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What Founders Need to Know: You Were Funded for a Liquidity Event – Start Looking

Steve Blank

While you might be interested in building a company that changes the world, regardless of how long it takes, your investors are interested in funding a company that changes the world so they can have a liquidity event within the life of their fund ~7-10 years. (A You’ve been funded to get to a liquidity event.

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10 Recommendations For Aspiring New Venture Investors

Startup Professionals Musings

Once invested, you should expect no return until the first “liquidityevent in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

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Have you heard the rule of the thirds?

Berkonomics

So, co-management is the second group to share in the bounty upon a liquidity event. Those who receive options but leave the company before a liquidity event may either purchase those shares represented by the options upon exit from the company, or lose the right to those shares, often 60 days after their exit.

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10 Startup Founder Decisions That Have No Good Answer

Startup Professionals Musings

If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Transition to a specialist role, plan to exit, be prepared to be pushed out, or plan to fail. The control and growth dilemma.

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Where is your personal finish line? ?

Berkonomics

If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? But this question begs for a positive answer. 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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How To Prevent Your Founder’s Shares From Vaporizing

Startup Professionals Musings

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. Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role.

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10 Keys To Making Money By Investing In Entrepreneurs

Startup Professionals Musings

Once invested, you should expect no return until the first “liquidityevent in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.