Both Sides of the Table

OCTOBER 12, 2014

Prorata investments rights given investors the right to invest in your future fund-raising rounds and maintain their ownership % in your company as your company grows and raises more capital. New investors sometimes want early investors to put in money to “prove” they have confidence in the new price.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

David Teten

MAY 9, 2012

We are in the midst of two great disruptions to American business: the internet’s ongoing disruption of most traditional industries: finance, healthcare, retail, finance, fashion, etc. HBSAANY members include venture capitalists, individual accredited investors, and other institutional investors.

Venture Capital 154

Venture Capital Programming Accredited Investor New York 154

ithacaVC

MARCH 9, 2017

The importance of the Board is why institutional investors (like VCs) often get a seat on the Board after an investment. But don’t be fooled, there is an element of control as investors want a say in critical decisions. We followed in line with the lead investor and went along with the structure.

Seed Stage 58

Seed Stage Software Review Institutional Investors Lead Investor 58

OnlyOnce

JULY 30, 2020

If you’re a founder entrepreneur who has led your company for several years, the odds are you have a significant amount of emotional investment in your company, too. Sometimes you can have a major internal problem related to the cap table–a founder with a lot of stock needs liquidity or you need to push this person out of the company.

Cap Table 48

Cap Table Institutional Investors Startup Early Stage 48

Startup Professionals Musings

MARCH 22, 2020

Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation. Some founders are too focused on quick repayment, and they compromise strategic decisions. Pay the money back, with thanks, as quickly as you can.

Management 308

Management Cram Down Angel Investor Equity 308

David Teten

JANUARY 9, 2013

Aspen is looking for institutional investor and entrepreneur speakers willing to share their investing insights and personal experiences. What incentives are there to incorporate social financing into their overall investment strategy? What are the key sectors where social financing can have significant impact?

Tunisia 114

Tunisia Libya Algeria Mauritania 114

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

David Teten

SEPTEMBER 5, 2014

Like many established finance & media companies, GLG knows that the tech startup sector is a growing part of the economy. I’ve also presented at a range of industry conferences on how institutional investors can use professional networks for research , origination , market research , and value creation.

New York 114

New York Technical Review Networking Advisory Board 114

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. And some founders are quite good at it too. Do not take that selection lightly. And, broadly speaking, that is correct.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

David Teten

DECEMBER 3, 2019

Tim Friedman, Founder, PE Stack , said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. Excel and Google simply aren’t going to cut it if you expect to build a high quality institutional investor base.”. 3) Raise capital.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Haystack

OCTOBER 2, 2019

Before we dive into this, let me say (1) I know a lot of people personally who run these accelerators and consider them friends (and darn good people); and (2) I know there will be a bunch of founders who will say “Hey, well, I met some great investors this way, so it can work.” Ultimately, the buck stops with the founder.

Deal Flow 106

Deal Flow Cap Table Early Stage Institutional Investors 106

Startup Professionals Musings

MARCH 9, 2018

Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation. Some founders are too focused on quick repayment, and they compromise strategic decisions. Pay the money back, with thanks, as quickly as you can.

Cram Down 148

Cram Down Angel Investor Equity Dividend 148

The Startup Magazine

JULY 1, 2022

With these structural improvements, institutional investors, like pension funds and hedge funds, can contribute trillions of dollars into the marketplace resulting in a more stable market with less volatility and a more predictable investment for the individual investor. William Rice – Cryptobuxx Founder.

Stock 132

Stock Institutional Investors Demand Portfolio 132

VC Cafe

FEBRUARY 6, 2011

Jussi Laakkonen , CEO & founder of Applifie, summarized it well: We recently raised our seed round at Applifier and it was led by a silicon valley seed fund MHS Capital, whose general partner is Mark Sugarman. It doesn’t come naturally to many European founders. They take international Founders. And then read it again.

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

Up and Running

SEPTEMBER 26, 2016

For startups and high-growth businesses, as you scale and encounter new milestones and obstacles, you will be faced with the question of how to finance and plan for that growth. Luckily for founders, the ways in which you can finance your startup are varied based on your business model, your preference, your goals, and timeline, and so on.

Covenant 60

Covenant Institutional Investors Balance Sheet Warrant 60

Startup Professionals Musings

APRIL 17, 2013

Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation. Some founders are too focused on quick repayment, and they compromise strategic decisions. Pay the money back, with thanks, as quickly as you can.

Cram Down 230

Cram Down Angel Investor Equity Dividend 230

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Startup Professionals Musings

NOVEMBER 11, 2015

Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation. Some founders are too focused on quick repayment, and they compromise strategic decisions. Pay the money back, with thanks, as quickly as you can.

Cram Down 120

Cram Down Angel Investor Equity Dividend 120

K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Rob Go

SEPTEMBER 2, 2014

Unlike large funds with hundreds of missions of dollars in each fund, it doesn’t take a huge amount of capital to getting going as a seed investor, so the barriers to entry are not as high. As I’ve blogged about in the past, there are positives and negatives to this strategy, but it is a viable option to some founders.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

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

Hunter Walker

JUNE 21, 2014

One question entrepreneurs sometimes don’t ask when raising seed financing is “will this investor be able to follow on in future rounds.” This is certainly one way to ensure you can pledge support to a founder while also maintaining your ownership, but it’s not the only approach.

Institutional Investors 91

Institutional Investors Dilution Later Stage Portfolio 91

Startup Company Lawyer

MARCH 12, 2009

Any company that raises venture financing will need to be a C corp in order to issue preferred stock. If founders want the benefit of flow through tax treatment with respect to losses prior to an outside financing, an S corp election may make sense as long as there are no entity or non-U.S. citizen/resident stockholders.

LLC 61

LLC Stock Options Preferred Stock Stock 61

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. RBI investors usually don’t take equity.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. And large checks require very large exits to achieve good returns.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

Hunter Walker

SEPTEMBER 22, 2014

These “ piggy rounds ” usually left little room for other institutional investors, in contrast to traditional seed rounds which may include several funds collaborating. My particular POV is that piggy rounds, just like party rounds, are risky choices for most founders (and have my own obvious bias in this statement).

Later Stage 95

Later Stage Valuation Semantic Institutional Investors 95

David Teten

APRIL 7, 2017

This is the debut of an annual series of summits focused on sovereign wealth funds, institutional investors, family offices, venture capitalists, and entrepreneurs interested in technology-driven entrepreneurship and with ties to the Middle East and North Africa (MENA) region. The summit is hosted by: – ABANA – the preeminent U.S.

New York 60

New York Africa Cofounder Egypt 60

BeyondVC

NOVEMBER 17, 2016

We each independently fell in love with enterprise software 20+ years ago as seed investors (cos like gotomeeting/Citrix, greenplum/EMC, livperson/IPO LPSN) and founders (workmarket, onforce/Adecco, spinback/buddymedia/salesf0rce) and are now benefiting from the ecosystems, knowledge and network that we’ve collectively developed.

Cap Table 60

Cap Table Cofounder Dividend Institutional Investors 60

ReadWriteStart

MAY 2, 2012

Getting financing for your startup is rarely easy, but if you approach the wrong investor, you can make it even harder than it has to be. How can there be a ‘wrong investor’?” Approaching the wrong investor is kind of like asking someone who’s married out on a date. Venture capitalists are institutional investors.

Angel Investor 124

Angel Investor Institutional Investors Angel Groups Flash 124

Hunter Walker

APRIL 27, 2014

We brief our major investors quarterly and decided to model our LP meeting after what “big funds” do, albeit with a few Homebrew flourishes :) Logistically this meant an afternoon session with presentations/Q&A then a dinner with founders/advisors. We love our founders. Afternoon Session. And we invest in 1.2

LP 97

LP Cofounder Term Sheet Valuation 97

VC Adventure

MAY 21, 2014

FG Angels and AngelList will get their carry straight from the syndicate investors upon an exit. What this means for an AngelList company is – be completely ready for investors before giving FG Angels the green light to go live. 506(b) vs 506(c): These refer to two of the SEC rules that regulate “crowdfunding” financing.

Syndicate 93

Syndicate Syndication Technical Review Due Diligence 93

Growthink Blog

MAY 10, 2012

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

K9 Ventures

MAY 14, 2011

This in theory is very similar to the behavior of institutional investors, however, there is one big difference. Institutional investors make sizable investments in a company, so that when they do get a big hit that can make the whole fund. However, there is a difference. The cycle will continue, as it inevitably does.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Rob Go

FEBRUARY 24, 2014

Apart from the founders and employees of the company, Sequoia Capital was the big winner, and that was recognized by everyone. The most impressive fact is that Sequoia is the only institutional investor in the company. 4) create an auction for the financing and drive up the price even higher, etc.

Cap Table 78

Cap Table Valuation Finance Institutional Investors 78

Reid Hoffman

OCTOBER 5, 2020

One of the hottest topics in the technology and finance world right now is an old idea that has suddenly found new life, the special purpose acquisition company or “SPAC.” Most IPOs are managed by a handful of investment banks who run a roadshow to sell stock to risk-averse institutional investors.

Venture Capital 28

Venture Capital IPO Cofounder Institutional Investors 28

abovethecrowd.com

MAY 20, 2013

As Benchmark is a large institutional investor in Grubhub, we were actively involved in the merger process, and we are quite excited about the potential of the two companies coming together. 3) Investor/Founder Mindset Challenges. Even melding two separate option programs can be challenging.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

Austin Startup

MAY 17, 2017

They’ll often ask for different variants of ‘information rights’ — which can include delivery of regular financials, and notification of major transactions (like financings). This means the investor has the right to observe everything that happens at the Board level, which includes hiring people, equity grants, approving major deals, etc.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48