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Startup Blog: Take a Stand!

Taffy Williams

It may be around deal structure, testing or design of product, new hires, downsizing or firing, how much to spend on a program or some other issue. The deal terms are ones you as the CEO, entrepreneur, or employee know will cause great stress and even the possible demise of the company.

When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Lower-Than-Market Value. Market Value. Above-Market Value. Additionally, setting a structure and price in advance at above-market value can expedite the negotiation process, especially when it’s with multiple parties.

Agile success generates great feelings

Taffy Williams

The deal structures for the financing may follow the same pattern of making you feel ill or bringing a huge smile. Finding partners and getting deals completed can be a huge energy consuming effort. Markets may relate to your financial stability or potential retirement funds.

Agile 51

How VCs Think About Adding New Partners

Both Sides of the Table

Thus began my marketing campaign. As a firm we start by wanting to attract future partners who have worked at startups before and have developed a competence which might be marketing (Greg) or product and CEO experience (Kara) plus amazing Biz Dev experience (Hamet).

My First Investment

A VC : Venture Capital and Technology

SDC was in the business of distributing programming tools for PC software and wanted to move up market into owning software development tools. They had negotiated a deal to purchase an editor called BRIEF and a version control package whose name escapes me (might have been VCS?) So I negotiated a deal to invest the funds into the company for a revenue share on the sale of both products plus a warrant to buy stock in SDC. That deal taught me a few big lessons.

Notes on the acquisition process

Chris Dixon

Moreover, some public companies insist that you don’t talk to employees until the deal is closed or almost closed. Deal structure: the cap table is an agreement between you and the shareholders that says, in effect: “If we sell the company, this is how we pay out founders, employees, and investors.” Some even go so far as to try to cut side deals with key employees to entice them to abandon the other employees and investors.

Who You Gonna Call? Partnering with Goliath: A Tale of Two Announcements

John O'Farrell

These two headlines sound pretty similar—“Small company partners with giant company to reach a bigger market”—but they led to two very different outcomes. In practice, however, most “David-Goliath” distribution deals turn out like our 2003 HP deal: great PR, but not much else.

Acquisitions Aren't About the Money

Inc Startups

When PopCap was being sold, we spoke to multiple potential acquirers, and in the end were extremely fortunate to get a great deal from a great partner. ” We'd spend countless hours talking with the other company about growth, numbers, and deal structure.

Signaling Pricing Expectations Early in Seed Investment Discussions

Genuine VC

As more transparency to seed-round funding transaction details have emerged, especially with the advent of Angelist and accelerator programs (which both educate and even sometimes set terms & structure for graduating companies), I’ve noticed an increasing number of entrepreneurs signal pricing expectations much earlier in the seed fundraising process. Above market.

The 10 Best Real Estate Schools Compared: Meet the Winner!

Blogtrepreneur | Entrepreneur Blog

According to the United States Department of Labor, the real estate job market is expected to grow more than 14%; a substantially higher percentage than the national job market average. Finance and deal structuring, market analysis, site planning, and project management.

From demo day to dollars!

StartupCFO

With the proliferation of accelerator / incubator funded companies in the market today, hopefully this advice will apply to you as well. If you can agree on a deal with that person you can use that to get people on board. (photo courtesy of Heri at Montreal Tech Watch ).

10 Tips for Startups Raising Money from Angels

VC Cafe

Make sure your model is credible – “the market in China is 3 billion users and we will aim to achieve 1% market penetration in year one&# (yeah, right). Deal structure – I could write a full post just on this, but some aspects that were brought up are the need to agree on a reasonable valuation, what investment vehicles are used (convertible debt vs stock, options and warrants and other non-dilutive mechanisms).

Why Leave A Six Figure Corporate Job For Internet Entrepreneurship?

Entrepreneurs-Journey.com by Yaro Starak

I travelled all over the world wherever business deals were happening, gained tremendous experience and exposure to the Corporate landscape, and learned invaluable life lessons in my career. Stock Market In my Junior year in college, I started day trading and grew a $2,000 pot to over $40,000 thanks to a big one-hit wonder. Outside of that terrible experience when money was most scarce for me, I haven’t gambled much in the market.

How to value your company for sale (Part 2)

A Smart Bear: Startups and Marketing for Geeks

Remember how the buyer has his own way of valuing the deal ? You’re skipping a step — trying to decide if the deal is even plausible — but how can you decide that if all you’re doing is thinking about the other side? Do you prefer Deal B?

Deal Certainty ?The Fallacy of a New Market

Recent Buzzes - VC Experts, Inc.

In the aftermath of the economic crisis that began in mid-2007, much ink has been spilled on the lessons learned by buyers and sellers regarding the pitfalls of deal certainty and the development of new paradigms for both financial and strategic buyers.

Do You Deserve Investment Capital?

Inc Startups

In my last column , we covered the questions you should ask to help determine whether a venture capital or private equity firm is a structural fit for you. I frankly end up holding the deal to a higher standard than I would if I were looking at investing my own money.

Should You Sell Your Business? 7 Things to Consider

Inc Startups

Prior to the process, my business partner and I wrote down the criteria for the deal that we would accept. In the last few weeks of the deal, we were ready to back out because of a change in the deal structure. I went through with the deal, but the timing wasn''t right.

Goldman Sachs / SEC: political witch-hunting is no way to change a market

Fred Destin

Reading the allegations against Goldman Sachs and Fabrice Tourre in the case of structured CDO scandal (aka Abacus), I am reminded of Spitzer and how a General Attorney used a witch-hunt as a political tool, only to be later exposed himself in the company of barely clad ladies.

'Show Me the Money' Tips for Business Sellers

Inc Startups

Often, an experienced broker will take the Confidential Offering Memorandum to the lender in advance of finding a buyer to obtain a preapproval, including an acceptable deal structure. Choosing the right broker will make a big difference in the ultimate success of your business sale.

NDA 7

Knowing When It’s Time To Sell Your Startup

YoungUpstarts

by Christopher Wallace, Vice President of Sales and Marketing for Amsterdam Printing. A volatile stock market and economic recession have since changed much of this thinking. Large market share, limited competition and high barrier to entry. The current market cap is only $1.8

A Summary of Current Trends in Canadian Mergers and Acquisitions - 2011

Recent Buzzes - VC Experts, Inc.

With keen international interest in Canada's resource sector, the return of financial buyers, strategic investors looking to pursue acquisitions as a means of increasing earnings, and the recent uptick in Canadian "mega-deal" activity, there is no better time to discuss the M&A trends unfolding in 2011. HOSTILE DEALS. In 2010, hostile M&A activity hit a three-year high as depressed valuations and economic challenges lengthened the strongest buyer's market in decades.

Nymi

Launching Tech Ventures

Nymi also offers a 3 factor security system - Nymi, heartbeat and AAD, thus making it a safer way to transmit information compared to what is currently available in the market. Propose potential partnerships and deal structures. Business models: B2B2C Given the highly fragmented nature of the market, we realized that Nymi would need to create an integrated business model that places nymi right in between other businesses and the end consumer who would be wearing the device.

Piercing the Corporate Veil of Sweat Equity

grasshopperherder.com

Three Card Monty Corporate Structures. This is my least favorite thing in the world, being offered sweat equity in a corporate structure that is unnecessarily convoluted. If you’re in a complex structure with several multinational entities, that risk is compounded.

Why Selling Your Company is Like Dancing With the Stars

Inc Startups

Selling a middle market business is a complex and demanding dance. While it may look simple, one misstep could easily cost a business owner millions of dollars or scuttle the deal altogether. months) Professional marketing of the company, as well as persuasive negotiation, come next.

Build Your Startup on a Vacant Domain Name

David Teten

That’s why our portfolio company Plated.com decided to structure a lease option – they offered the prior owner a small monthly lease fee for 1 year, with an option to buy at the end of the year. Ari Rabban, CEO of our portfolio company Phone.com , said, “I saw many great business opportunities in the telecom space fail because of marketing. If we find the right partner, we can be flexible in deal structures to best align everyone’s interests.

Build Your Startup on a Vacant Domain Name

David Teten

That’s why our portfolio company Plated.com decided to structure a lease option – they offered the prior owner a small monthly lease fee for 1 year, with an option to buy at the end of the year. Ari Rabban, CEO of our portfolio company Phone.com , said, “I saw many great business opportunities in the telecom space fail because of marketing. If we find the right partner, we can be flexible in deal structures to best align everyone’s interests.

Groupon Tries to Broaden Its Appeal With Self-Serve Deal Tool

Inc Startups

In a move designed to grow the business, Groupon is giving some merchants the power to create their own daily deals. In the hopes of broadening its market, on Monday Groupon is launching its first self-service platform on Grouponworks.com , enabling small businesses to create their own deals.

in search of.the ideal term sheet

Seed Stage Capital

For any large deal, they will convert and be treated like the founders and employees. VCs really need to move to a deal structure that doesn’t burn up so much lawyer time negotiating provisions that are almost never used.

What Entrepreneurs Should do about Price Fixing

Both Sides of the Table

What is their market traction? That is why I tell people not to shop deals too widely. So acknowledge it to yourself and be prepared to deal with it. When I was fund raising for my second company we had agreed a company-wide deal with Salesforce.com to use our product.

Looking for a job in VC

Will Price

Adam Smith famously stated that specialization is a function of market size. The VC market, while not as large as the health care industry, enjoys broad specialization and focus. Later stage firms typically value financial analysis, deal structuring, and deal execution skills. Early stage firms typically value technology and market expertise combined with operating experience.

Include Deal Terms or Not?

Mark Birch

I had a discussion the other night with an entrepreneur about whether to include specific deal terms in the pitch deck or investor meetings. There are seven main points to consider when talking about the structure of the deal: Raise – The amount of capital you are raising.

Startup Blog: 7 Questions You May Get from Potential Investors

Taffy Williams

This can happen based on a great deal with a partner, positive data from proof-of-concept, a major advancement in development, or other such value creating events. If you are dealing with a lead investor, they usually go by the “golden rule; I got the gold I set the rules.&#

Should You Co-Found Your Company With a Software Development Shop (2 of 2)?

David Teten

I’ve been looking for suggestions for an initial deal structure that is appropriate for the theoretical case of a trusted dev shop putting in $100k in market-value of services over a 6 month period in time. That said, I’m not sure of the most appropriate structure.

Cracking The Code: The Bessemer 10 laws of SaaS - Fall 2008.

Cracking the Code

Labels: SaaS , sales and marketing , software. For example, you can provide a solution to automate marketing, but if the customer doesnt know some key best practices for how to effectively market online, then its unlikely that theyll get a lot of value out of a marketing automation solution.

You Think It's About the Money. It's Not About the Money.

Inc Startups

When PopCap was being sold, we spoke to multiple potential acquirers, and in the end were extremely fortunate to get a great deal from a great partner. ” We'd spend countless hours talking with the other company about growth, numbers, and deal structure.