Berkonomics

JANUARY 25, 2024

Board members or lead investors as coaches If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success. How do you pay a coach?

SBA 62

SBA Warrant Stock Options Vesting 62

David Teten

MARCH 31, 2012

I’m exceptionally excited to announce that I’m now Chairman and lead investor with some other angels in a new company, Spright Governance Inc. The additional revenue earned from taxation on a better-managed state easily allows them to cover such costs. (An aerial view of Parliament House in Singapore. Photo credit: Wikipedia).

Government 154

Government Singapore New York City Non-Compete 154

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. But because founders often have significantly narrower networks than their lead investors (who are repeat players), that is easier said than done.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

ReadWriteStart

JULY 18, 2011

That will come at the cost of another 20 to 25% of the company. Unit economics to look at are comparable companies, the lifetime value of a customer, revenue per active daily user, rough acquisition costs per channel (search engine marketing, Facebook campaigns, pay per install). How many seed investors should you take money from?

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

David Teten

JANUARY 10, 2012

He is an active angel with many successful angel investments including: Rent.com, (purchased by Ebay in 2005 for $415 million), Golfnow.com (purchased by Comcast in June 2008), and Lifelock (lead investors include Bessemer Venture Partners and Kleiner Perkins Caufield & Byers). and Tweetdeck (purchased by Twitter in June 2011).

Technical Review 128

Technical Review Technology North Carolina Switzerland 128

David Teten

SEPTEMBER 5, 2014

Over the past 15 years we’ve built this amazing membership to serve our core clients – leading investors, corporations, consulting firms, and nonprofits. And on the periphery, we like to help our members with some basic resources, at no additional cost. In that way, we see the value from both sides. It varies case-to-case.

New York 114

New York Technical Review Networking Advisory Board 114

crowdSPRING Blog

AUGUST 4, 2010

Lead Investors, Dipshit Companies, and Funding Every Entrepreneur – [link]. Historic Report: Solar Energy Costs Now Lower than Nuclear Energy – [link]. If You Build It, They Won’t Come – [link]. Lessons from working for startups – [link]. Bootstrapped, Profitable & Proud: Github – [link].

Social Media 92

Social Media Small Business Design Media 92

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

Hunter Walker

JANUARY 19, 2023

But three years later, the organization changed into a for-profit , albeit one with capped upside for investors ( 100x cap. The rationale was that the costs of development — talent and especially processing capability — was going to be substantial and OpenAI would need millions and millions of dollars to achieve their technology goals.

Naming 62

Naming Lead Investor Distribution Technology 62

Startup Professionals Musings

AUGUST 29, 2016

You need to convince family and friends, in terms they can relate to, that your idea makes logical business sense, and you have done your homework on real customers, competitors, and costs. Just like professional investors wait for friends and family to go first, friends will wait for you to show “skin in the game.”

Elevator Pitch 151

Elevator Pitch Exit Strategy Angel Investor Equity 151

View from Seed

AUGUST 12, 2015

The game plan is then to show accelerating user growth across a variety of user segments and understandable/declining acquisition costs. At some point, investors may start to change their mind about the market size. Listen to episode #8 of Traction via iTunes or SoundCloud , or get all links and context via this blog post.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

View from Seed

AUGUST 12, 2015

The game plan is then to show accelerating user growth across a variety of user segments and understandable/declining acquisition costs. At some point, investors may start to change their mind about the market size. Listen to episode #8 of Traction via iTunes or SoundCloud , or get all links and context via this blog post.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

Hippoland

JANUARY 4, 2017

Lawyers can charge as much as $10k-$30k (in the US) to draft and execute the legal docs for an equity round, and traditionally, founders are responsible for paying for this as well as investors’ legal costs! That lead investor will also usually help you fill out the remainder of your round with other investors.

Convertible Security 48

Convertible Security Equity Security Silicon Valley 48

Berkonomics

DECEMBER 7, 2017

If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success. Email readers, continue here…] How do you pay a coach?

Warrant 97

Warrant Stock Options Vesting Equity 97

BeyondVC

SEPTEMBER 13, 2006

When you closed your first round of funding years ago, the lead investor did his diligence and found out that the technical co-founder’s existing employer may have a right or may even own the startup’s technology. I can pretty much guarantee you that it will cost you to make this happen.

Technical Review 60

Technical Review Intellectual Property Cofounder Due Diligence 60

The Equity Kicker

DECEMBER 3, 2012

Too often the finance lens leads investors to jump on bandwagons and invest in sectors which are hot and where companies look like they will be able to pull in hot money at big valuations and get premium exits, even when the underlying product proposition isn’t very strong. At the highest level I think Chris is right.

Finance 116

Finance Valuation Lead Investor Startup 116

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Berkonomics

FEBRUARY 13, 2014

Back when we were all trying to figure out the real value of traffic on the web, we investors – and acquiring companies – got a bit crazy with metrics used to value acquisitions and investments. I am an investor and advisor to one such company.

Metrics 83

Metrics Revenue Advertising Internet 83

Startup Lessons Learned

JUNE 9, 2020

That meant of course initially raising money and cutting costs. We have to manage our stakeholders, raise money, diversify our business, and cut costs." Every single meeting I had I started with, we're here today because we have to manage the stakeholders, we have to raise money, we have to diversify our business and cut costs.

Silicon Valley 60

Silicon Valley Hosting Cofounder Employee 60

Business Plan Blog

DECEMBER 26, 2013

The individual is likely to be the lead investor in the venture and may join the Board of Directors. This process may include the provision of various scenarios on revenues and costs as the investors validate forecasts initially presented. Professional fees and costs. Rights and restrictions of shareholders.

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

ReadWriteStart

MAY 9, 2018

The company’s growth is largely thanks to its collaborators – Travelport, its first investor and incubator, lead investor 7 Gate Ventures, and Real Venture. Recent funding is being used to develop its product using predictive booking pattern algorithms and to expand its sales and development teams.

Widget 64

Widget France Canada Aggregator 64

leananalyticsbook.com

AUGUST 19, 2012

Peter Yared did a great job explaining this in a recent post on “Little Data” Infrastructure KPIs (cost of running the site; uptime; etc.) Marketers optimizing campaigns to generate traffic and leads. Investors , when we’re trying to raise money. Second: what stage are you at? What makes a good metric?

Metrics 58

Metrics Clickthrough Lean Analytics 58

Both Sides of the Table

JUNE 5, 2015

In most deals with convertible notes or value-added co-investors who “want into the round” the negotiation re-opens after the term sheet and this is a source of frustration at a point where the founder & the lead investor should be feeling great about each other. For me it’s clear.

Pre-Money Valuation 150

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

Duct Tape Marketing

FEBRUARY 20, 2014

If you’re asking for dollars and you have no traction, what you’re really saying is you want investors to gamble on your experiments. Not Knowing Your Cost Of Customer Acquisition. Knowing how much it costs to acquire a customer is debatably the most important variable in an investor’s equation. Having a Weak Team.

Kansas City 70

Kansas City Due Diligence Arizona Kansas 70

Austin Startup

MARCH 4, 2019

Steve Kelly, Lead Investor; Godfrey Nazareth, President & CEO; and Matthew Maltese PhD, co-founder and Chief Innovation Officer The Forrest Four-Cast: March 3, 2019 Fifty diverse startups will aim to impress a panel of judges and a live audience with their skills, creativity and innovation at SXSW Pitch Presented by Cyndx.

Startup 79

Startup Philadelphia Cofounder Distribution 79

www.seriesseed.com

DECEMBER 9, 2012

  With Series Seed: ·    Costs should be roughly the same (if not cheaper) than using industry standard debt documents.  In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost.    This is EXACTLY why I created the Series Seed Documents. 

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Both Sides of the Table

AUGUST 1, 2010

Having talked with our investors (known as LPs) I know that they feel that if we have a seed program we need to be willing to have C Deals – meaning that they want to be sure that we’re not committing to millions of investment in a company just because we seed funded them. So let me assume 1-2 out of every 10 become C deals.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

The Equity Kicker

AUGUST 24, 2012

This comes on top of a lot of other negative news, including leading investors selling shares in the companies above at minimal profits, and CalPERS, traditionally one of the largest investors in venture capital, announcing that they have made a terrible 0.0 per cent return on venture over the last ten years. Here’s why.

IPO 101

IPO Valuation Silicon Valley Venture Capital 101

Babbling VC

DECEMBER 5, 2010

This cost me money! Running around Europe trying to find lead investors for these businesses was priority number 1. I never received that contract and the signature on it. This guy totally screwed me and in hindsight clearly never had authority to promise me what I stupidly accepted on his word. A lot of it!

Technical Review 76

Technical Review Europe Portfolio Germany 76

David Teten

SEPTEMBER 6, 2015

Some corporate funds now lead rounds. Others follow independent financial lead investors and most require that independent investors be part of the syndicate. Teten: What makes for a good vs. bad corporate venture investor? They are making substantial exits and are not just cost centers.

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

Gust

DECEMBER 27, 2012

This is the case for two reasons: first, because the bare fact is that investors simply do not fund ideas. The expectation is that in an era of increasing technology and decreasing costs, you will be bringing them an operating company with at least some traction. Your goal in all this is to try to find a lead investor.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

Austin Startup

OCTOBER 13, 2010

StoredIQ , a leading provider of Intelligent Information Management solutions for eDiscovery, records and compliance management, today announced that it has closed $10 million in new investment financing and expanded its management team in preparation for accelerated growth.

Vertical 59

Vertical Early Stage Cofounder Channel 59

Berkonomics

JULY 3, 2010

If you are lucky enough to create competition among investors for your company, you can select the investor or group with an individual who has experience in your niche and identifies with your vision. How do you pay a coach?

Warrant 71

Warrant Stock Options Vesting Equity 71

Reid Hoffman

JANUARY 26, 2021

This is one of the reasons why the best practice for a startup is to raise investment rounds from different lead investors rather than simply doing internal rounds, even if an internal round requires less work. One of the things a financing round brings is an opportunity to strengthen the startup’s overall network.

Startup 36

Startup Equity Early Stage Green 36

Both Sides of the Table

DECEMBER 18, 2009

The agreement was that both sets of investors would fund the combined entity, we would reduce overlapped costs and become a healthier company. The deal terms were agreed, the combined business plans were prepared and both sets of investors had verbally agreed to do the deal. In the morning I flew home.

Germany 298

Germany Entrepreneur Merger Los Angeles 298

reidhoffman.org

NOVEMBER 12, 2013

Even though we glossed over those slides, investors knew they could come back to those slides later and dig into them if necessary. By this point in the presentation, our goal was to lead investors to believe: A network-empowered people search application could be really valuable.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111