Berkonomics

AUGUST 17, 2023

A personal story as an investor … [Email readers, continue here…] My very first investment as a professional angel was in a small startup where the entrepreneur’s vision fueled my imagination in the audio market niche where I had run a business in an earlier life.

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Liquidity Event Stock Options Stock Audio 118

Berkonomics

AUGUST 6, 2020

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. Your distribution channel relationships? Focus your decisions and resources to build value.

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Liquidity Event Intellectual Property IPO Equity 62

Berkonomics

JANUARY 5, 2023

Email readers, continue here…] Here are some of the checklist items your acquirer will consider. If you are experiencing 20% annual growth and 20% net profit before depreciation and tax, or any combination that adds to 40% (such as 10% profit and 30% growth), you are a prime target.

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Acquisition .Net Retention Sales 62

Berkonomics

APRIL 20, 2023

Even more credible statistics [Email readers, continue here…] John Chambers, former CEO of Cisco, stated that “More than one-third of businesses today will not survive the next ten years.” years before a liquidity event (positive or negative.) What does THAT mean? And this includes all businesses, not just startups.

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SBA Angel Investor Early Stage Liquidity Event 62

Berkonomics

FEBRUARY 23, 2017

Email readers, continue here…] But this question begs for a positive answer. If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? How would you like to see your finish line? Or do you plan to pass control to the next generation if appropriate?

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Liquidity Event Valuation Email Management 102

Berkonomics

FEBRUARY 3, 2022

First, the implied promise: Taking money from professional investors such as angels or VCs usually requires that you agree to seek an exit for those investors in your plan, often targeting five to seven years as the ideal period for growth before a liquidity event. What if you later decide to just keep control?

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Liquidity Event Preferred Stock Dividend Equity 62

Berkonomics

JUNE 12, 2014

Email readers, continue here.] So co-management is the second group to share in the bounty upon a liquidity event. That risk deserves reward if there is a profitable sale or even an initial public offering, rare as that event is. It is the old story of “100% of nothing is worth far less than 10% of a large number.”.

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Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Berkonomics

SEPTEMBER 20, 2018

Most entrepreneurs and certainly all investors would like to see “a positive liquidity event” (a good sale of the business) someday. Not only will group focus upon the possibility of a liquidity event, it will begin to focus upon a number of possible buyers. So, that’s the reason for this insight.

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Liquidity Event Intellectual Property Naming Acquisition 48

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

Email readers, continue here…] I found one of my joys in angel investing, putting money to work by investing time and money into promising young entrepreneurs much like I once was, coaching them, putting them together with others who have needed skills, helping to build someone else’s dream. The rewards of angel investing.

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Liquidity Event Early Stage Government Leadership 48

Berkonomics

OCTOBER 28, 2021

Email readers, continue here…] If you attempt to create a manufacturing business where the serviceable obtainable market for your products is only $30 million, even success leading to a dominant share of the market would not allow your company to scale it to a size of great interest to investors.

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Liquidity Event .Net Differentiation Entrepreneur 62

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.

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Hockey Stick Liquidity Event Valuation Balance Sheet 63

Berkonomics

AUGUST 27, 2020

Email readers, continue here…] But maintaining such an electronic or physical facility is time-consuming and costly. When to start a data room? The question is whether to start this exhausting process early in the life of a corporation, or rush to complete it when a deal is identified or the run to a sale is imminent.

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Software Review Due Diligence Intellectual Property IPO 62

Berkonomics

JUNE 15, 2017

Email readers, continue here…] There are also clauses in many such investor documents that allow the investor to override the founder and force a sale of the company if a proposed sale is attractive to an investor for liquidity, even if the founder feels that there is much more potential if the business is not sold at the present time.

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Liquidity Event Initial Public Offering Dividend Valuation 97

Berkonomics

SEPTEMBER 19, 2013

Email readers, continue here.] The liquidity event and beyond' Questions to be asked include: “What were the major factors contributing to the failure?” “How How quickly did you and your team change the plan when faced with the first signs?” “Did Did you seek outside guidance?”.

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Liquidity Event Angel Investor Email Entrepreneur 81

Berkonomics

DECEMBER 28, 2017

As you follow these insights from ignition to liquidity event, you’ll detect a continuing theme, emphasizing the need for deep and wide relationships that the CEO and senior staff can call upon for advice and guidance. Forming business relationships at the highest level.

Balance Sheet 97

Balance Sheet Liquidity Event Government Restful 97

Berkonomics

MARCH 9, 2017

Email readers, continue here…] The Small Business Administration (SBA) claims that 66% of new businesses survive their first two years (and that 50% fail during their first year in business.) You might be interested in this data as viewed from the early stage investor’s viewpoint. years before a liquidity event (positive or negative.)

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Angel Investor Angel Groups Liquidity Event Early Stage 106

Berkonomics

AUGUST 20, 2015

The inciting incident in a movie is the event at the beginning of the story that causes the hero’s life to be completely transformed and irrevocably changed, and makes the whole story unfold. I thought of this in a recent liquidity event in one of my portfolio companies. Email readers, continue here…] Not so fast.

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Liquidity Event Private Equity Valuation Equity 48

Berkonomics

FEBRUARY 28, 2019

A win-win for the investor and entrepreneur assuming the company does grow and have a liquidity event someday. The eye-opening process of borrowing for a small business. Starting and running a small or growing business can be a challenge to the most confident and optimistic entrepreneur.

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Warrant Liquidity Event Dilution Cofounder 48

Berkonomics

SEPTEMBER 26, 2013

Email readers, continue here.] The liquidity event and beyond' You know that the buyer will be crawling the offices with legal and accounting personnel, reviewing contracts, financials, governance documentation, intellectual property, leases, and much more. How do you explain this if not by making a general announcement?

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Due Diligence Liquidity Event Intellectual Property SEC 85

Berkonomics

OCTOBER 10, 2013

Email readers, continue here.] And there is the question of whether an investment banker has a personal agenda to get a deal done in minimum time, even if the proceeds to the seller are less than could have been expected. The liquidity event and beyond'

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Investment Bankers Liquidity Event Salary Lean 83

Berkonomics

JUNE 2, 2010

Email readers continue here.] I know from my own experience that no matter how good you think you are at company-building, it is those who surround you with talent that make the difference and add extraordinary value to create an eventual liquidity event.

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Liquidity Event Stock Options IPO Stock 86

Berkonomics

SEPTEMBER 24, 2015

For high growth ventures being groomed for a lucrative liquidity event, this is usually a wise choice, presuming additional growth capital can be successfully raised on agreeable terms. Email readers, continue here…] But this too is an overly simplistic view. This should be a major milestone goal of all start-ups.

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Liquidity Event Ohio Acquisition Revenue 48

Berkonomics

OCTOBER 29, 2015

Taking money from professional investors such as angels or VCs usually requires that you agree to seek an exit for those investors in your plan, often targeting five to seven years as the ideal period for growth before a liquidity event.

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Liquidity Event Equity Venture Capital Stock 48

Berkonomics

SEPTEMBER 13, 2011

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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Intellectual Property Liquidity Event Acquisition Distribution 67

Berkonomics

DECEMBER 17, 2020

Email readers, continue here… ] The Angel Capital Association (ACA) lists over four hundred member groups, located throughout the USA. 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.

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Equity Finance Liquidity Event Angel Groups 62

Startup Professionals Musings

FEBRUARY 3, 2010

Most quality advisors know that chances of a liquidity event are rare. See his regular blog or contact him directly via email. One of the biggest myths that startups have is that you do not have to pay advisors, or you can pay them in future-value stock. What is the value of free? Stock is not adequate compensation.

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Advisory Board Startup Liquidity Event Stock 225

Growthink Blog

JANUARY 13, 2013

Enacting a liquidity event. Send the VC partner or associate a "teaser" email. Rather, you need to send them a "teaser" email to see if they are interested. Once the VC "bites" on your teaser email, the next step is generally to send them your business plan. Here's how VCs earn returns for their investors: 1.

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Venture Capital Angel Investor Liquidity Event Term Sheet 92

Berkonomics

AUGUST 29, 2013

Email readers, continue here.] A recent decision by the Delaware Court in favor of the common shareholders in marginal sales sheds light upon this dilemma for boards – at least for boards of Delaware corporations, no matter where they reside. The liquidity event and beyond'

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Delaware Liquidation Preference Liquidity Event Preferred Stock 66

Berkonomics

NOVEMBER 1, 2018

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

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Stock Options Stock Distribution Programming 192

Growthink Blog

SEPTEMBER 9, 2011

VCs earn returns for their investors by finding high growth companies, making investments in them at favorable terms, guiding and nurturing them, and enacting a liquidity event (e.g., Send the VC partner or associate a "teaser" email. Rather, you need to send them a "teaser" email to see if they are interested.

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Venture Capital Liquidity Event Initial Public Offering Term Sheet 114

Berkonomics

MAY 7, 2015

Email readers, continue here…] This lesson is important. And we look to see if the size projected is large enough to interest us as investors, since that is directly proportional to the ultimate value of the company in a liquidity event.

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Liquidity Event .Net Differentiation Business Plan 48

Berkonomics

SEPTEMBER 27, 2018

Email readers, continue here…] I did forget to tell you that on that day looking into the company’s books I discovered that neither the company nor its founder had filed Federal income tax returns during the three years in business, didn’t I? The surprise I could not ignore.

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Pre-Money Valuation Sales Liquidity Event Valuation 48

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. It is for this group that we explore the implications implicit in raising money for growth.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Berkonomics

FEBRUARY 23, 2023

Email readers, continue here…] Think of major companies, public and private, that have lost their shiny appeal over time, including Zinga, LivingSocial and Fisker in this generation – and Alta Vista in the last.

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Dilution Valuation Early Stage Equity 62

Berkonomics

SEPTEMBER 17, 2011

email readers continue here.] Did I forget to tell you that on that day, looking into the company’s books, I discovered that neither the company nor its founder had filed Federal income tax returns during the three years in business? There are natural high points in one or both that may not be obvious until looking back.

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Liquidity Event Pre-Money Valuation Sales Valuation 59

Berkonomics

JANUARY 27, 2010

Email readers continue here.] There are also clauses in many such investor documents that allow the investor to override the founder and force a sale of the company if a proposed sale is attractive to an investor for liquidity, even if the founder feels that there is much more potential if the business is not sold at the present time.

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Liquidity Event Initial Public Offering Dividend Valuation 67