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Why Entrepreneurs Should Be Generous With Investors

YoungUpstarts

by Alejandro Cremades , cofounder of Panthera Advisors and author of “ The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know “ Why should entrepreneurs intentionally be generous when negotiating with investors? Generosity is nowhere on their radar.

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NextView’s Greatest Hits

View from Seed

But mainly we did it because these corporate VCs were among the only groups willing to invest at PayPal’s somewhat inflated post-money valuation, during the middle of the dot-com crash when traditional VCs pulled back sharply and other sources of funding were constrained.” ” (Lee Hower). ” (David Beisel).

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

In a world where the economy only heads in one direction (read: 2009-2014) most investors & entrepreneurs forget to pay attention to gross burn. If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs.

Burn Rate 383
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So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

As I have pointed out in previous posts , 91% of VCs surveyed believe prices are declining (30% believe substantially) and 77% believe that funding will take longer than it has in the past. I’m surprised how few entrepreneurs have this open conversation with their investors. Wouldn’t you rather know where you stand?

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A Guide to Using Authority & Social Proof in Fund Raising

Both Sides of the Table

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator. It is how angel rounds come together.&#.

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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

2010 Operating Income: $16 million. Post-money valuation probably no higher than $12M (2). Im a former Silicon Valley entrepreneur turned East Coast VC. Gross Margin: 94% –> i.e. for every $1 of revenue Kayak only spends $0.06 2010 Net Income: $8 million. Search Statistics: 2010 Queries: 634 million.

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Seed Stage Startups Are Now Graded on a Curve

View from Seed

Rather, it has been broken into bits of a series of capital raises to reach meaningful milestones… “pre-seed,” “post-seed,” and rounds in between have become the norm. Whether or not this situation is good or bad for entrepreneurs and the ecosystem, it is indeed reality. Effective) post-money valuation.