Berkonomics

JUNE 26, 2014

Angel investors, particularly those in organized angel groups, are typically former entrepreneurs who have had successful liquidity events in their pasts, or executives of companies who’ve retired with the funds from their stock options. Members want to socialize with those who have similar backgrounds and interests.

Liquidity Event 76

Liquidity Event Technical Review Angel Groups Due Diligence 76

Berkonomics

OCTOBER 3, 2013

The liquidity event and beyond' Bankers, investors, strategic partners, and ultimately your buyer or even attorneys providing opinions for an IPO, will all be most impressed by your thoughtful early management decision to make their lives easier and their job more productive.

Software Review 76

Software Review Due Diligence Liquidity Event Intellectual Property 76

Gust

DECEMBER 1, 2011

Nevertheless, choosing to defer basic corporate housekeeping items can be disastrous in some circumstances, as when the failure to spend a few thousand dollars on legal fees to clarify IP ownership and equity arrangements comes back to bite a successful company to the tune of millions of dollars on the eve of a liquidity event.

IP 114

IP Intellectual Property Equity Liquidity Event 114

BeyondVC

MAY 5, 2005

The panel focused on exits or liquidity events and how VCs thought about them. While I believe that Sarbox is a good thing and better and more stringent accounting is necessary, I also think that there is alot of waste ineherent in the regulations and that it needs to be reexamined. This brings me to another point.

Liquidity Event 78

Liquidity Event Technical Review New York Hosting 78

Startup Professionals Musings

JUNE 6, 2022

Once invested, you should expect no return until the first “liquidity” event 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.

Liquidity Event 300

Liquidity Event Angel Investor SEC Accredited Investor 300

Berkonomics

FEBRUARY 15, 2024

Forming business relationships at the highest level As you follow these insights from ignition to liquidity event, you’ll detect a continuing theme, emphasizing the need for deep and wide relationships that the CEO and senior staff can call upon for advice and guidance.

Balance Sheet 77

Balance Sheet Liquidity Event Technical Review Government 77

BeyondVC

MAY 5, 2005

The panel focused on exits or liquidity events and how VCs thought about them. While I believe that Sarbox is a good thing and better and more stringent accounting is necessary, I also think that there is alot of waste ineherent in the regulations and that it needs to be reexamined. This brings me to another point.

Liquidity Event 60

Liquidity Event Technical Review New York Hosting 60

Steve Blank

JULY 19, 2010

Where’s My Liquidity Event. Some VC’s feel that if a startup has grown past the founder’s ability to manage and scale (and hasn’t had a liquidity event,) they should be able to remove the founding CEO and (at best) walk them out the door with only the stock they vested to that day.

Vesting 265

Vesting Liquidity Event Founder Vesting Venture Capital 265

Up and Running

SEPTEMBER 19, 2017

Private equity investments are an important part of many startup business’s plans for accelerating growth or providing founders with a liquidity event. That’s because at those levels the business is so small that the likelihood of needing to engage in contractually unanticipated strategic business activities is extremely high.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

JANUARY 15, 2021

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.

Vesting 298

Vesting Dilution Founder Vesting Stock 298

Startup Professionals Musings

MAY 8, 2022

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.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

Steve Blank

JUNE 11, 2013

How much do they need to own at a liquidity event? How do the fund and the partners make money? What is an IRR? How long is a fund’s life? How much will they invest in the life of your company? What’s a win for them? There are two reasons to take venture money. The first is to scale like there is no tomorrow.

Venture Capital 335

Venture Capital IRR Liquidity Event Business Model 335

Both Sides of the Table

MARCH 3, 2013

He talked about a unique model where you don’t have to become liquid in venture capital and can target singles & doubles. VC can’t don’t invest in these kinds of companies because they can’t get out (no liquidity event). New company in Boston with a model called “royalty capital.”

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

Startup Professionals Musings

MARCH 13, 2020

Define an exit strategy for investors to liquidate their share. They prefer a liquidity event such as an IPO or an acquisition by an existing large industry player, with a valuation at that time of five multiples or more of your projected revenues. Back up your projections with a simple financial model.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Startup Professionals Musings

SEPTEMBER 6, 2019

Once invested, you should expect no return until the first “liquidity” event 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.

Liquidity Event 224

Liquidity Event SEC Entrepreneur Accredited Investor 224

Startup Professionals Musings

SEPTEMBER 24, 2012

Once invested, you should expect no return until the first “liquidity” event 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.

Portfolio 228

Portfolio Accredited Investor Liquidity Event SEC 228

Startup Professionals Musings

NOVEMBER 1, 2013

Once invested, you should expect no return until the first “liquidity” event 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.

Accredited Investor 219

Accredited Investor Liquidity Event SEC Stock 219

Startup Professionals Musings

SEPTEMBER 27, 2023

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.

Stock 240

Stock .Net Vesting Founder Vesting 240

Startup Professionals Musings

DECEMBER 14, 2014

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.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Berkonomics

NOVEMBER 7, 2024

To grow your business to a size that will be attractive to a VC or angel making an investment now, you’ve got to show that the business will be large enough at the time of the investor’s liquidity event (cashing out) to make the investment attractive at all.

Hockey Stick 62

Hockey Stick Liquidity Event Valuation Dilution 62

Startup Professionals Musings

MAY 13, 2011

These investors want to know that you are thinking about a liquidity event – when and how they will get their money out, with ROI. Attractive deals show double-digit positive growth per year, and revenues that are projected to $20M or more within five years. Exit strategy. For a family business, don’t project an exit.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Startup Professionals Musings

AUGUST 17, 2014

The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. Build a path to 10x return. That’s why investors want to hear about your exit strategy. If you don’t have one, or intend to buy out investors with their own money, you probably won’t get much interest.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Startup Professionals Musings

AUGUST 13, 2012

These investors want to know that you are thinking about a liquidity event – when and how they will get their money out, with ROI. Attractive deals show double-digit positive growth per year, and revenues that are projected to $20M or more within five years. Exit strategy. For a family business, don’t project an exit.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Startup Professionals Musings

SEPTEMBER 16, 2017

Once invested, you should expect no return until the first “liquidity” event 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.

Liquidity Event 184

Liquidity Event SEC Accredited Investor Angel Investor 184

Startup Professionals Musings

JULY 19, 2013

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.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Startup Professionals Musings

AUGUST 10, 2019

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.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Startup Professionals Musings

MAY 28, 2013

The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. Build a path to 10x return. That’s why investors want to hear about your exit strategy. If you don’t have one, or intend to buy out investors with their own money, you probably won’t get much interest.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Steve Blank

MARCH 18, 2011

The reward for doing so was a liquidity event via an Initial Public Offering. VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. They taught you about customers, markets and profits.

Internet 335

Internet IPO Silicon Valley Agile 335

Pascal's View

AUGUST 28, 2010

(vi) Going back to the 1970’s it has been documented that 92% of the job growth in venture-backed companies occurs AFTER their IPO: (vii) IPO’s currently account for 13% or LESS than all liquidity events for venture backed companies, down from 56% during the period from 1992 -2000: (viii) The current IPO backlog and, more importantly, the poor (..)

Venture Capital 56

Venture Capital America Initial Public Offering IPO 56

Pascal's View

DECEMBER 17, 2012

Recent reports reveal that mergers and acquisitions still account for over 90% of liquidity events for venture-backed companies in 2012, a lamentable condition that has plagued the US innovation ecosystem for close to a decade.

Acquisition 38

Acquisition Merger Covenant Liquidity Event 38

Steve Blank

FEBRUARY 22, 2011

Small but important, this museum is the real deal with almost every artifact of the computing and pre-computing age (make sure you check out their events calendar.) If it’s a clear day and you have the money after a liquidity event, it’s a mind-blowing trip.

Silicon Valley 335

Silicon Valley San Francisco San Jose Venture Capital 335

Steve Blank

JUNE 11, 2013

How much do they need to own at a liquidity event? How do the fund and the partners make money? What is an IRR? How long is a fund’s life? How much will they invest in the life of your company? What’s a win for them? There are two reasons to take venture money. The first is to scale like there is no tomorrow.

Venture Capital 227

Venture Capital IRR Liquidity Event Business Model 227

Steve Blank

JUNE 23, 2016

Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). But starting in the last quarter of that century and accelerating in this one, a new form of financing – risk capital (angel and venture capital) — emerged.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Gust

JUNE 7, 2014

The technical term for this is the “liquidation waterfall”, because on a liquidation event (whether good, as in a large buyout, or bad, as in a distress sale, investors (and others) get paid out in a specified order.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Hunter Walker

MARCH 8, 2014

The Early Team Still There and They’ll Be Your Tribe for Years : The founders and early team are still in place because there hasn’t been a liquidity event and the work is still exciting for them.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134

Startup Professionals Musings

AUGUST 29, 2018

Payoff after a liquidity event is difficult and unpredictable. People see recent equity investors making billions by getting in early, ala Facebook and Amazon, and may not be prepared for the high probability of losing everything. Professional investors typically are accredited to at least the $200,000 level, and understand the risks.

Equity 180

Equity Due Diligence Angel Groups Liquidity Event 180

Both Sides of the Table

SEPTEMBER 27, 2010

If the company is moderately successful, growing and has great prospects for the future than a small liquidity event will help founders & venture capitalists to be aligned. The hardest thing is deciding what the right time to allow founder liquidity is. It is such a disconnect.

Silicon Valley 308

Silicon Valley Liquidity Event Seed Stage Finance 308