View from Seed

APRIL 30, 2015

Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. From a company milestones perspective, entrepreneurs who take on venture debt are almost always thinking about raising that next round of capital from other institutions.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. In a world where the economy only heads in one direction (read: 2009-2014) most investors & entrepreneurs forget to pay attention to gross burn.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Startup Professionals Musings

JANUARY 4, 2020

One of the big questions that every entrepreneur struggles with is how much funding they should request from investors in the first round. Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Both Sides of the Table

AUGUST 3, 2010

There is a telltale sign of an inexperienced startup entrepreneur. I can save tons of development time and I think I can buy it for all equity. How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. They get premature merge elation. I understand this.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

SEPTEMBER 17, 2011

I’d say about 80% of the experienced entrepreneurs & VCs I know privately agreed with me. I know it’s much sexier to race around talking about buying up companies than it is tweaking your business operations to accelerate revenue, reduce churn and grow faster. Dilute your cash, equity or both.

Operations 292

Operations CTO Hire Startup Early Stage 292

ReadWriteStart

JANUARY 27, 2011

This partnership speaks to a core philosophy of the program where we encourage entrepreneurs to get as much customer validation as possible before raising too much money, use other people's channels if you can get to them, don't burn too much cash, and all that good fiscal conservative stuff. million in revenue. LetsGiftIt.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Both Sides of the Table

JANUARY 4, 2014

Equity for the future? If you are the person staying how resentful will you become working your arse off for equity that your co-founder who leaves will get value from. He felt the CEO was willing to “sell his soul” for revenue and wanted things to be more pure. We sat down the three of us.

Founder 340

Founder Sacramento Cofounder Technical Review 340

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Who are the major Revenue-Based Investing VCs?

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Austin Startup

FEBRUARY 4, 2019

A finalist in the Social and Culture category , which will pitch at 11 am Saturday, March 9, EnrichHER Funding , based in Atlanta, is fueling the growth of women-led businesses by enabling women founders to secure capital in an affordable and non-dilutive way. Investors of EnrichHER get no equity.

Startup 50

Startup Cofounder Technical Review Equity 50

Both Sides of the Table

OCTOBER 1, 2009

Consumer spending is 70% of the economy and will continue to be stretched – We can look all we want at tech innovation, VC funding cycles and hot M&A deals, but ultimately growth and therefore investment must be underpinned by revenue. We spent our future since the equity was artificial. Consumer spending is where I’m dubious.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

The Startup Magazine

MARCH 30, 2022

Growth financing can also be described as revenue-based financing, which essentially allows you to upfront your annual recurring revenue (ARR) and make it available right now, rather than forcing you to wait weeks or months until your end-of-year earnings are accessible. A quick overview of growth financing.

Finance 136

Finance Dilution Green Revenue 136

Business Plan Blog

OCTOBER 4, 2013

Be sure to leave plenty of equity for investors. Having too many co-founders will only lead to your eventual dilution. With little to no revenue, many early stage entrepreneurs turn to the Co-Founder model to build credibility for their startup when raising seed capital. Don’t make everyone a founder.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

Startup Professionals Musings

SEPTEMBER 5, 2016

In my experience as an advisor to aspiring entrepreneurs, I often encounter the myth that an initial startup requires investors. The media tends to highlight experienced entrepreneurs who succeed with early new venture funding, like Uber’s Garrett Camp , but fail to point out the more common bootstrapping successes.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

David Teten

OCTOBER 1, 2015

I’ve seen a range of options for supporting entrepreneurs, which I can rank from least to most involvement in companies by investors: financier VCs, e.g., Correlation Ventures. Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

ReadWriteStart

SEPTEMBER 10, 2010

During this week's roundtable we discussed an area that deserves a serious look from entrepreneurs: Rural BPO. Today, I invited entrepreneurs to come up with ideas, apply the 1M/1M methodology to it, and come discuss with me at these roundtables. Whether it is credit or equity, funding is very, very tight.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Both Sides of the Table

SEPTEMBER 12, 2010

“Hi [entrepreneur], I hope all is well. I know the firm well and I know the entrepreneur & his business well. Many of the growth equity firms have had outbound dialing programs for years. Growth equity firms typically target profitable businesses that are often not technical in nature. They’re flattered.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Startup Professionals Musings

JULY 8, 2011

Some entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in hopes of getting their foot in the door with an investor. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Entrepreneur 234

Entrepreneur Valuation Early Stage Warrant 234

Austin Startup

FEBRUARY 13, 2019

Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more. Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. I speak from experience.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Both Sides of the Table

SEPTEMBER 29, 2009

But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. They also make M&A activity more difficult and with lower outcomes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Your A round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Startup Professionals Musings

OCTOBER 29, 2013

Some entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in hopes of getting their foot in the door with an investor. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Valuation 258

Valuation Early Stage Warrant Common Stock 258

Austin Startup

NOVEMBER 25, 2018

As I mentioned at the beginning of this series/ebook, over the years I’ve noticed that I tend to frequently share certain Lucky7 posts with entrepreneurs we’ve backed , team members at data.world, or other startup investors I know. So I’m packaging the best of them up for you here in a new series called The Entrepreneur’s Essentials.

Bootstrapping 48

Bootstrapping Austin Equity Cofounder 48

Both Sides of the Table

MARCH 21, 2010

As startup entrepreneurs we all want to work with them because having their name as reference clients makes it so much easier for marketing, PR, selling to other customers, fund raising and even recruiting. They negotiate a “master agreement&# to work with your company with some maybe minimum guarantees in terms of revenue.

Warrant 298

Warrant Dilution Startup Stock Options 298

Startup Professionals Musings

MARCH 7, 2015

One of the big questions that every entrepreneur struggles with is how much funding they should request from investors in the first round. Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Startup Professionals Musings

SEPTEMBER 19, 2012

Some entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in hopes of getting their foot in the door with an investor. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Valuation 236

Valuation Early Stage Warrant Common Stock 236

The Next Web

FEBRUARY 27, 2014

your equity in a hot new patented technology business), the higher the demand (e.g., As an example, a new restaurant may get valued at 3-4x EBITDA (earnings before interest, taxes, depreciation, and amortization) and a hot dot com business with meteoric traffic growth could get valued at 5-10x revenues. Supply and demand.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Both Sides of the Table

APRIL 14, 2012

” In this week’s discussion with entrepreneurs I think the word impending wasn’t used often enough. You are either bought for stock or for equity. You just said, “nobody would take 1-2% dilution.” ” Emphasis placed on both “impending” and removal of “higher.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

David Teten

NOVEMBER 10, 2011

The model seeks to serve as a robust option for entrepreneurs that wish to analyze the operating side of their business, but does not constrict against pivots and technological disruptions. The Income Statement sheet allows you to model expenses and revenues as they occur. Here you will see listed assets, liabilities, and equity.

Balance Sheet 154

Balance Sheet Startup Equity Valuation 154

Startup Professionals Musings

JUNE 9, 2010

Some entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in hopes of getting their foot in the door with an investor. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Valuation 227

Valuation Early Stage Warrant Common Stock 227

Up and Running

DECEMBER 9, 2014

Are you an entrepreneur or small business owner with questions about funding your small business? I’m the CEO of Executive Speaking Success and I’m a long-time entrepreneur. I’ve been an entrepreneur for almost as long as I can remember. One, I’m an entrepreneur or in the startup stage of a business.

Small Business 95

Small Business Finance Forecast Metrics 95

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I give up? How much equity should I grant to early employees? Should I take Angel or VC money?

Equity 40

Equity Employee Dilution Valuation 40

Small Business Force

JANUARY 14, 2016

Equity and percentage ownership has always been a lightning rod for discussion and controversy with startups and entrepreneurs. It is also less understood than it should be, with dilution and control issues being major points of concern. The point of it was that with any kind of equity distribution, dilution will always occur.

Equity 20

Equity Dilution Distribution Valuation 20

Up and Running

APRIL 18, 2013

For example, you don’t have to raise expensive equity to purchase 3 delivery trucks or a CNC machine. Revenue-based finance. RBF is an entrepreneur-friendly loan, where repayments are based on a percentage of monthly revenue. My firm, Lighter Capital is one of the most experienced providers of revenue-based finance.

Small Business 89

Small Business Finance Dilution Equity 89