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

Steve Blank

Liquidity. A liquidity event means that the equity (the stock) you sold your investor can now be converted into cash.) Period.

Entrepreneurs: Take the time to celebrate your exit.

Berkonomics

The liquidity event and beyondBut you did make it, and that’s what counts. Many fail multiple times. Take a long breath. Hit the beach.

Sell when growth is high, even if cash flow is low.

Berkonomics

The liquidity event and beyondBy John Huston. This should be a major milestone goal of all start-ups.

Angels and VCs: Don’t be greedy even if you can.

Berkonomics

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders.

Exit timing and price: WHEN to sell? How long does it take?

Berkonomics

The liquidity event and beyondBy Basil Peters. Email readers, continue here…] How Long Does It Take to Sell a Company?

Flippers vs Keepers–At times earnings don’t matter

Berkonomics

The liquidity event and beyondToday he serves as Chairman of British Far East Holdings Ltd. By Arthur Lipper.

Will you be happy at your 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?

Envision the end game. Advance toward the goal.

Berkonomics

But most of us dream of selling the business someday for lots of money and building our wealth upon that event. The liquidity event and beyond

Look for your strategic buyer first.

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The liquidity event and beyondBy John Huston. Many large companies have a preferred template from which their deal teams rarely stray.

The muted thrill of the deal closing.

Berkonomics

But the closing was such a non-event that you wonder why people even call it a “closing.”. The liquidity event and beyond Or not.

Entrepreneurs do not easily retire.

Berkonomics

The liquidity event and beyond This is the final posting in this cycle. Soft cover from Amazon.com: [link]. Just saying….

Don’t be greedy even if you have the power.

Berkonomics

Sometimes the end game or sale of the company is not a happy event. The liquidity event and beyond

Provide for succession well in advance of need.

Berkonomics

The liquidity event and beyond And in the three cases, there was none. This is one sticky conversation for most young executives.

Create equity value with every step.

Berkonomics

Positioning The liquidity event and beyondYou may be an architect or doctor or other professional managing your business, knowing that the end game value of your client or patient list is small and not easily transferred to any buyer without attrition. Email readers continue here.] What creates value in a business?

10 Keys To Giving The Right Entrepreneur Your Money

Startup Professionals Musings

Once invested, you should expect no return until the first “liquidityevent in 3-5 years, maybe longer. Think long-term. Marty Zwilling.

The most satisfying life journey is never about the money.

Berkonomics

And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money. Be honest with yourself.

10 Answers That Make Your Startup Plan Investable

Startup Professionals Musings

If you don’t plan a liquidity event, you won’t find many investors interested. What is the business problem you are solving?

Intel Disrupted: Why large companies find it difficult to innovate, and what they can do about it

Steve Blank

Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions).

Think of your exit as you commit your resources along the way.

Berkonomics

The liquidity event and beyond Each decision you make to commit resources affects the future value of the business to some degree. We must assume that you intend to sell the enterprise at some point in the future. There are many reasons a company finds to make an acquisition.

Start a deal room and keep it current.

Berkonomics

The liquidity event and beyond Maybe you have not heard the term, “deal book.” Email readers, continue here.]

Failure is the greatest of teachers.

Berkonomics

The liquidity event and beyond Not all companies are successful. The end game can be a failure of the business.

8 Secrets To Credible Startup Financial Projections

Startup Professionals Musings

Show a liquidity event and investor return at the end of the period. You shouldn’t invest in an undefined business.

8 Ways An Investor Pitch Differs From A Product Pitch

Startup Professionals Musings

The entrepreneur needs to show a strategy for such an event, and a projected value and return to the investor.

There are three kinds of business buyers.

Berkonomics

The liquidity event and beyond This is one of my favorite insights, since I lived this one in a positive exit from my computer business. Most people will tell you that there are two kinds of eventual buyers for your business: financial and strategic. This rare buyer needs your company.

8 Ways To Maximize The Value Of Your Startup Stock

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.

Stock 82

List ten companies that could buy your business.

Berkonomics

Next, have the group focus upon column three, ignoring the obvious gain our company would make in liquidity to shareholders.

How Do You Want to Spend Your Next 4 Years of Your Life?

Steve Blank

Or is it something that can grow to a size that will result in an acquisition or some liquidity event? Ouch. ——– 1.

Fund Raising is a Means Not an End

Steve Blank

How much do they need to own at a liquidity event? Not all that glitters is gold. William Shakespeare. That’s a big mistake.

IRR 154

10 Tough Quandaries That Lead Entrepreneurs Astray

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.

5 Clues To Investor-Friendly Financial Estimates

Gust

According to a recent Dow Jones VentureSource report, the average time to liquidity of an equity investment in a startup is now about five years.

7 Founding Sins Seed-Stage Startups Should Avoid

View from Seed

Over the past few years, I have been involved with and close to a number of both successful and unsuccessful startups. Inauthenticity. Sloth. Greed.

Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. million. Not bad.

Leave something on the table in a sale.

Berkonomics

The liquidity event and beyondIsn’t the goal of any negotiation to get the maximum possible out of the other side? I have learned from long experience that the last bit of concession is the most expensive in a negotiation.

5 Clues To Investor-Friendly Financial Estimates

Startup Professionals Musings

According to a recent Dow Jones VentureSource report, the average time to liquidity of an equity investment in a startup is now about five years.

Money is not the only measure of success.

Berkonomics

I propose that there are few times in life when the opportunity opens to look only outward, to participate in charity events, extended family vacations, community boards and even coaching other entrepreneurs. The liquidity event and beyondEmail readers, continue here.] How empowering.

Avoid the race to zero…

Berkonomics

Protecting the business The liquidity event and beyondWhen do you sell your company? Obviously we all want to sell at the top.

Bring Your Startup to the U.S.

Early Growth Financial Services

There are also integrated service providers and a collaborative environment of founders working toward the common goal of a liquidity event. Ever wondered what expanding your startup internationally entails? Embassy in London, and Glenn McCrae, EGFS’ Chief Strategy Officer. You can view the slide deck here. Also, success likes company!

Everyone loves to leave a legacy.

Berkonomics

And once a month, while watching TV, I spend part of an evening writing personal messages to each birthday employee, recalling an event or complimenting a behavior or success. The liquidity event and beyond Be honest now. Have you ever thought of what legacy you’ll leave behind? And such stories do get around.

Create stakeholder loyalty when times are good.

Berkonomics

Raising money The liquidity event and beyond There are several times when stakeholder loyalty is tested to the limit. For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. Take advantage of the good times to build such loyalty.

A successful exit is a great measure of a good journey.

Berkonomics

The liquidity event and beyond I’ve been involved with well over a dozen successful exits and four initial public offerings over the years, some of them with monstrous gains, some more modest. Then in addition, there are the exits that returned some portion of capital, but nothing more.