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Early-stage Regional Venture Funds–part 2 of 3 of Bigger in Bend

Steve Blank

as a distribution channel have vastly reduced the amount of capital a startup needs at the early stage when the risk is greatest. The reality is that the super vast majority of liquidity events are M&A and the majority of those are in the under $100M range. The cloud , open-source development tools and web 2.0

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What’s your personal-business end game?

Berkonomics

Your distribution channel relationships? Email readers, continue here…] . It will help you to explain the value of your business to potential investors and certainly help focus your efforts as you advance toward that goal of a liquidity event in your future. Would it be your intellectual property?

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Can you list ten buyers for your business?

Berkonomics

Most entrepreneurs and certainly all investors would like to see “a positive liquidity event” (a good sale of the business) someday. Then I guide the group to focus upon column three, ignoring the obvious gain our company would make in liquidity (cash) to shareholders. So, that’s the reason for this insight.

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Why not share your liquidity success with those who got you there?

Berkonomics

So, I wrote into the final distribution instructions a surprise five figure bonus for each of the five executives. Email readers, continue here…] Now, there are three kinds of exits. Each was surprised, pleased and effusive. Upon reflection, I should have given each even more. Consider the kinds of exits.

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List ten companies that could buy your business.

Berkonomics

Would it be more cash for expansion, new intellectual property, better distribution, completion of drug trials, or more? Email readers continue here.] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers. It is in revisiting column two of the chart.

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Finding a strategic partner, investor or buyer

Berkonomics

Email readers, continue here.] Your definition of a great fit might include their distribution capability, their brand, dominance in your field, their sales force, their access to growth capital or more. You can list companies you know, have contacts within, or that fit your industry segment. Examine the four columns in the matrix.

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Everything you do adds or reduces company value

Berkonomics

New products, new geographic territories, elimination of a competitor, increase in revenues, consolidation savings, new talent, new distribution channels, and more are good reasons for a start. Email readers, continue here…] Many companies find acquisitions to be a decision of “make or buy.”