 104

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity. Login if you already have an account.

Equity 40

Equity Employee Founder Cofounder 40

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog.   That’s because there are not that many issues to negotiate in a simple equity financing.   With Series Seed: ·    Costs should be roughly the same (if not cheaper) than using industry standard debt documents.  SeriesSeed.com. Blog Archives. 09/02/2010.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Austin Startup

FEBRUARY 13, 2019

Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more. Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. I speak from experience.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Both Sides of the Table

JUNE 5, 2015

” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. So how DOES a VC think about financings at early stages? Option pool (likely dilution in the future, which is a function of a higher price just not yet defined). No problem.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Startup Professionals Musings

SEPTEMBER 5, 2016

You don’t have to fight for your equity, and no one can slow you down in decision making. Every startup I know has pivoted at least once, so learning from your mistakes should be a positive experience, rather than a painful error that will cost you credibility. Keep later critical financing needs viable.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

keen.io

FEBRUARY 5, 2013

For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. To begin answering this question, I started on a quest to understand startup financing. From there, I began googling things like “first employee startup equity” and “startup offer negotiation.” Let’s go home.”

Salary 50

Salary Equity Startup San Francisco 50

Both Sides of the Table

SEPTEMBER 29, 2009

This came in part due to the huge influx of money into VC but also because hedge funds and private equity shops with no VC experience wanted part of the action. While the company continues to perform well it has come at a cost. disclosure: I am thankfully no longer on this board). I only had one board with this problem.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

NOVEMBER 4, 2013

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys.

IPO 224

IPO Founder Exit Strategy Investment Bankers 224

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Startup Professionals Musings

SEPTEMBER 30, 2012

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. To briefly recap: 3/12 : Fred Wilson discussed why he dislikes convertible notes and SAFEs, and how priced equity rounds make more sense at the seed level. instrument (for a lack of a better name).

Dilution 54

Dilution Equity Warrant Distribution 54

Startup Professionals Musings

JULY 5, 2011

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys.

Exit Strategy 235

Exit Strategy IPO Investment Bankers Entrepreneur 235

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

APRIL 25, 2011

It’s nearly impossible to get a services company financed by VCs. They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. You’re a small fish. This team is talented. They wanted advice.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. A convertible note is short-term debt that converts into equity.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

This is going to be BIG.

MARCH 16, 2020

Some key existings who didn’t want to see their prior money get lost wouldn’t budge on a dilutive financing, despite the fact that they knew where we were headed. If you are a turnaround, bankruptcy or private equity investor and have questions about the sale process, you can e-mail me at charlie@brooklynbridge.vc.

Bankruptcy 95

Bankruptcy Private Equity Seed Stage Dilution 95

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? What are the main considerations when exploring third-party investments? Take your time.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Early Growth Financial Services

JANUARY 10, 2013

Of utmost concern to many entrepreneurs is how to retain maximum equity in their startups. Whether you’re funded, seeking funding, or still bootstrapping, here are some of the best strategies for avoiding dilution and maintaining maximum equity: 1. Rightly so. Milestone raises.

Equity 38

Equity Dilution Bootstrapping Startup 38

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay. For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. In a startup, dilution happens, and you just need to factor it in.

Equity 56

Equity Employee Vesting Preferred Stock 56

Both Sides of the Table

APRIL 14, 2012

What I want to talk about today is one of the insider baseball discussions of our industry this past week: The odd fact of the $500 million financing round completed just before the company sold for a B. You are either bought for stock or for equity. You just said, “nobody would take 1-2% dilution.” Think about it.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Up and Running

APRIL 18, 2013

Specialty finance structures have been around since the beginning of finance, but in the last several years, as bank lending remained frozen following the financial crisis, alternative financial product offerings have exploded. For example, you don’t have to raise expensive equity to purchase 3 delivery trucks or a CNC machine.

Small Business 89

Small Business Finance Dilution Equity 89

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. 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?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Berkonomics

AUGUST 21, 2013

Venture or angel-financed companies with plenty of working capital sometimes are immune to this need for some time into their growth, but at some point it will become clear that the cheapest form of finance is not equity in a growing enterprise. It is important to calculate the true cost of such money.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61