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Why Raising Too Much Money Can Harm Your Startup

Both Sides of the Table

And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. Some people can skip first base My partner Greg Bettinelli has a sports metaphor that I’ve become fond of which is “skipping first base.”

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Cybersecurity startups face market challenges

ReadWriteStart

Consequently, some startups have faced struggles securing investments, resulting in down rounds where their valuations decline between funding rounds. Additionally, these down rounds can decrease employee morale, as they may dilute shares or pay cuts, affecting the overall work environment.

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Need money? Read this!

Berkonomics

However, most often, these funds are solicited by a well-meaning entrepreneur from investors who are not qualified as accredited investors under the law (currently requiring a proved income of $200,000 a year or $1 million in net worth for an individual investor). It is most often a win-win for both you and the strategic partner.

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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

This was an audience of mostly first-time entrepreneurs. It is great for entrepreneurs and great for VCs. So here is what I have been telling entrepreneurs privately for the past 6 months. What a bubble means for each entrepreneur. New investors hate down rounds. I believe that. source: Capital IQ.

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How to Talk About Valuation When a VC Asks

Both Sides of the Table

One of the hardest things about the fund-raising process for entrepreneurs is that you’re trying to raise money from people who have “asymmetric information.” As an entrepreneur it can feel as intimidating as going to buy a car where the dealer knows the price of every make & model of a car and you’re guessing at how much to pay.

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Three Startup Financing Myths You Should Avoid

YoungUpstarts

The real issue here is that if an entrepreneur comes in to a pitch and goes on and on about how they’re going to build a billion dollar company in just a few years, most investors eyes tend to glaze over. Like Jerry Yang who started Yahoo, as investors we are looking for entrepreneurs who are obsessed with a new technology.

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Does your business need money? Read this!

Berkonomics

However, most often, these funds are solicited by a well-meaning entrepreneur from investors who are not qualified as accredited investors under the law (currently requiring a proved income of $200,000 a year or $1 million in net worth for an individual investor). It is most often a win-win for both you and the strategic partner.