6 Keys To Managing Funding From People Close To You

Startup Professionals Musings

That means writing down and signing the terms of the agreement, after making sure everyone understands them. Tie payments to your product or service revenue.

The Good The Bad And The Ugly Of Funding From Friends

Startup Professionals Musings

That means writing down and signing the terms of the agreement, after making sure everyone understands them. Tie payments to your product or service revenue. New money from professional investors sees no value in old money, so the equity of early investors is “crammed down” and often lost in the scale-up surge.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

How To Take Money From Friends And Still Be Friends

Startup Professionals Musings

That means writing down and signing the terms of the agreement, after making sure everyone understands them. Tie payments to your product or service revenue. New money from professional investors sees lesser value in old money, so the equity of early investors is “crammed down” and often lost in the scale-up surge.

Founders Finding Funding From Friends May Be Fools

Startup Professionals Musings

That means writing down and signing the terms of the agreement, after making sure everyone understands them. Tie payments to your product or service revenue. New money from professional investors sees lesser value in old money, so the equity of early investors is “crammed down” and often lost in the scale-up surge.

5 Ways to Make Your Startup a Choice Investment

Startup Professionals Musings

The single most important ingredient of success is not the idea, but having a team in place that has impeccable integrity, can iterate the product quickly, pivot the business model as necessary, and keep costs down in the process. This requires a visible focus on the company’s revenue model, the costs to get there, and cash on hand. No VC or Angel investors I know are interested in a bunch of angry, crammed-down small investors as co-shareholders.

Lean Startups aren't Cheap Startups

Steve Blank

The Price of Mistakes are Inversely Proportional to Available Capital In times of abundant venture capital if you miss your revenue plan, additional funding from your investors is usually available to cover your mistakes – i.e. you get “do-overs” or iterations without onerous penalties (assuming your investors still believe in the technology and vision.) The test is: If you add one more sales person or spend more marketing dollars, does your sales revenue go up by more than your expenses?

Lean 233

Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

With this capital, the company propels itself to $50 million+ in revenues, and to either a sale to a strategic acquirer or to an initial public offering. This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits.

Are Investors Being Unreasonable? - Startups and angels: Along the.

Tim Keane

"  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur.  up to $10MM in revenue.  up to $10MM in revenue.  Startups and angels: Along the way to success.

Does raising money mean you should start scaling?

The Next Web

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. Sometimes you’ll see that the lifetime value of your customers has gone way down because now you’re doing volume you’ve harvested all your ‘ideal’ early adopters. With the lower evaluation, all the initial investors and the founders will be crammed down and lose a good portion of their equity.