Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. So, co-management is the second group to share in the bounty upon a liquidity event. How much equity to early investors? That risk deserves reward if there is a profitable sale or even an initial public offering, rare as that event is.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Berkonomics

APRIL 20, 2023

Here I am a professional investor in early-stage companies, and I attempt to find those with the greatest chance of success and growth in value over time. How about the early-stage investors? You might be interested in this data as viewed from the early-stage investor’s viewpoint. Data does not lie.

SBA 62

SBA Angel Investor Early Stage Liquidity Event 62

Gust

DECEMBER 1, 2011

When meeting with early stage entrepreneurs for the first time, after reviewing a demo or hearing their pitch, I often ask them to articulate what they’re most focused on building. What is a startup really? To add insult to injury, the more spectacularly successful the company, the more costly the mistakes can be.

IP 114

IP Intellectual Property Equity Liquidity Event 114

David Teten

MARCH 14, 2018

VC is a “get rich slow” business, because most VC Partners will not see a carry check for 5-10 years, after waiting for both liquidity events and for LPs to be paid first. I’ve listed a few more below which require meaningful startup and ongoing costs. This requires a real financial sacrifice.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Gust

JUNE 7, 2014

In many, if not most, seed and early stage funding scenarios, the investments are structured in LIFO order: Last In, First Out. Invested Interests company early stage funding investors startup starup'

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Women Entrepreneurs Can

NOVEMBER 19, 2022

A Venture Capital Firm is a firm that invests in startups and early-stage companies. Early-Stage Investments vs. Mid-Stage Investments. Investing in a startup company carries a high degree of risk, particularly at the early stage. However, not all firms are venture capital firms. Pre-Seed Investments.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

Hunter Walker

SEPTEMBER 29, 2022

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). That is, we should be buyers or sellers as a concentrated early stage fund, not trying to say “well, if we were a growth fund what would be do.”.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

Berkonomics

MARCH 9, 2017

Here I am a professional investor in early stage companies, and I attempt to find those with the greatest chance of success and growth in value over time. You might be interested in this data as viewed from the early stage investor’s viewpoint. years before a liquidity event (positive or negative.)

Angel Investor 106

Angel Investor Angel Groups Liquidity Event Early Stage 106

Hunter Walker

MARCH 8, 2014

The Early Team Still There and They’ll Be Your Tribe for Years : The founders and early team are still in place because there hasn’t been a liquidity event and the work is still exciting for them.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134

Berkonomics

MARCH 21, 2019

To grow your business to a size that will be attractive to a VC or angel making an investment now, you’ve got to show that the business will be large enough at the time of the investor’s liquidity event (cashing out) to make the investment attractive at all. The more you ask for – the more equity you give up.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Berkonomics

APRIL 3, 2014

There are three classes of equity investors for early stage businesses that we have not yet considered. VCs often invest no less than $2 million in a single deal, finding it difficult to put less money to work and still spend time on boards and coaching entrepreneurs to a successful liquidity event.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Steve Blank

JUNE 11, 2013

And at this early stage you’ll be giving up a larger percentage of your firm to investors. A seed round can come from friends, family, Kickstarter, angels – and most importantly, early customers. How much do they need to own at a liquidity event? Why small amounts? No startup ever spends less then it raises.

Venture Capital 333

Venture Capital IRR Liquidity Event Business Model 333

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). For those of you who fit that description, nice work.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Berkonomics

NOVEMBER 15, 2018

As I look back over more than fifty years as an entrepreneur, I can think of the financial focus of my three entrepreneurial businesses as a prime driver in my life during the early stage of each. And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money.

Liquidity Event 48

Liquidity Event Early Stage Government Leadership 48

Steve Blank

JULY 19, 2010

They also know that most founding CEO’s don’t scale past the early stage. Where’s My Liquidity Event. They’re betting that the founding CEO can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Steve Blank

JUNE 11, 2013

And at this early stage you’ll be giving up a larger percentage of your firm to investors. A seed round can come from friends, family, Kickstarter, angels – and most importantly, early customers. How much do they need to own at a liquidity event? Why small amounts? No startup ever spends less then it raises.

Venture Capital 225

Venture Capital IRR Liquidity Event Business Model 225

Hunter Walker

NOVEMBER 20, 2013

Additionally, funds such as Foundry Group and Google Ventures have taken their own approaches – the former creating a separate early stage entity , the latter encouraging their seed stage partners to create standalone personal syndicates. 3) The Alternate Liquidity Syndicate.

Syndicate 98

Syndicate Syndication South America Seed Stage 98

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. by Janet Chase, Kaufman Rossin. Why is it important to hire an experienced valuation firm?

Valuation 100

Valuation Stock Options CPA Merger 100

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. I suspect that this seems reasonable if there is basically no due diligence due to the early stage of the companies. (By Legal fees.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Steve Blank

JULY 2, 2009

Of course, they could be useful in creating liquidity events, but absent bubbly environment and disrupting marketplace what is the point? Of course there have been many VC-backed successes because when new markets rise someone is going to win and many companies take the money along the way.

Silicon Valley 120

Silicon Valley Technical Review RSS Software Review 120

Berkonomics

NOVEMBER 12, 2011

As I look back over more than fifty years as an entrepreneur, I can think of the financial focus of my three entrepreneurial businesses as a prime driver in my life during the early stage of each. And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money.

Liquidity Event 86

Liquidity Event Early Stage Government Leadership 86

Berkonomics

AUGUST 29, 2013

The Trados Decision (Delaware Court of Chancery) protects the common and early stage investors even if the late stage investors can claim all from a sale with their liquidation preferences. The liquidity event and beyond'

Delaware 66

Delaware Liquidation Preference Liquidity Event Preferred Stock 66

Berkonomics

JUNE 2, 2010

But how about awarding stock options to all employees? . Tech companies, particularly early stage and startups, still award options aggressively. Tags: Depending upon others Surrounding yourself with talent The liquidity event and beyond.

Liquidity Event 86

Liquidity Event Stock Options IPO Stock 86

Hunter Walker

AUGUST 24, 2014

In retrospect I lost a lot of future gains by cashing out too early but what I gained was more important: peace of mind in removing the only debt I’d ever carried. Did I work any less hard the next day because of my liquidity event?

Founder 108

Founder San Francisco Liquidity Event LP 108

Berkonomics

DECEMBER 19, 2013

If you are an investor in an early stage venture, wouldn’t a dialog using these questions help greatly in defining and perhaps reducing your risk? Liquidity event: Name at least five companies that might be ready to acquire the enterprise if successful. Order all 3 Berkonomics books for $49.95,a a 33% discount.

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

Berkonomics

FEBRUARY 23, 2023

Adjusting these numbers to fit your circumstance, the conclusion is that waiting for higher value after sustained growth becomes more and more of a risk in the majority of early stage cases. What about those unicorns?

Dilution 62

Dilution Valuation Early Stage Equity 62

Startup Professionals Musings

FEBRUARY 3, 2010

On the other hand, an advisory board put together haphazardly can be the biggest mistake for a company in the early stages of business. Most quality advisors know that chances of a liquidity event are rare. A properly built advisory board can be a huge strategic advantage to any company. What is the value of free?

Advisory Board 225

Advisory Board Startup Liquidity Event Stock 225

Up and Running

SEPTEMBER 20, 2021

A convertible note is like a loan, but this amount can be converted into company equity later on, usually during a liquidation event, like the acquisition of the company. For any (early stage) startup, the team is the most critical asset. Convertible notes. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” If the notes contain a “ no prepayment ” clause, which is usually the case, another option might be to wait out the clock and repay the principal and interest upon maturity.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

David Teten

AUGUST 21, 2019

2) To sell their businesses when they want – early, mid term, or never.” . When you raise early stage VC, you can’t sell early because the VCs won’t agree to it. But you also can’t run the company forever, since investors need a liquidity event. Works for early-stage companies.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

A Crowded Space

AUGUST 26, 2013

Consider an early stage company - and assume they have 2 choices, pursue crowd-funding or raise VC money. Equity crowd-funding as a broad asset class is similar to VC in that it seeks to take a stake in early stage startups and hope for big liquidity events down the road. Let’s discuss the quality challenge.

Later Stage 87

Later Stage Liquidity Event Equity Vertical 87

Berkonomics

JULY 23, 2020

The Trados Decision (Delaware Court of Chancery) protects the common and early stage investors even if the late stage investors can claim all from a sale with their liquidation preferences. Can you protect the common shareholders?

Delaware 62

Delaware Liquidation Preference Preferred Stock Early Stage 62

Rob Go

JULY 17, 2014

We’ve often explained to entrepreneurs that the second fund of a venture firm is very much like the series A for an early stage company. For a seed stage venture capital firm, product/market fit comes down to two questions. On performance, we are happy with how things are shaping up in our early NextView I portfolio.

Seed Stage 69

Seed Stage Early Stage Due Diligence Liquidity Event 69

Up and Running

DECEMBER 6, 2010

It’s about early-stage investors getting a return, not about entrepreneurs leaving the company. You could also call it a liquidity event. No, came the answer, we don’t want entrepreneurs who start a business thinking about how they’ll exit. But that’s not what an exit strategy is, I answered.

Exit Strategy 71

Exit Strategy Liquidity Event Early Stage Entrepreneur 71

Seeing Both Sides

SEPTEMBER 15, 2015

These are also questions that will concern late-stage investors who provide the companies the opportunities to scale and, eventually, go public. Israeli entrepreneurs are becoming more focused on getting foreign (mostly American) VC partners in the early stages to help them pursue these opportunities from the onset.

Cofounder 20

Cofounder Technical Review United States 20

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). For you who fit that description, nice work.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Berkonomics

DECEMBER 30, 2021

In my life as an early-stage investor, I’ve been closely involved with so many businesses, there were bound to be numerous stories of actual and near failures, hopefully from which to learn lessons for all of us as we go forward. The emotions we feel when “turning out the lights.”.

Bankruptcy 62

Bankruptcy Early Stage Matching Software 62