Startup Professionals Musings

AUGUST 19, 2017

Most entrepreneurs struggle with many startup founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Not facing these dilemmas squarely and honestly is one of the biggest pitfalls facing every entrepreneur. Marty Zwilling.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Not facing these dilemmas squarely and honestly is one of the biggest pitfalls facing every entrepreneur. Marty Zwilling.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

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. I don’t fault entrepreneurs for relegating startup legal work to the bottom of their daily triage list; founders are spread incredibly thin.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Steve Blank

JULY 15, 2010

The Golden Age for Entrepreneurs and VC’s. The two decades from 1979 when pension funds fueled the expansion of venture capital to 2000 when the dot-com bubble burst were the Golden Age for entrepreneurs and venture capital firms. Number of Venture Backed Liquidity Events 1991-2000. What Does it Mean to an Entrepreneur?

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

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). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Startup Professionals Musings

JULY 27, 2018

I’m still amazed at how many technical entrepreneurs don’t have a business pitch, and offer me their product pitch or product spec instead. Potential investors love to see gross margins in the fifty percent range or greater, with recurring revenue through subscriptions, follow-on sales, or services. But it’s critical to have one.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

Up and Running

SEPTEMBER 19, 2017

By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable. Background: Adam Carlson is a serial entrepreneur who has successfully raised private capital at three different technology startups. Consequently, he passed. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

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? (You

Liquidity Event 62

Liquidity Event Preferred Stock Dividend Equity 62

Berkonomics

APRIL 20, 2023

We have years of real data to call upon: data that impacts both investors and entrepreneurs. years before a liquidity event (positive or negative.) Entrepreneurs will always start new enterprises. There are two reliable sources of reasonably recent data for us to examine. How about the early-stage investors?

SBA 62

SBA Angel Investor Early Stage Liquidity Event 62

Women Entrepreneurs Can

NOVEMBER 19, 2022

They can also help you develop your product and sales channels. Investors receive a healthy return on investment when the company reaches a liquidity event. This is done by evaluating the product’s potential market, the sales process, and the company’s team. They may also provide a mentorship network.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

Startup Professionals Musings

JULY 19, 2013

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Not facing these dilemmas squarely and honestly is one of the biggest pitfalls facing every entrepreneur. Marty Zwilling.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Startup Professionals Musings

AUGUST 7, 2015

When pitching to investors, entrepreneurs always seem to start with a customer pitch, then add a slide or two about the business. Investors are business experts, while the entrepreneur is more likely the product expert. Specific elements of your marketing and sales plans. Potential investor return calculation and exit strategy.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Berkonomics

JUNE 12, 2014

First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. Few entrepreneurs can do it alone, with subordinate hired help and no expert management to share the burdens, skill sets and efforts involved in growing the enterprise. Email readers, continue here.]

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Berkonomics

NOVEMBER 15, 2018

Looking back over an entrepreneur’s journey. 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. But, for this short moment…. The rewards of angel investing. The rewards of angel investing.

Liquidity Event 48

Liquidity Event Early Stage Government Leadership 48

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.

Liquidity Event 48

Liquidity Event Intellectual Property Naming Acquisition 48

Berkonomics

OCTOBER 4, 2018

The entrepreneur, whether remaining to the end as CEO or not, is celebrated for his or her prescient timing, great vision and excellent execution of the plan. I cannot recall ever attending a closing dinner for a sale in which we returned only a portion of the investor group’s money. It is an exhilarating ending to a great journey.

Sales 54

Sales Investment Bankers Initial Public Offering Early Stage 54

Startup Professionals Musings

AUGUST 13, 2012

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Marketing, sales, and partners.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Berkonomics

SEPTEMBER 27, 2018

Offering to reincorporate the game company as a new entity to avoid any more surprises, the entrepreneur and I negotiated 10% for my $100 thousand, with the remaining 90% for the founder. Fast forward a month to a meeting between a senior executive of the buyer, our hero the entrepreneur, our corporate attorney and myself.

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

Startup Professionals Musings

MAY 18, 2015

When an entrepreneur first incorporates his or her business, he or she may find him or herself the proud owner of 10 million shares of common stock, commonly called founder’s shares. Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Professionals Musings

FEBRUARY 13, 2016

Entrepreneurs who are looking to attract investors need to develop and pitch a plan -- preferably written -- that answers every potential investor question about your startup before it is asked. What are your specific marketing and sales plans? If you don’t plan a liquidity event, you won’t find many investors interested.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Startup Professionals Musings

MAY 13, 2011

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Marketing, sales, and partners.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Berkonomics

MARCH 9, 2017

We have years of real data to call upon: data that impacts both investors and entrepreneurs. years before a liquidity event (positive or negative.) Entrepreneurs will always start new enterprises. For 2016 alone, there are two reliable sources of recent data for us to examine.

Angel Investor 106

Angel Investor Angel Groups Liquidity Event Early Stage 106

Berkonomics

NOVEMBER 1, 2018

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. I found myself in such a situation upon a sale of my computer software company. And a lack of plans for others.

Stock Options 192

Stock Options Stock Distribution Programming 192

Gust

AUGUST 5, 2012

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Marketing, sales, and partners.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Redpoint was understandably disappointed that it didn’t get the chance to see its MySpace investment through to an IPO or later liquidity event at a higher multiple.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Berkonomics

SEPTEMBER 17, 2011

Fast forward a month to a meeting between a senior executive of the buyer, our hero the entrepreneur, our corporate attorney and myself. Our entrepreneur, engorged with the year’s effortless value increases, turned to the executive without a pause, and said something to the effect of “Hell no! And a month later the bubble burst.

Liquidity Event 59

Liquidity Event Pre-Money Valuation Sales Valuation 59

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). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

APRIL 22, 2010

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Marketing, sales, and partners.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Berkonomics

DECEMBER 17, 2020

Each has a process in place to accept applications or recommendations for investment into new companies, and to review these and make decisions based upon their exploration, previous experience in the field, knowledge of the company or industry, or about individual entrepreneurs. Some can supply more when syndicating with other such groups.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

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. For some, that comfort is worth forgoing building high equity value.

Liquidity Event 48

Liquidity Event Equity Venture Capital Stock 48

The Next Web

MARCH 2, 2014

This will have a significant impact on the amount business owners could realize on the sale or other liquidity event for the company. In addition, beyond financial control, many investors will require some input into the operation of your business and even the right to approve certain significant transactions and events.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Hearpreneur

OCTOBER 29, 2017

We asked some entrepreneurs and business owners, why they started their businesses: #1- To take knowledge and apply it to what is coming next. I loved what I did (sales) but I didn’t love doing it for somebody else. Each story is different though the reasons may be the same. Photo Credit: Jim Tobin. Thanks to Ira S.

Entrepreneur 76

Entrepreneur Social Media Liquidity Event Private Equity 76

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.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Berkonomics

JANUARY 6, 2022

First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. This makes for some head-rubbing when attempting to calculate the return on investment with a proposed sale.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Berkonomics

FEBRUARY 23, 2023

Those of us in the business of calculating (guessing) this mythical peak in value often make the same mistake as our entrepreneurs. He concluded that the sweet spot for valuation was in the $20–30 million sales price range, and that many, many times more deals were completed in that range than above $100 million in valuation at exit.

Dilution 62

Dilution Valuation Early Stage Equity 62

Berkonomics

OCTOBER 8, 2015

But what most entrepreneurs fail dramatically at is to celebrate the moment. Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale.

Entrepreneur 48

Entrepreneur Dilution .Net Sales 48

Berkonomics

JANUARY 13, 2022

What most entrepreneurs fail dramatically at is to celebrate the moment. Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale.

Dilution 62

Dilution .Net Sales Entrepreneur 62