Both Sides of the Table

AUGUST 14, 2017

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. ICOs certainly have a place in startup financing. This is similar to the role that public markets play in helping shape publicly traded companies.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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. That’s why anti-dilution provisions are typically only applicable to the next financing. original post can be found on Quora @ [link] *.

Dilution 137

Dilution Ratchet Equity Finance 137

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Sales & Marketing | Wednesdays. Financing a Small Business. Financing A Small Business. Personal Finance. SALES & MARKETING. Online Marketing. Bringing Innovation to Market. Should You Share Equity with Consultants? But sharing equity can have pitfalls, too.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Marketing and sales are how you reach and sell to your target market. Finance is how you manage your finances, including budgeting, accounting, and bookkeeping. Financing Your Startup.

Technology 147

Technology Venture Capital Finance Startup 147

Austin Startup

JULY 6, 2018

The below outlines how I would approach the decision: Cash and Equity. Very simply, what are you giving and what are you getting in return in terms of cash and equity for joining the program? Anti-Dilution. See: Startup Accelerator Anti-Dilution Provisions; The Fine Print. Market Focus.

Dilution 48

Dilution Startup Technical Review Equity 48

Both Sides of the Table

AUGUST 30, 2010

I have to say that I didn’t take the question to mean that convertible debt had won for the entire market, but either way it’s clear that convertible debt has become an increasing trend. a priced/valued preferred stock financing)?&#. prefer equity to convertible debt): If you’re an early stage investor (e.g.

Equity 319

Equity Early Stage Angel Investor Valuation 319

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. With the enormous changes to our economies and financial markets?—?how how on Earth could the venture capital market stand still? What Has Changed in Financing?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

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.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

www.instigatorblog.com

OCTOBER 23, 2010

Home About Contact My thoughts & lessons learned on startups, entrepreneurship, marketing and other stuff. Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. Those first employees will take 0.5-1%

Equity 41

Equity Employee Startup Vesting 41

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. I also advised Andrew to greatly tighten his product and go-to-market strategy. Safarclick.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Pascal's View

OCTOBER 11, 2013

I first visited the Museum of American Finance a couple of years ago, and it is not only a great space,it is a useful resource for visitors interested in a wide range of current exhibits on current capital markets topics, as well as documents and artifacts related to capital markets, money and banking.

New York 31

New York Technical Review Angel Investor Finance 31

ReadWriteStart

SEPTEMBER 10, 2010

Whether it is in the emerging markets or in the U.S., Whether it is credit or equity, funding is very, very tight. I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though).

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Hunter Walker

JANUARY 2, 2017

This keeps them aligned with their investors since a $250m exit with modest venture financing raised can be wonderful for all parties, but the same transaction can look awful if your last round was $60m on $300m pre! of their market cap making a last gasp effort to not be halved by Amazon over the next 10 years? Apparently so.

Technical Review 115

Technical Review Cap Table Acquisition Startup 115

David Teten

JANUARY 21, 2021

V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020. —– Indie.vc

Equity 78

Equity Revenue Cofounder Colorado 78

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. Me: More dilution? “But lawyers will charge much more for equity.” A down round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

This is going to be BIG.

FEBRUARY 27, 2011

This is where your business starts to incur real costs—but it’s also where entrepreneurs don’t like to be short term “sellers” of their equity. They’re hesitant to raise money—selling equity to investors—when things look great. There’s still a lot of risk left in your company.

Dilution 104

Dilution Equity Hiring Partner 104

ReadWriteStart

OCTOBER 28, 2010

More excerpts from "Do More Faster" Title chapter: " Do More Faster " by David Cohen How should we split the equity? Or, you could try to come up with some formula that uses a bunch of different factors such as experience, market value, contribution to date, and expected contributions in the future. How will decisions get made?

Cofounder 128

Cofounder Founder Equity Dilution 128

ReadWriteStart

SEPTEMBER 9, 2019

Although some founders take venture capital in exchange for equity, that’s not the only way to do it. Here’s his take: Brad Anderson : As someone who’s worked in investment banking and been an early employee at a startup, do you think most founders understand their financing options? Are they happy with the marketing and branding?

Venture Capital 105

Venture Capital Equity SBA Finance 105

Seeing Both Sides

AUGUST 28, 2017

Perhaps, when things settle down a bit more, those companies will even raise series A capital from traditional institutional sources to expand the product features, beef up the operations team more fully and make progress in finding initial product-market fit. Shift of value from equity holders to token holders. But many are.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Perhaps, when things settle down a bit more, those companies will even raise series A capital from traditional institutional sources to expand the product features, beef up the operations team more fully and make progress in finding initial product-market fit. Shift of value from equity holders to token holders. But many are.

Early Stage 20

Early Stage Equity Venture Capital Government 20

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog.   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost.  SeriesSeed.com. Blog Archives. 09/02/2010. Then you win.”

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

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

Haystack

JULY 8, 2018

The private markets have ballooned, and the VC model is based on building a portfolio of companies such that the best ones can be acquired or go public. For employees at early-stage companies… the equity you’ve been granted is likely common stock, just like the founders. ” For brief context, how did we get here?

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

keen.io

FEBRUARY 5, 2013

For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. And if the CEO says, “Salaries will be adjusted to market value soon,” that’s probably a best-case scenario. To begin answering this question, I started on a quest to understand startup financing.

Salary 50

Salary Equity Startup San Francisco 50

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. Why did the VC markets freeze so quickly? Market downturn – We all know that investors move in herds. Short answer – yes. The most obvious reason downturns affect investors is psychology.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

NOVEMBER 4, 2013

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. IPOs in 2008, the market was up to a still trivial 128 in 2012 (compared to 675 in 1996).

IPO 224

IPO Founder Exit Strategy Investment Bankers 224

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Do I understand the royalty replaces the need for equity investors ?

IP 54

IP Intellectual Property Investment Bankers Product 54

Startup Professionals Musings

SEPTEMBER 30, 2012

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. IPOs in 2008, the market was up to a still trivial 159 in 2011. After a record low of 39 U.S.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

Berkonomics

FEBRUARY 21, 2019

First, few startups can use that much money today with all the virtual services available and increasingly inexpensive methods of development, prototyping and marketing. Third (if you’re keeping score), it is not wise to dilute the founder’s ownership greatly in the first round of financing.

Dilution 48

Dilution Retention Valuation Startup 48

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Do I understand the royalty replaces the need for equity investors ?

IP 48

IP Intellectual Property Investment Bankers Product 48

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

The Next Web

FEBRUARY 27, 2014

This is typically in conjunction with an upcoming financing or pending takeover offer. your equity in a hot new patented technology business), the higher the demand (e.g., A competitive commodity business, or a “me too” story , will be less demanded, and hence, will require a lower valuation to close your financing.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Tim Keane

JANUARY 12, 2010

Bottom Up Market Sizing » January 12, 2010. Good investors use the valuation discussions to gauge the business savvy of the management team and to understand their ability to appreciate and deal with economic market forces that set values. Startups and angels: Along the way to success. times at 5 years and 11.39

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Equity Kicker

MAY 14, 2012

Twice in the last week I found myself coaching founders on how to build a financing plan around value creation milestones so I thought I would share what I said here. Given that the valuation of a startup increases when milestones like these are hit it makes sense to build a financing plan based on when they are likely to come in.

Finance 118

Finance Valuation Venture Capital Dilution 118