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Employee options pools, typically created at the point of financings, shouldn’t be treated as haggling over dilution, but rather a strategic resource that will help founders build the best team and, by extension, a more valuable company. What if we split the pain [ie increase pre-money valuation slightly on our end and founders take slightly more dilution off their end]?” As you can see, Weekend VC Twitter gets pretty wild and crazy!!!! MORE
For example, he will explain to you how the liquidation preference works and run spreadsheets, if necessary, to show you how much money you will receive based on different sale scenarios; he will explain to you how the option pool works, including the founders’ significant dilution; and he will discuss what protective provisions are and other tricky legal terms, such as drag-along rights and anti-dilution provisions. MORE
But he dilutes his effectiveness with wordy PowerPoint presentations. I have a good business friend, an experienced manager and teacher with a Harvard MBA, whose deep thinking creativity and intelligence are admired by many. It has become a long running joke between us, as I often remind him that most of us have a very limited attention span and ability to recall important points from a presentation. Note the title and tone of these insights. Short, to the point. MORE
Other companies are great businesses, but are effectively encountering a dilution event. The business will ultimately emerge on the other end in good shape, but everyone will be more diluted as a result. One topic of conversation among VC’s over the last few months is how their portfolios are faring during the Covid pandemic. It occurred to me that the message I’m hearing has been pretty consistent but perhaps non-obvious to those outside of the industry. MORE
Startup Issues anti-dilution provisions controlling stockholders conversion rights derivative claim fiduciary duty inspection rights liquidation preferences minority stockholders oppression proper purpose redemption rights MORE
In reality, too many choices actually dilutes customer interest in your existing market, and makes your job of production, marketing, and support much more complex. MORE
Freedom is one of the most abused and diluted words in the English language. It is not possible to discuss it without first clarifying what exactly we mean by it. Let me offer my definition of freedom as the intersection of three sets: What an individual may want to do. What an individual could conceivably … Continue reading "What Americans Get Wrong About Freedom". MORE
31 
The ground rule is to always dilute risk by diversifying your portfolio. by Mateo Monsalve Molina , Founder and CEO of Loyalty Property Advisors. MORE
I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. During this week's One Million by One Million roundtable, we started with a discussion of our hot-off-the-press news: 1M/1M Announces Partnership With Persistent Systems; CrowdEngineering First Beneficiary. MORE
For those of you that have trouble doing division, not surprisingly, that puts the average dilution right around 20%, which isn''t surprising. Dilution. then you need to take a look at the dilution numbers. Dilution is the price and you''re all pretty much getting the same deal. If you''re oversubscribed, but don''t want to take additional dilution, you can usually move the price up. But what really counts is the dilution. Dilution. MORE
Dilution. million pre-money valuation, which is a $10 million post-money) you get diluted by 25% (2.5m / 10m). But understanding how you’re likely to get diluted over time is a more difficult concept. So here is our crack at explaining the world of dilution to you. If you want a deeper dive I shot some video on calculating ownership and dilution over tim e. This post originally appeared on TechCrunch. MORE
Every startup needs to start their funding search looking for grants, with no equity dilution, as well as contests and foundations. Most aspiring entrepreneurs look to their alma mater, or any university, as a source of classes that can help them, but neglect to think outside the box or take advantage of all the other resources to be found there. MORE
This is called stock dilution control. This allows the entrepreneur more influence in controlling dilution of his or her shares, investment terms and acquisition decisions. 83(b) election founders shares incorporate stock dilution MORE
SEPTEMBER 10, 2018
Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Keep your wits about you to make sure that dilution is done equitably and evenly. I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. You need to find the skills or experience you don’t have in business, technology, or money. MORE
I hate non-dilution rights and if you are an entrepreneur you should, too. I’m not talking about price-based anti-dilution protection that is typical in an angel or VC round. What I’m referring to is a right given to a particular stockholder so that such stockholder’s equity in the company is not diluted by any future issuance of stock — regardless of the price. Startup Issues non-dilution startup MORE
YC shares some interesting data points based on their follow on experience with core KPIs, valuation range and expected dilution. There are many good startup resources out there, and it can be confusing for founders to know which one to pay attention to. Well, here’s a good one for you! Y Combinator ‘s Aaron Harris and Janelle Tam created a great resource for startups – a 70 page guide to raising Series A. Main takeaways: 1. MORE
Although David is talking about taking in outside capital and founder dilution in pursuit of larger business growth and objectives, he is also getting to the same point about entrepreneur type. Business Entrepreneurship Venture Capitalists dilution entrepreneur equity Founders scalingSize of Pie, a.k.a. What Type of Entrepreneur Are You? Mmmm…pie. MORE
We were worried about dilution and thought we had more than enough money to grow. When we went out and raised the first time (four years ago), we hit our fundraising goal. We had additional investor interest and almost closed the round. Instead, our advisor pushed us to keep going and we raised two times that amount. The second time we raised, we took on three times our target. MORE
A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Successful startups seem to follow similar paths to greatness, and unfortunately all too often that path leads them back down the hill much faster than they went up. MORE
But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership. It is legally possible to grant non-dilution via a contractual right. Those additional grants would prevent Exec X from being diluted. MORE
I can also say that there is a similarly fine line between dilution and delusion but this one is easier to draw. So if faced with this situation, my only word of advice for entrepreneurs is that it is important to know that there is a fine line between dilution and delusion. The post The fine line between dilution and delusion appeared first on BeyondVC. MORE
Angels will likely agree to simpler term sheets, better valuations, and less restrictive terms on potential dilution, voting rights, exit options, and executive roles. Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. They argue that the color of the money is the same from either source. MORE
What this investor is seeking is called “permanent, full-ratchet, anti-dilution protection”, and that is neither (a) in line with the market, nor (b) practical. Even if you were willing to give it to him, it is highly, highly unlikely to stand up beyond the next financing round, because there’s no way your next investor is going to take a dilution hit for this first one. MORE
Whether you’re funded, seeking funding, or still bootstrapping, here are some of the best strategies for avoiding dilution and maintaining maximum equity: 1. Doing so will prevent unnecessary dilution and it allows you to get the highest possible value for each round. Of utmost concern to many entrepreneurs is how to retain maximum equity in their startups. Rightly so. It’s a constant balancing act: growing your company without losing control of it. MORE
Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Rose have written plenty on the subject; in fact, while I was editing this piece, David published a new post here at Gust: How does equity dilution work for startups? That’s the concept of what some call mathematical dilution. MORE
Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders. Therefore, to avoid dilution to its existing equity holders, all a company has to do is not hire any more employees who get options, or take any more money from investors. MORE
Jason Mendelson just blogged about a new academic paper that seeks to destroy the myth that venture capitalists use inside rounds to dilute founders by issuing themselves cheap stock. The full paper is here. Dealing with VCs MORE
Non-dilutive grants are a great way to fund your research, provided you’re working on a project that directly benefits the government according to current needs. Many companies pursue non-dilutive government grants because they don’t require giving away ownership in the company. . According to Upcounsel , typical non-dilutive grants include research grants, translational grants, and SBIR/STTR program contracts. Are you pursuing a non-dilutive government grant or contract? MORE
In fact, they may fear team leadership as a burden, or a potential dilution of their ownership. Good entrepreneurs are often diluted in their potential by trying to attack too many new market opportunities or customer requests concurrently. In my work with new startups, I often find people who believe that the terms “ entrepreneur ” and “ inventor ” are interchangeable. Yet I find a big difference between “starting a new business” and “creating a new product.” MORE
First, Felicis Ventures is committing 1% on top of every check the firm writes in non-dilutive capital earmarked for “founder development” in coaching and mental health. I’ve long written about the stigma around entrepreneurship and depression / other “mental health-related issues.” ” I was delighted to see two articles in the last day about others addressing this. MORE
When you do, my 20% becomes 15% and thus my true price for your round is actually higher than it appears when I invested because I already know I’m going to face more dilution for options. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined). Then you’ll willing to take more dilution for them. As I mentioned if you raise $2m on $8m pre-money you take 20% dilution. MORE
With major investors, your equity and return is diluted and delayed. It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. I often recommend a less painful alternative, called the lifestyle entrepreneur approach, where your focus is on making a living and a work-life balance , rather than changing the world. MORE
Bootstrapping helps you to focus on your product in so much as … Continue reading → Financial Planning bootstrapping dilution enterpreneurship entrepreneurs equity fundraise profit margins self-fund small business financial planning startup startup financials vc venture capitalOriginally published in SoCalTech. To self-fund or to raise funds? That’s the big question that many founders ask themselves as they try to get their product and service to market. MORE
“Be careful not to have too many co-founders; it’s the most expensive dilution you’ll ever face.” Twitter Highlights co-founders dilution quora seed seed finance startup startup ideas startups I’m using Twitter as a form of micro-blogging to share interesting blog posts, articles and podcasts relating to entrepreneurship and startups, M&A and legal issues. Below are my five most popular tweets (via bit.ly ) for the past two weeks. MORE
Before you think about diluting your brand offering or price in order to serve everyone and anyone, here are five strategies you can use to attract the right customers. Grow Marketing & Sales brand positioning brand story brand strategy branding content marketing customer acquisition marketing target audience MORE
The company was funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all. No dilution to shareholders or the founders. First, an example of grant-based financing . MORE
Here is the big problem with investors – they dilute the founders’ ownership in the company. Let’s cover some basics: It is impossible to issue stock to investors without existing shareholders (founders, employees and prior investors) being diluted. It is impossible to do a stock for stock business combination without existing shareholders being diluted. But now the diluted shareholders own a smaller piece of a larger pie hopefully. MORE
It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Image via Picpedia Everyone in the business world has heard of the old bestseller by Geoffrey A. Moore titled “ Crossing the Chasm ,” but most entrepreneurs have no idea how it relates to them. MORE
Fear of Dilution. Understand the difference between dilution and economic dilution, which occurs when the value of the business doesn’t change but the number of shares increases. Steve Rowles has been serving the San Diego startup ecosystem for over 20 years. Beginning in 1987, he worked in the garages of the first companies to come out of UC San Diego. MORE
Raise too much and you’re diluting your ownership; raise too little and your company will have trouble gaining traction or making it to the next month. Target between 15-25% dilution per round I typically recommend that founders put more emphasis on the quality of investors (i.e. how can they help your business grow) and how quickly you can close a funding round (so you can get back to work), rather than focusing solely on dilution levels. MORE
And yes, a seed fund may have a tougher time holding on to their ownership down the road, and thus get diluted down. We’ve had multiple companies in our early funds that hit bumps and had to raise flat rounds, which hurts from a dilution standpoint but doesn’t wipe out our position. MORE
The challenge with pre-seed rounds is that pricing will sometimes be pretty dilutive. The downside is that YC is itself quite dilutive, the program itself may not be a great fit, and there are many many companies out of your batch that won’t be one of the anointed winners. So your net dilution may end up worse and you may miss out on working with a really hands-on pre-seed partner early in your company’s life. MORE
Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Keep your wits about you to make sure that dilution is done equitably and evenly. MORE
The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. No good investor would want the founder/CEO of a company to have insufficient ownership by the series A, and every founder I know is sensitive to taking too much dilution. So, if a founder is going to avoid this level of dilution, the question is “which round to skip?”. MORE
Dilution Related Topics Gust
APRIL 9, 2014
Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders. Therefore, to avoid dilution to its existing equity holders, all a company has to do is not hire any more employees who get options, or take any more money from investors.
YoungUpstarts
AUGUST 3, 2019
Non-dilutive grants are a great way to fund your research, provided you’re working on a project that directly benefits the government according to current needs. Many companies pursue non-dilutive government grants because they don’t require giving away ownership in the company. . According to Upcounsel , typical non-dilutive grants include research grants, translational grants, and SBIR/STTR program contracts. Are you pursuing a non-dilutive government grant or contract?
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Startup Professionals Musings
JANUARY 15, 2021
This is called stock dilution control. This allows the entrepreneur more influence in controlling dilution of his or her shares, investment terms and acquisition decisions. 83(b) election founders shares incorporate stock dilution
ithacaVC
OCTOBER 10, 2017
Here is the big problem with investors – they dilute the founders’ ownership in the company. Let’s cover some basics: It is impossible to issue stock to investors without existing shareholders (founders, employees and prior investors) being diluted. It is impossible to do a stock for stock business combination without existing shareholders being diluted. But now the diluted shareholders own a smaller piece of a larger pie hopefully.
The Startup Lawyer
MARCH 1, 2011
I hate non-dilution rights and if you are an entrepreneur you should, too. I’m not talking about price-based anti-dilution protection that is typical in an angel or VC round. What I’m referring to is a right given to a particular stockholder so that such stockholder’s equity in the company is not diluted by any future issuance of stock — regardless of the price. Startup Issues non-dilution startup
ithacaVC
SEPTEMBER 10, 2012
But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership. It is legally possible to grant non-dilution via a contractual right. Those additional grants would prevent Exec X from being diluted.
Gust
OCTOBER 18, 2014
What this investor is seeking is called “permanent, full-ratchet, anti-dilution protection”, and that is neither (a) in line with the market, nor (b) practical. Even if you were willing to give it to him, it is highly, highly unlikely to stand up beyond the next financing round, because there’s no way your next investor is going to take a dilution hit for this first one.
Both Sides of the Table
OCTOBER 14, 2011
Dilution. million pre-money valuation, which is a $10 million post-money) you get diluted by 25% (2.5m / 10m). But understanding how you’re likely to get diluted over time is a more difficult concept. So here is our crack at explaining the world of dilution to you. If you want a deeper dive I shot some video on calculating ownership and dilution over tim e. This post originally appeared on TechCrunch.
ReadWriteStart
JANUARY 27, 2011
I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. During this week's One Million by One Million roundtable, we started with a discussion of our hot-off-the-press news: 1M/1M Announces Partnership With Persistent Systems; CrowdEngineering First Beneficiary.
BeyondVC
FEBRUARY 6, 2007
I can also say that there is a similarly fine line between dilution and delusion but this one is easier to draw. So if faced with this situation, my only word of advice for entrepreneurs is that it is important to know that there is a fine line between dilution and delusion. The post The fine line between dilution and delusion appeared first on BeyondVC.
Scott Edward Walker
APRIL 8, 2013
“Be careful not to have too many co-founders; it’s the most expensive dilution you’ll ever face.” Twitter Highlights co-founders dilution quora seed seed finance startup startup ideas startups I’m using Twitter as a form of micro-blogging to share interesting blog posts, articles and podcasts relating to entrepreneurship and startups, M&A and legal issues. Below are my five most popular tweets (via bit.ly ) for the past two weeks.
OnlyOnce
MARCH 24, 2011
Although David is talking about taking in outside capital and founder dilution in pursuit of larger business growth and objectives, he is also getting to the same point about entrepreneur type. Business Entrepreneurship Venture Capitalists dilution entrepreneur equity Founders scalingSize of Pie, a.k.a. What Type of Entrepreneur Are You? Mmmm…pie.
Scott Edward Walker
AUGUST 31, 2011
For example, he will explain to you how the liquidation preference works and run spreadsheets, if necessary, to show you how much money you will receive based on different sale scenarios; he will explain to you how the option pool works, including the founders’ significant dilution; and he will discuss what protective provisions are and other tricky legal terms, such as drag-along rights and anti-dilution provisions.
Scott Edward Walker
JULY 27, 2011
Startup Issues anti-dilution provisions controlling stockholders conversion rights derivative claim fiduciary duty inspection rights liquidation preferences minority stockholders oppression proper purpose redemption rights
Early Growth Financial Services
MARCH 1, 2013
Bootstrapping helps you to focus on your product in so much as … Continue reading → Financial Planning bootstrapping dilution enterpreneurship entrepreneurs equity fundraise profit margins self-fund small business financial planning startup startup financials vc venture capitalOriginally published in SoCalTech. To self-fund or to raise funds? That’s the big question that many founders ask themselves as they try to get their product and service to market.
Early Growth Financial Services
JANUARY 10, 2013
Whether you’re funded, seeking funding, or still bootstrapping, here are some of the best strategies for avoiding dilution and maintaining maximum equity: 1. Doing so will prevent unnecessary dilution and it allows you to get the highest possible value for each round. Of utmost concern to many entrepreneurs is how to retain maximum equity in their startups. Rightly so. It’s a constant balancing act: growing your company without losing control of it.
Startup Professionals Musings
AUGUST 9, 2020
Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Keep your wits about you to make sure that dilution is done equitably and evenly.
Berkonomics
DECEMBER 31, 2020
The company was funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all. No dilution to shareholders or the founders. First, an example of grant-based financing .
View from Seed
OCTOBER 24, 2019
The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. No good investor would want the founder/CEO of a company to have insufficient ownership by the series A, and every founder I know is sensitive to taking too much dilution. So, if a founder is going to avoid this level of dilution, the question is “which round to skip?”.
View from Seed
JANUARY 13, 2021
And yes, a seed fund may have a tougher time holding on to their ownership down the road, and thus get diluted down. We’ve had multiple companies in our early funds that hit bumps and had to raise flat rounds, which hurts from a dilution standpoint but doesn’t wipe out our position.
YFS Magazine
DECEMBER 7, 2015
Before you think about diluting your brand offering or price in order to serve everyone and anyone, here are five strategies you can use to attract the right customers. Grow Marketing & Sales brand positioning brand story brand strategy branding content marketing customer acquisition marketing target audience
Startup Professionals Musings
JANUARY 6, 2021
In reality, too many choices actually dilutes customer interest in your existing market, and makes your job of production, marketing, and support much more complex.
View from Seed
MAY 2, 2019
The challenge with pre-seed rounds is that pricing will sometimes be pretty dilutive. The downside is that YC is itself quite dilutive, the program itself may not be a great fit, and there are many many companies out of your batch that won’t be one of the anointed winners. So your net dilution may end up worse and you may miss out on working with a really hands-on pre-seed partner early in your company’s life.
Both Sides of the Table
JUNE 5, 2015
When you do, my 20% becomes 15% and thus my true price for your round is actually higher than it appears when I invested because I already know I’m going to face more dilution for options. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined). Then you’ll willing to take more dilution for them. As I mentioned if you raise $2m on $8m pre-money you take 20% dilution.
Startup Professionals Musings
JANUARY 31, 2020
In fact, they may fear team leadership as a burden, or a potential dilution of their ownership. Good entrepreneurs are often diluted in their potential by trying to attack too many new market opportunities or customer requests concurrently. In my work with new startups, I often find people who believe that the terms “ entrepreneur ” and “ inventor ” are interchangeable. Yet I find a big difference between “starting a new business” and “creating a new product.”
Diego Basch
DECEMBER 3, 2019
Freedom is one of the most abused and diluted words in the English language. It is not possible to discuss it without first clarifying what exactly we mean by it. Let me offer my definition of freedom as the intersection of three sets: What an individual may want to do. What an individual could conceivably … Continue reading "What Americans Get Wrong About Freedom".
This is going to be BIG.
OCTOBER 10, 2014
For those of you that have trouble doing division, not surprisingly, that puts the average dilution right around 20%, which isn''t surprising. Dilution. then you need to take a look at the dilution numbers. Dilution is the price and you''re all pretty much getting the same deal. If you''re oversubscribed, but don''t want to take additional dilution, you can usually move the price up. But what really counts is the dilution. Dilution.
Startup Professionals Musings
MAY 30, 2020
Every startup needs to start their funding search looking for grants, with no equity dilution, as well as contests and foundations. Most aspiring entrepreneurs look to their alma mater, or any university, as a source of classes that can help them, but neglect to think outside the box or take advantage of all the other resources to be found there.
YoungUpstarts
NOVEMBER 30, 2020
The ground rule is to always dilute risk by diversifying your portfolio. by Mateo Monsalve Molina , Founder and CEO of Loyalty Property Advisors.
VC Cafe
FEBRUARY 28, 2020
YC shares some interesting data points based on their follow on experience with core KPIs, valuation range and expected dilution. There are many good startup resources out there, and it can be confusing for founders to know which one to pay attention to. Well, here’s a good one for you! Y Combinator ‘s Aaron Harris and Janelle Tam created a great resource for startups – a 70 page guide to raising Series A. Main takeaways: 1.
Startup Professionals Musings
AUGUST 21, 2019
A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Successful startups seem to follow similar paths to greatness, and unfortunately all too often that path leads them back down the hill much faster than they went up.
Business Plan Blog
JANUARY 9, 2014
Fear of Dilution. Understand the difference between dilution and economic dilution, which occurs when the value of the business doesn’t change but the number of shares increases. Steve Rowles has been serving the San Diego startup ecosystem for over 20 years. Beginning in 1987, he worked in the garages of the first companies to come out of UC San Diego.
Startup Professionals Musings
NOVEMBER 6, 2020
With major investors, your equity and return is diluted and delayed. It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. I often recommend a less painful alternative, called the lifestyle entrepreneur approach, where your focus is on making a living and a work-life balance , rather than changing the world.
Berkonomics
MARCH 23, 2017
But he dilutes his effectiveness with wordy PowerPoint presentations. I have a good business friend, an experienced manager and teacher with a Harvard MBA, whose deep thinking creativity and intelligence are admired by many. It has become a long running joke between us, as I often remind him that most of us have a very limited attention span and ability to recall important points from a presentation. Note the title and tone of these insights. Short, to the point.
ithacaVC
JULY 7, 2011
Jason Mendelson just blogged about a new academic paper that seeks to destroy the myth that venture capitalists use inside rounds to dilute founders by issuing themselves cheap stock. The full paper is here. Dealing with VCs
Hunter Walker
AUGUST 7, 2017
Employee options pools, typically created at the point of financings, shouldn’t be treated as haggling over dilution, but rather a strategic resource that will help founders build the best team and, by extension, a more valuable company. What if we split the pain [ie increase pre-money valuation slightly on our end and founders take slightly more dilution off their end]?” As you can see, Weekend VC Twitter gets pretty wild and crazy!!!!
Startup Professionals Musings
SEPTEMBER 10, 2018
Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Keep your wits about you to make sure that dilution is done equitably and evenly. I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. You need to find the skills or experience you don’t have in business, technology, or money.
Startup Professionals Musings
APRIL 27, 2019
It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus of both you and potential customers. Image via Picpedia Everyone in the business world has heard of the old bestseller by Geoffrey A. Moore titled “ Crossing the Chasm ,” but most entrepreneurs have no idea how it relates to them.
The Next Web
JULY 17, 2015
We were worried about dilution and thought we had more than enough money to grow. When we went out and raised the first time (four years ago), we hit our fundraising goal. We had additional investor interest and almost closed the round. Instead, our advisor pushed us to keep going and we raised two times that amount. The second time we raised, we took on three times our target.
Version One Ventures
JANUARY 10, 2013
Raise too much and you’re diluting your ownership; raise too little and your company will have trouble gaining traction or making it to the next month. Target between 15-25% dilution per round I typically recommend that founders put more emphasis on the quality of investors (i.e. how can they help your business grow) and how quickly you can close a funding round (so you can get back to work), rather than focusing solely on dilution levels.
Startup Professionals Musings
JUNE 13, 2020
Angels will likely agree to simpler term sheets, better valuations, and less restrictive terms on potential dilution, voting rights, exit options, and executive roles. Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. They argue that the color of the money is the same from either source.
Feld Thoughts
SEPTEMBER 12, 2018
First, Felicis Ventures is committing 1% on top of every check the firm writes in non-dilutive capital earmarked for “founder development” in coaching and mental health. I’ve long written about the stigma around entrepreneurship and depression / other “mental health-related issues.” ” I was delighted to see two articles in the last day about others addressing this.
View from Seed
JULY 15, 2020
Other companies are great businesses, but are effectively encountering a dilution event. The business will ultimately emerge on the other end in good shape, but everyone will be more diluted as a result. One topic of conversation among VC’s over the last few months is how their portfolios are faring during the Covid pandemic. It occurred to me that the message I’m hearing has been pretty consistent but perhaps non-obvious to those outside of the industry.
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