Next week, we begin again with new insights from startup through liquidity event, including guest postings by some of the nation’s best known angel investors and entrepreneurs. The liquidity event and beyond This is the final posting in this cycle. MORE
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. The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. MORE
Show a liquidity event and investor return at the end of the period. Entrepreneurs often ask me why investors expect financial projections for a new startup even before the product is built and while the market is still being defined. MORE
Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Further, preferred stock holders can be recipient of accrued dividends in a sale or liquidation. The liquidity event and beyond MORE
If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? The liquidity event and beyondHave you figured out what you want to have, or to be, when you reach the end of your personal run in this business life? MORE
Or is it something that can grow to a size that will result in an acquisition or some liquidity event? MORE
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. MORE
Liquidation Preferences : Every now and then you’ll see a liquidation preference in a convertible debt deal. Back in the good old days usury laws prevented such terms, but in most states this is not an issue and allow the investors to not only have the security of holding debt, but the upside of preferred stock should a liquidation event occur. Convertible Debt convertible debt interest rate liquidation preferences pro-rata rights MORE
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? We shed some light, and hopefully—provided some encouragement, during our recent webinar with David Glazer, Partner at Fried Frank, JD Breidenstein, Minister Counselor for Commercial Affairs and Ben Parkinson, Visa Analyst, both with the U.S. MORE
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 MORE
But the more important rationale is raised in the following about why employees most often do not have significant outcomes even in fairly positive liquidity events. MORE
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. However, midstage startups have gotten past some initial value creation milestones and likely have a much greater chance of growing 10x into a nearterm liquidity event within 2-3 years than a newly funded company would. MORE
Next, have the group focus upon column three, ignoring the obvious gain our company would make in liquidity to shareholders. Email readers continue here.] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers. MORE
The liquidity event and beyond Maybe you have not heard the term, “deal book.” That’s a comprehensive piece on a company for use by a buyer in determining fit. MORE
The liquidity event and beyondDave’s note: For the second time, we invite Basil Peters, author of “Early Exits,” back as our guest – to provide more of his insight into the “when” to exit by selling your business. MORE
The liquidity event and beyondWe come to the end of this cycle of insights with a thought about how you might view your successful exit from the company you have spent so much effort to build. MORE
The liquidity event and beyond Not all companies are successful. The end game can be a failure of the business. In fact, many angel investors or venture capitalists look for and respect the lessons learned by entrepreneurs that have survived a failed business. MORE
But the closing was such a non-event that you wonder why people even call it a “closing.”. The liquidity event and beyond Now you have worked for months to get this deal to the closing, anticipating the wire transfers to the shareholders that will come any minute. MORE
Liquidity. 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 MORE
The liquidity event and beyond Each decision you make to commit resources affects the future value of the business to some degree. Minor decisions, such as replacing employees who have left the company or equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this analysis. MORE
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. MORE
The liquidity event and beyond Many CEOs have asked me if I felt an investment banker adds value if the buyer has already been identified. MORE
Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership. MORE
Startup investments are extremely risky, primarily because the stock has no value until a future liquidity event, such as an acquisition or public offering. The entrepreneur needs to show a strategy for such an event, and a projected value and return to the investor. MORE
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. The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. MORE
And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money. The liquidity event and beyond MORE
How much do they need to own at a liquidity event? Not all that glitters is gold. William Shakespeare. For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake. MORE
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. MORE
Many ultimately struggle for five to 10 more years, before they achieve “overnight” success, or a liquidity event. MORE
Paying commissions to undisclosed third parties in order to obtain deals, hiding or entering misleading financial data, associating with anyone with a past SEC suspension, and many more “gotcha” events, qualify as strong deterrents to a good closing. The liquidity event and beyond MORE
Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). In the 21 st century it’s harder for large corporations to create disruptive breakthroughs. MORE
The liquidity event and beyondDave’s note: We are privileged this week to host a post by Arthur Lipper, a well-respected member of the international financial community since 1954. MORE
For high growth ventures being groomed for a lucrative liquidity event, this is usually a wise choice, presuming additional growth capital can be successfully raised on agreeable terms. The liquidity event and beyond MORE
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. MORE
If you don’t plan a liquidity event, you won’t find many investors interested. Entrepreneurs who are looking to attract investors need to develop and pitch a plan -- preferably written -- that answers every potential investor question about your startup before it is asked. MORE
The liquidity event and beyondDave’s note: John Huston is founder and past manager of the 300+ member Ohio TechAngel Funds and a past Chairman of both the Angel Capital Association and the Angel Resource Institute. . By John Huston. MORE
The liquidity event and beyond When we are young and early in our business lives, we feel infallible to the degree that we do not think of what might happen if we die while in office or decide to leave the company for any reason. MORE
His Strategic Exits Corporation provides M&A advisory services, and he is much in demand as a speaker at angel and entrepreneur events worldwide. – Dave. The liquidity event and beyond MORE
Sometimes the end game or sale of the company is not a happy event. Is there a liquidation preference in place where the preferred investors can take a multiple of their investment, (twice or three times the amount) from a sale before the common shares receive anything? MORE
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. MORE
Investors need a liquidity event to get their money out. As an angel investor, I hear many entrepreneurs making negative comments about competitors or asserting they don’t have any competitors. MORE
Too often, entrepreneurs neglect planning for and managing personal finances as they focus on building their business, lining up financing, and steering toward an eventual liquidity event. One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets. MORE
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. MORE
Liquidity Event Related Topics Steve Blank
MARCH 16, 2016
Liquidity. 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
Berkonomics
OCTOBER 8, 2015
The liquidity event and beyondWe come to the end of this cycle of insights with a thought about how you might view your successful exit from the company you have spent so much effort to build.
Berkonomics
SEPTEMBER 24, 2015
For high growth ventures being groomed for a lucrative liquidity event, this is usually a wise choice, presuming additional growth capital can be successfully raised on agreeable terms. The liquidity event and beyond
Berkonomics
OCTOBER 1, 2015
Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Further, preferred stock holders can be recipient of accrued dividends in a sale or liquidation. The liquidity event and beyond
Berkonomics
SEPTEMBER 3, 2015
His Strategic Exits Corporation provides M&A advisory services, and he is much in demand as a speaker at angel and entrepreneur events worldwide. – Dave. The liquidity event and beyond
Berkonomics
AUGUST 27, 2015
The liquidity event and beyondDave’s note: We are privileged this week to host a post by Arthur Lipper, a well-respected member of the international financial community since 1954.
Berkonomics
SEPTEMBER 12, 2013
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
Berkonomics
FEBRUARY 23, 2017
If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? The liquidity event and beyondHave you figured out what you want to have, or to be, when you reach the end of your personal run in this business life?
Berkonomics
AUGUST 13, 2015
The liquidity event and beyondDave’s note: John Huston is founder and past manager of the 300+ member Ohio TechAngel Funds and a past Chairman of both the Angel Capital Association and the Angel Resource Institute. . By John Huston.
Berkonomics
OCTOBER 17, 2013
But the closing was such a non-event that you wonder why people even call it a “closing.”. The liquidity event and beyond Now you have worked for months to get this deal to the closing, anticipating the wire transfers to the shareholders that will come any minute.
Startup Professionals Musings
FEBRUARY 6, 2015
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.
Berkonomics
OCTOBER 24, 2013
Next week, we begin again with new insights from startup through liquidity event, including guest postings by some of the nation’s best known angel investors and entrepreneurs. The liquidity event and beyond This is the final posting in this cycle.
Berkonomics
AUGUST 29, 2013
Sometimes the end game or sale of the company is not a happy event. Is there a liquidation preference in place where the preferred investors can take a multiple of their investment, (twice or three times the amount) from a sale before the common shares receive anything?
Berkonomics
SEPTEMBER 5, 2013
The liquidity event and beyond When we are young and early in our business lives, we feel infallible to the degree that we do not think of what might happen if we die while in office or decide to leave the company for any reason.
Startup Professionals Musings
FEBRUARY 13, 2016
If you don’t plan a liquidity event, you won’t find many investors interested. Entrepreneurs who are looking to attract investors need to develop and pitch a plan -- preferably written -- that answers every potential investor question about your startup before it is asked.
Berkonomics
JUNE 17, 2011
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.
Steve Blank
JUNE 23, 2016
Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). In the 21 st century it’s harder for large corporations to create disruptive breakthroughs.
Berkonomics
NOVEMBER 12, 2011
And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money. The liquidity event and beyond
Startup Professionals Musings
SEPTEMBER 7, 2015
Show a liquidity event and investor return at the end of the period. Entrepreneurs often ask me why investors expect financial projections for a new startup even before the product is built and while the market is still being defined.
Startup Professionals Musings
AUGUST 7, 2015
Startup investments are extremely risky, primarily because the stock has no value until a future liquidity event, such as an acquisition or public offering. The entrepreneur needs to show a strategy for such an event, and a projected value and return to the investor.
Steve Blank
DECEMBER 9, 2013
Or is it something that can grow to a size that will result in an acquisition or some liquidity event?
Startup Professionals Musings
MAY 18, 2015
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.
Steve Blank
JUNE 11, 2013
How much do they need to own at a liquidity event? Not all that glitters is gold. William Shakespeare. For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake.
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.
Berkonomics
AUGUST 27, 2011
The liquidity event and beyond Each decision you make to commit resources affects the future value of the business to some degree. Minor decisions, such as replacing employees who have left the company or equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this analysis.
Gust
AUGUST 10, 2014
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. The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO.
Berkonomics
OCTOBER 3, 2013
The liquidity event and beyond Maybe you have not heard the term, “deal book.” That’s a comprehensive piece on a company for use by a buyer in determining fit.
Berkonomics
SEPTEMBER 19, 2013
The liquidity event and beyond Not all companies are successful. The end game can be a failure of the business. In fact, many angel investors or venture capitalists look for and respect the lessons learned by entrepreneurs that have survived a failed business.
SoCal CTO
SEPTEMBER 27, 2011
But the more important rationale is raised in the following about why employees most often do not have significant outcomes even in fairly positive liquidity events.
View from Seed
MAY 19, 2015
Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership.
Berkonomics
SEPTEMBER 2, 2011
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.
Startup Professionals Musings
AUGUST 17, 2014
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. The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO.
Early Growth Financial Services
JULY 23, 2014
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? We shed some light, and hopefully—provided some encouragement, during our recent webinar with David Glazer, Partner at Fried Frank, JD Breidenstein, Minister Counselor for Commercial Affairs and Ben Parkinson, Visa Analyst, both with the U.S.
Berkonomics
SEPTEMBER 13, 2011
Next, have the group focus upon column three, ignoring the obvious gain our company would make in liquidity to shareholders. Email readers continue here.] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers.
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.
Startup Professionals Musings
DECEMBER 11, 2015
Investors need a liquidity event to get their money out. As an angel investor, I hear many entrepreneurs making negative comments about competitors or asserting they don’t have any competitors.
Early Growth Financial Services
JULY 10, 2014
Too often, entrepreneurs neglect planning for and managing personal finances as they focus on building their business, lining up financing, and steering toward an eventual liquidity event. One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets.
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. However, midstage startups have gotten past some initial value creation milestones and likely have a much greater chance of growing 10x into a nearterm liquidity event within 2-3 years than a newly funded company would.
Startup Professionals Musings
JUNE 6, 2016
Many ultimately struggle for five to 10 more years, before they achieve “overnight” success, or a liquidity event.
Ask The VC
SEPTEMBER 29, 2011
Liquidation Preferences : Every now and then you’ll see a liquidation preference in a convertible debt deal. Back in the good old days usury laws prevented such terms, but in most states this is not an issue and allow the investors to not only have the security of holding debt, but the upside of preferred stock should a liquidation event occur. Convertible Debt convertible debt interest rate liquidation preferences pro-rata rights
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