The Next Web

NOVEMBER 20, 2013

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. So, a fair split, would be closer to 60/40 in favor of the funding founder, when diluted for the cash. To me, that is no different than financing the business.

Cofounder 136

Cofounder Equity Founder Seed Stage 136

YoungUpstarts

SEPTEMBER 23, 2017

If you are having any issues with cash flow, you always have the option of opting for alternate business finance. Raising capital when you’re running out of cash, is always easier said than done, as seldom does the investor feel positive about your management capabilities or the potential of your firm. Plan, Plan and Plan.

Cofounder 124

Cofounder Sweat Equity Equity Dilution 124

View from Seed

DECEMBER 4, 2019

Over the last 10 years, we’ve been in a bull market with considerable froth in late stage financing activity and valuations. Most LPs are trying to manage some targeted asset allocation. And over time, if VC is performing well, the LP may actively manage up their allocation to venture. LP Constraints.

LP 256

LP IRR Distribution Portfolio 256

Startup Professionals Musings

OCTOBER 9, 2021

A popular myth these days is that finishing college only dilutes your entrepreneurial instincts, and the best of the best, including Bill Gates, Steve Jobs and Mark Zuckerberg, dropped out early to hasten their success. I agree with Robert E. Practical business courses are better than an advanced degree or MBA. Get real experience early.

Entrepreneur 373

Entrepreneur Chad Incubator Dilution 373

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. According to John Borchers, Co-founder, Decathlon is the largest revenue-based financing investor in the US.

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

NOVEMBER 14, 2017

This financial leader could well have come through the finance org at another startup or at a larger company but they often also can come from strategy consulting (Bain, BCG or McKinsey) or through investment banking (Goldman Sachs, Morgan Stanley, etc.).

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

MARCH 21, 2013

PS Business Cannot Become a Management Distraction. Another rule I outline with our portfolio companies who sell enterprise solutions is that I don’t want them to become a distraction for management. Everything needs to be part of a holistic company strategy. Control Size of PS Revenue Relative to Software Business.

Software Review 321

Software Review Software IP Technical Review 321

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. 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.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. This might happen because to meet all investors needs they end up selling too much of the company, taking too much dilution and feeling beat up. Thus begins the dance. Aren’t they getting screwed?

Technical Review 336

Technical Review Later Stage Early Stage LP 336

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Finance is how you manage your finances, including budgeting, accounting, and bookkeeping. Financing Your Startup. The most common types of financing are debt financing, equity financing, and venture capital.

Technology 138

Technology Venture Capital Finance Startup 138

David Teten

JANUARY 19, 2021

As two fund managers employing Flexible VC, we think it is a healthy addition to the ecosystem and will yield more predictable and stable healthy returns for investors. Too often, investment structures force the management team to make decisions between misaligned growth and investment (return) objectives. Early liquidity.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Berkonomics

AUGUST 10, 2023

The last money has the first say – in valuation and in sometimes forcing draconian terms that require prior investors to contribute a proportional new investment to retain a semblance of their original rights and avoid dilution or worse yet, involuntary conversion to a lower class of stock. Draconian terms? That’s just the facts.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

Austin Startup

JULY 6, 2018

Re: cash, the more “unbundled” types of accelerators (less formalized, less equity) tend to not provide any cash upfront, but also typically “cost” less in equity, often just 1–2% of your fully diluted capitalization. Anti-Dilution. See: Startup Accelerator Anti-Dilution Provisions; The Fine Print.

Dilution 48

Dilution Startup Technical Review Equity 48

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

Both Sides of the Table

FEBRUARY 19, 2019

While the management of a startup company deals with the day-to-day decision-making within the company (strategy, budgets, goals, tasks, compensation) ultimately the Board of Directors has the legal governing responsibilities for these things. In many cases management teams confuse the roles and responsibilities.

Startup 204

Startup Dilution Government Stock Options 204

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. Actually, I got many questions.

Dilution 53

Dilution Employee Cap Table Stock 53

ReadWriteStart

JUNE 1, 2020

Under this category, you have the angel investors who would invest their own money and Venture Capital or VC firms, who manage funds aimed towards specific startup sectors and stages. If you are facing any problem you can always check out this: Business Loan vs. Equity Financing. The third source of funding is from equity investors.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Feld Thoughts

MARCH 24, 2017

Foundry Group is best known for our investments in startups, but our vehicle currently investing in other venture funds, Foundry Group Next, is off to what we believe to be a great start and I wanted to share an update about it by talking about our new investment in a fund managed by Founder Collective. It starts with the people.

Founder 75

Founder LP Technical Review Seed Stage 75

View from Seed

JULY 15, 2020

VC’s also manage multiple funds that get deployed over 10+ years, with new investments happening over the first 2-3 years of a fund’s life. Many of these companies are probably valued at their last financing round, which probably occurred in a very frothy funding environment. Vintage year differences.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Genuine VC

JULY 19, 2010

However, the drawbacks to angel investors are clear – given the lack of professional approach and limited capital capacity, these individuals are frequently less willing to lead rounds and require numerous investors for an entrepreneur to build a sizeable round (and manage subsequently).

Seed Stage 175

Seed Stage Technical Review Dilution Offshore 175

ReadWriteStart

SEPTEMBER 10, 2010

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). In 1M/1M, our preferred financing strategy is customers. You can get cash without diluting your ownership in the company.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

YoungUpstarts

JUNE 13, 2011

Too much growth too quickly can create financial, quality, and reputational risks that if not properly managed can lead to the demise of the business. They end up trying to do too much for too many, which dilutes their focus and often the quality of their product or service. Managing cash flow. Growth is like Mother Nature.

Indianapolis 219

Indianapolis Minneapolis Kentucky Virginia 219

This is going to be BIG.

FEBRUARY 27, 2011

Despite advances in cloud infrastructure, many businesses still have fleshy parts—soft underbellies where a human hand is required to keep quality control, stuff something into a box, order inventory, hire enough engineers to keep the site going or manage cash. Scale brings complexity.

Dilution 104

Dilution Equity Hiring Partner 104

www.avc.com

SEPTEMBER 22, 2011

This "best value" can be the valuation on the last round of financing. Whatever approach you use, it should be the value of your company that you would sell or finance your business at right now. The other important data point is the number of fully diluted shares. Or it can be a public market comp analysis.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. So how DOES a VC think about financings at early stages? It’s very simple. Size of my check. No problem.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Startup Professionals Musings

OCTOBER 28, 2018

A popular myth these days is that finishing college only dilutes your entrepreneurial instincts, and the best of the best, including Bill Gates, Steve Jobs and Mark Zuckerberg, dropped out early to hasten their success. I agree with Robert E. Practical business courses are better than an advanced degree or MBA. Get real experience early.

Chad 242

Chad Incubator Startup Dilution 242

The Startup Magazine

JULY 25, 2021

But existing shareholders are not happy with the company’s proposed plan to issue $500 million in new shares as it would only dilute its current float. You should focus on making your startup irresistible to investors without opting for a dilutive capital raise. Owning a business involves more than managing daily operations.

Valuation 162

Valuation Artificial Inteligence Dilution Marketing 162

Berkonomics

JULY 16, 2020

Venture or angel-financed companies with plenty of working capital sometimes are immune to this working capital need for some time into their growth, but at some point, it will become clear that the cheapest form of finance is not equity in a growing enterprise. Back to loans costing less than dilution of equity.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Leadership & Managing | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. LEADERSHIP & MANAGING. LEADERSHIP & MANAGING. Managing Creativity. Durkin , managing partner with the Boston -based law firm Lucash, Gesmer & Updegrove LLP.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Both Sides of the Table

SEPTEMBER 29, 2009

The other investors around the table didn’t agree nor did the “independent” board members who were willing to turn a blind eye to capital inefficiency since they didn’t have any economic interests that would be diluted by continued fund raising to support a capitally inefficient management team. The deal was done in late 2007.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Hunter Walker

AUGUST 8, 2023

I’m not crying for them – it’s their fault and they’re getting paid hefty management fees even if they’re mediocre investors – but greed and/or competitive pressure (plus an influx of new LPs) caused many VCs to have fund sizes which outpaced their capacity to deploy prudently and their existing strategies.

Portfolio 99

Portfolio Cap Table LP Valuation 99

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

Seeing Both Sides

AUGUST 28, 2017

But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens? Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens? Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

ReadWriteStart

APRIL 4, 2023

Too many lenders to keep track of makes it hard to manage the various people who have a stake in your venture and their different expectations. Lorien Strydom , Executive Country Manager, Financer.com No, Beware the Double-Edged Sword Crowdfunding is a double-edged sword because of its public nature. However, they are time-consuming.

Startup 141

Startup Campaign Cofounder Venture Capital 141

ReadWriteStart

OCTOBER 28, 2010

Do More Faster: TechStars Lessons to Accelerate Your Startup is the new book by David Cohen , founder and CEO of TechStars, and Brad Feld , managing director of Foundry Group. Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Raise angel funding?

Cofounder 128

Cofounder Founder Equity Dilution 128

Startup Professionals Musings

NOVEMBER 15, 2014

A popular myth these days is that finishing college only dilutes your entrepreneurial instincts, and the best of the best, including Bill Gates, Steve Jobs and Mark Zuckerberg, dropped out early to hasten their success. I agree with Robert E. Practical business courses are better than an advanced degree or MBA. Get real experience early.

Chad 279

Chad Incubator Dilution LLC 279