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. But the more important rationale is raised in the following about why employees most often do not have significant outcomes even in fairly positive liquidity events. So subtract a third from 16.7% and we have 11.1%

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

David Teten

MARCH 14, 2018

. – Build out low-cost force multipliers such as scouts , Advisors, Entrepreneurs in Residence, Venture Partners, and so on. Typically these outside resources are paid only on a success basis, so the marginal cost is low. . All of the strategies above have very modest fixed cost. This requires a real financial sacrifice.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Gust

DECEMBER 1, 2011

Nevertheless, choosing to defer basic corporate housekeeping items can be disastrous in some circumstances, as when the failure to spend a few thousand dollars on legal fees to clarify IP ownership and equity arrangements comes back to bite a successful company to the tune of millions of dollars on the eve of a liquidity event.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Startup Professionals Musings

AUGUST 29, 2018

Crowdfunding may look easy, via popular sites like Kickstarter and Indiegogo, but their cost in time, effort, and money by entrepreneurs is daunting. Payoff after a liquidity event is difficult and unpredictable. Challenges in crowdfunding will generate more regulatory costs.

Equity 180

Equity Due Diligence Angel Groups Liquidity Event 180

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Startup Professionals Musings

AUGUST 17, 2014

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Financial projections for investors should always show an annual cost of goods sold and gross margins line, as well as revenue.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Up and Running

SEPTEMBER 19, 2017

That is to say, they’d want to be able to control costs and revenues at a high level. Private equity investments are an important part of many startup business’s plans for accelerating growth or providing founders with a liquidity event. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Berkonomics

JANUARY 5, 2023

If we follow the reasoning of our CEO who proposed the rule, we can drop an additional 30% of the net revenues (after cost of sales) from the acquired company to the bottom line. Facilities may become redundant or oversized after these efforts, allowing for consolidation of facilities as well. Not a bad goal, and certainly not a bad result.

Acquisition 62

Acquisition .Net Retention Sales 62

Startup Professionals Musings

JULY 27, 2018

Business model showing costs, pricing, and margins. Discussion of likely liquidity events and exit strategy. This implies high odds of a scalable business, simply needing an investment to lead to success. Of course, you wouldn’t include this data in your customer product pitch.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

Steve Blank

JUNE 23, 2016

All of Intel’s resources – fabs, manufacturing strategies, and most importantly executive mindset — were geared towards large, expensive x86 processors, not low-cost mobile cores of someone else’s design. Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions).

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Hearpreneur

OCTOBER 29, 2017

With annual healthcare expenditures for conditions that either have an underlying cellular degeneration or damage component, now surpassing $7 trillion globally, Bioquark’s platform makes the company an attractive candidate for high-value strategic transactions and liquidity events for investors. Thanks to Ira S.

Entrepreneur 71

Entrepreneur Social Media Liquidity Event Private Equity 71

Startup Professionals Musings

MAY 28, 2013

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Financial projections for investors should always show an annual cost of goods sold and gross margins line, as well as revenue.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Startup Professionals Musings

DECEMBER 11, 2015

Investors invest in people who take action rather than find the excuses that patents are not defensible, cost money or may be done later. Investors are looking for significant (20 percent or greater) cost reductions, training savings or expense reductions. Investors need a liquidity event to get their money out.

Intellectual Property 120

Intellectual Property Liquidity Event Exit Strategy Angel Investor 120

Steve Blank

JUNE 11, 2013

And what are its costs? How much do they need to own at a liquidity event? How do we attract, keep and grow customers? What are revenue strategy and pricing tactics? Who are the partners? What are the resources and activities needed to make this business happen? Who to take money from? What is an IRR? How long is a fund’s life?

Venture Capital 333

Venture Capital IRR Liquidity Event Business Model 333

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Email readers, continue here…] Most VC’s look for a 10x opportunity – that is – a ten times increase in the valuation from investment to liquidity event.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

View from Seed

MAY 19, 2015

Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership. Taciturnity.

Seed Stage 120

Seed Stage Liquidity Event Cofounder Startup 120

Gust

AUGUST 10, 2014

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Financial projections for investors should always show an annual cost of goods sold and gross margins line, as well as revenue.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Startup Professionals Musings

MAY 18, 2015

Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. 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.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Professionals Musings

AUGUST 13, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. I’ll skip the basics here, and highlight only key elements that investors focus on: Define the problem.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Berkonomics

AUGUST 27, 2020

Well-maintained deal rooms enhance a company’s image with a buyer, quicken the pace of the deal, help maintain secrecy from employees while due diligence is in process, and lower the stress levels of all parties during the process. When to start a data room?

Software Review 62

Software Review Due Diligence Intellectual Property IPO 62

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. Startup investments are extremely risky, primarily because the stock has no value until a future liquidity event, such as an acquisition or public offering.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

FEBRUARY 13, 2016

The business model has to clearly define who is your customer, market penetration expected, how much customers pay versus total costs and the investment required to sustain cash flow. If you don’t plan a liquidity event, you won’t find many investors interested. Who are your competitors, and how do you win?

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Berkonomics

DECEMBER 28, 2017

As you follow these insights from ignition to liquidity event, you’ll detect a continuing theme, emphasizing the need for deep and wide relationships that the CEO and senior staff can call upon for advice and guidance. Forming business relationships at the highest level. Analyzing your commitments of time to business.

Balance Sheet 97

Balance Sheet Liquidity Event Government Restful 97

Steve Blank

JULY 2, 2009

Thanks for sharing the lessons you’ve learned, especially the ones where the cost is measured in years. If you are entrepreneur with a solid business that actually makes money you would know that VC has the highest cost of capital imaginable and would find better options. But I wonder if the success is due to or in spite of VCs.

Silicon Valley 120

Silicon Valley Technical Review RSS Software Review 120

Steve Blank

JUNE 11, 2013

And what are its costs? How much do they need to own at a liquidity event? How do we attract, keep and grow customers? What are revenue strategy and pricing tactics? Who are the partners? What are the resources and activities needed to make this business happen? Who to take money from? What is an IRR? How long is a fund’s life?

Venture Capital 225

Venture Capital IRR Liquidity Event Business Model 225

Startup Professionals Musings

MAY 13, 2011

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. I’ll skip the basics here, and highlight only key elements that investors focus on: Define the problem.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Hunter Walker

AUGUST 24, 2014

Did I work any less hard the next day because of my liquidity event? I conjecture there’s a secondary benefit to managed liquidity for founders: it may help diversify founder populations. The opportunity cost of a startup in forfeited salary and in-the-money equity at larger tech companies can be considerable.

Founder 108

Founder San Francisco Liquidity Event LP 108

Gust

AUGUST 5, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. I’ll skip the basics here, and highlight only key elements that investors focus on: Define the problem.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

BeyondVC

MAY 5, 2005

The panel focused on exits or liquidity events and how VCs thought about them. The clear trend that I am seeing is that companies really have second thoughts about going public these days due to the costs and requirements of Sarbox. I had the opportunity to speak on a panel the other day hosted by Venture Scene New York.

Liquidity Event 60

Liquidity Event Technical Review New York Hosting 60

The Next Web

MARCH 2, 2014

This process included several rounds of financial forecasting to understand the cost of achieving where we wanted the business and brand to be, and whether we could pay for that cost ourselves. This will have a significant impact on the amount business owners could realize on the sale or other liquidity event for the company.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Berkonomics

OCTOBER 2, 2012

From inception to liquidity event, here are provocative, bite-sized, actionable tips to make you more successful at all stages of your business. your cost , $37.50 your cost, $24.95 Covers starting up, raising money, managing your work force, growth, marketing, preparing for your profitable exit, and much more.

Liquidity Event 54

Liquidity Event Web Cost Management 54

Startup Professionals Musings

APRIL 22, 2010

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. I’ll skip the basics here, and highlight only key elements that investors focus on: Define the problem.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Steve Blank

MARCH 18, 2011

The reward for doing so was a liquidity event via an Initial Public Offering. Startups that win in the bubble will be those that get wide adoption (using freemium, viral growth, low costs, etc) and massive distribution (i.e. They taught you about customers, markets and profits. Wide Adoption. Facebook, Android/Apple App store.)

Internet 334

Internet IPO Silicon Valley Agile 334

David Teten

AUGUST 21, 2019

But you also can’t run the company forever, since investors need a liquidity event. Lower processing cost. Much lower cost of capital, if company is highly successful. The cost of VC funding to a unicorn CEO can easily be the equivalent of paying well over 100% annual interest.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Berkonomics

SEPTEMBER 27, 2018

I immediately agreed to come aboard at no cost to clean up the corporation, deferring my investment until that was done. But they occur often enough to watch for and take advantage of if ready to make the run for a liquidity event. My immediate reaction and offer.

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

The Next Web

SEPTEMBER 29, 2013

Investors are always thinking about growth mode because that’s the path to where they want to go – liquidity event. Some metrics that I like to look for are: Lifetime value of a customer, average revenue per buyer, cost of a paying customer, registration rates, etc. How do you do that? Your company will die.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136