Startup Professionals Musings

JANUARY 15, 2021

Make sure the government waits for a stock sale to collect taxes. 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. At that time the original split makes all the difference.

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Vesting Dilution Stock Founder Vesting 298

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. Actively seek out government and local incentives.

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Dilution Incubator Bootstrapping Government 404

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.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

JANUARY 2, 2011

I applaud the initiative, and encourage startups in this direction, but there are costs. A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. Professional help costs money. To the investors, it means less dilution and lower overall risk. Extend your networking.

Government 221

Government SBIR Dilution Database 221

Startup Professionals Musings

JANUARY 26, 2019

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Startup 194

Startup Equity Dilution LLC 194

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

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. Other lender tricks adding to the true cost.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

Startup Professionals Musings

MAY 19, 2014

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. 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.

Seed Money 242

Seed Money SBIR Dilution Government 242

David Teten

OCTOBER 1, 2015

Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. How would one set up such a startup to eventually raise capital from outside VCs, who will be wary of ‘dead equity’ (i.e., equity that belongs to departed cofounders)? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Startup Professionals Musings

OCTOBER 10, 2013

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

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Founder Equity Dilution LLC 231

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. Increasing government regulations. Consider the recent example of Facebook and Mark Zuckerberg.

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IPO Founder Exit Strategy Investment Bankers 224

Startup Professionals Musings

JULY 3, 2015

In reality, this option is a nightmare that can bump you out of the driver seat, dilute your equity and create a business entity you can’t control. Extensive government reporting and compliance rules. Even with private equity and private acquisition transactions, control stays internal to the principals.

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IPO Initial Public Offering Entrepreneur Private Equity 120

Startup Professionals Musings

JANUARY 21, 2017

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Entrepreneur 120

Entrepreneur Equity Dilution LLC 120

Startup Professionals Musings

SEPTEMBER 10, 2012

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Non-equity funding has to come from personal sources, or government grants, or bank loans. Corporate versus personal growth really becomes a lifestyle decision.

Entrepreneur 241

Entrepreneur Equity Dilution LLC 241

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. Increasing government regulations. Consider the recent example of Facebook and Mark Zuckerberg.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

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). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Gust

MAY 11, 2014

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. 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.

Seed Money 164

Seed Money SBIR Dilution Government 164

Startup Professionals Musings

MAY 18, 2015

Make sure the government waits for a stock sale to collect taxes. 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. At that time the original split makes all the difference.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

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. Increasing government regulations.

Exit Strategy 235

Exit Strategy IPO Investment Bankers Entrepreneur 235

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

Up and Running

APRIL 24, 2018

Not only that, but global equity funding to digital health companies reached $3.67 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. billion in 2017 YTD (as of May 22, 2017). It was expected to reach over $9.4

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SBIR Startup Artificial Inteligence Intellectual Property 73

Transformify

FEBRUARY 1, 2019

Adjusting or customizing, later on, is likely to result in excessive costs and if not done timely, it may even result in fines and penalties. Taking this route has one obvious advantage and it is the fact that the entrepreneur remains in control of the business and no equity is acquired by third parties. Equity Funding.

Affiliate 49

Affiliate Equity Valuation SEO 49

Austin Startup

MARCH 7, 2021

Are they running from high prices, high taxes, dysfunctional government, and wildfires? All of the investors, all of the big companies, all of the government groups?—?they In fact, the Houston city government ranks number onein the country in renewable energy use. What’s bringing them here? Count all of the people you know!

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Texas San Antonio Houston Dallas 90

crowdSPRING Blog

AUGUST 7, 2011

Raising the debt ceiling and reducing the budget without additional government stimulus is likely to slow the growth of the overall economy. Cost of capital may increase. This means that the shock to the economy will be diluted and consumers will not feel the impact immediately. State and local government cuts may come quickly.

Small Business 86

Small Business IRR Government United States 86

venturehacks.com

MARCH 21, 2008

They can even add more value than an independent board member because they don’t have to deal with corporate governance. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

www.paulgraham.com

APRIL 28, 2010

Whatkind of anti-dilution protection do they want? At one extreme is the sort of pork-barrel project wherea town gets money from the state government to renovate a vacantbuilding as a "high-tech incubator," as if it were merely lack ofthe right sort of office space that had till now prevented the townfrom becoming a startup hub.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Reid Hoffman

JUNE 8, 2021

The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs. Most boards have an audit committee, a nominating governance committee and a comp committee. A lot of times with creativity, you can do things that don’t cost money.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

abovethecrowd.com

APRIL 20, 2016

In Silicon Valley boardrooms, where “growth at all costs” had been the mantra for many years, people began to imagine a world where the cost of capital could rise dramatically, and profits could come back in vogue. It will also minimize future dilution. Anxiety slowly crept into everyone’s world. Now you make your own decisions.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

maplebutter.com

JANUARY 8, 2013

Outsourcing is something a big company, with a known customer / problem (that has revenue & traction) does to save cost. Government grants – Credit cards / debt. I have a proposal written up including full cost and revenue projections. How important is education when I know I want to be an entrepreneur? Can’t pick just one.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Reid Hoffman

JUNE 8, 2021

The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs. Most boards have an audit committee, a nominating governance committee and a comp committee. A lot of times with creativity, you can do things that don’t cost money.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Seeing Both Sides

OCTOBER 24, 2015

Anything beyond 36 months just doesn't seem credible - and shouldn't even matter that much when you think about the next issue - a start-up's cost of capital. 2) Your cost of capital is too low. Ask an entrepreneur about their cost of capital and you'll likely get a blank stare.

Churn Rate 20

Churn Rate Early Stage Revenue Metrics 20

crowdSPRING Blog

DECEMBER 13, 2018

As we wrote in Brand Health, 6 Important Questions You Should Ask About Your Small Business Brand , Brand health can be measured in numerous ways, including brand reputation, brand awareness, brand equity, brand positioning, and brand delivery. This isn’t an issue you can afford to ignore. Those customer groups differ from each other.

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Marketing Charlotte Naming Design 162