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.

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Liquidity Event Startup Exit Strategy Bootstrapping 310

Berkonomics

AUGUST 6, 2020

It will help you to explain the value of your business to potential investors and certainly help focus your efforts as you advance toward that goal of a liquidity event in your future.

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Liquidity Event Intellectual Property IPO Equity 62

VC Adventure

JULY 15, 2021

The Allies program is comprised of an alliance of VCs who have committed to unlocking $5 billion in new philanthropy over the next five years by helping their portfolio companies set aside equity for social impact prior to liquidity events. You can read the full announcement on Business Wire here.

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Liquidity Event Equity Portfolio Community 108

Berkonomics

DECEMBER 17, 2020

VCs often invest no less than $2 million in a single deal, finding it difficult to put less money to work and still spend time on boards and coaching entrepreneurs to a successful liquidity event. For early stage investors, the usual expectation is seven years from investment to expected liquidity. And the one thing in common?

Equity 62

Equity Finance Angel Groups Liquidity Event 62

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.

Angel Investor 183

Angel Investor Startup Liquidity Event Silicon Valley 183

Berkonomics

APRIL 20, 2023

years before a liquidity event (positive or negative.) How about the early-stage investors? You might be interested in this data as viewed from the early-stage investor’s viewpoint. Angel investors hold their average investment for 4.5

Angel Investor 62

Angel Investor Early Stage SBA Startup 62

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.

Startup 246

Startup Cofounder Hockey Stick Entrepreneur 246

Berkonomics

SEPTEMBER 12, 2013

It will help you to explain the value of your business to potential investors and certainly help focus your efforts as you advance toward that goal of a liquidity event in your future. The liquidity event and beyond'

Liquidity Event 76

Liquidity Event Intellectual Property IPO Equity 76

Berkonomics

JUNE 12, 2014

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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Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

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' SOFT COVER book directly from Berkus.com, signed by Dave (with gift inscription if requested): [link].

Entrepreneur 70

Entrepreneur Liquidity Event Angel Investor Stock Options 70

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.

Startup 219

Startup Accredited Investor Angel Investor Stock 219

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? [Email readers, continue here…] 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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Liquidity Event Valuation Email Management 102

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 178

Equity Due Diligence Angel Groups Valuation 178

Steve Blank

APRIL 10, 2019

One other thing to note is that all employees – founders, early employees and later ones – all had the same vesting deal – four years – and no one made money on stock options until a “liquidity event ” (a fancy word to mean when the company went public or got sold.) Today that’s less true.

Stock Options 332

Stock Options Stock Startup Vesting 332

Berkonomics

APRIL 3, 2014

VCs often invest no less than $2 million in a single deal, finding it difficult to put less money to work and still spend time on boards and coaching entrepreneurs to a successful liquidity event.

Finance 92

Finance Equity Startup Angel Groups 92

Berkonomics

SEPTEMBER 20, 2018

Most entrepreneurs and certainly all investors would like to see “a positive liquidity event” (a good sale of the business) someday. Not only will group focus upon the possibility of a liquidity event, it will begin to focus upon a number of possible buyers. So, that’s the reason for this insight.

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Liquidity Event Intellectual Property Naming Entrepreneur 48

Haystack

MAY 9, 2019

Any billion-dollar liquidity event is a rare event, so it will get the Haystack blog treatment. It was just about three years ago when the startup world learned that Unilever had decided to plunk down a cool $1B to buy LA’s Dollar Shave Club.

Acquisition 121

Acquisition Venture Capital Liquidity Event Startup 121

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? Is it a small business that hits $4 million in revenue in four years and $8 million in ten years? You need to decide what your personal goal is and how it matches what you think this business can grow into.

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Cofounder Lean Liquidity Event Video 320

Berkonomics

FEBRUARY 3, 2022

First, the implied promise: Taking money from professional investors such as angels or VCs usually requires that you agree to seek an exit for those investors in your plan, often targeting five to seven years as the ideal period for growth before a liquidity event. What if you later decide to just keep control?

Liquidity Event 62

Liquidity Event Venture Capital Preferred Stock Equity 62

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.

Startup 228

Startup Portfolio Accredited Investor Angel Investor 228

Berkonomics

FEBRUARY 20, 2020

A win-win for the investor and entrepreneur assuming the company does grow and have a liquidity event someday. All entrepreneurs assume risk when starting and growing a business. It is only smart to consider ways to mitigate risks when opportunities to do arise.

Warrant 62

Warrant Liquidity Event Entrepreneur Stock 62

Berkonomics

NOVEMBER 15, 2018

You’ll quickly be drawn into the governance of the organization and introduced into the process of discovery, coaching, leading deals, herding investors, serving on boards and helping entrepreneurs toward liquidity events. Non-profit boards and volunteering.

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Liquidity Event Early Stage Entrepreneur Sales 48

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.

Startup 134

Startup Liquidity Event Early Stage Seed Stage 134

Hunter Walker

SEPTEMBER 29, 2022

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). These are all rare, but real, and fortunately not anything we’ve dealt with in our firm.

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Venture Capital Cap Table LP Equity 135

Berkonomics

MARCH 21, 2019

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.

Valuation 63

Valuation Liquidity Event Hockey Stick Dilution 63

Startup Professionals Musings

JULY 27, 2018

Discussion of likely liquidity events and exit strategy. Every investor pitch must include the size of the desired investment, followed by the percentage of equity offered, thus supporting a realistic valuation today.

Product 150

Product Intellectual Property Entrepreneur Angel Investor 150

Women Entrepreneurs Can

NOVEMBER 19, 2022

Investors receive a healthy return on investment when the company reaches a liquidity event. Aside from providing funding, a venture capital firm can also help a company grow faster. VC funding is best suited for businesses with high growth potential. Pre-Seed Investments.

Venture Capital 52

Venture Capital Early Stage Startup Seed Stage 52

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. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Entrepreneur 120

Entrepreneur Accredited Investor Angel Investor Startup 120

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.

Early Stage 157

Early Stage Preferred Stock Warrant Common Stock 157

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 Angel Groups Due Diligence Angel Investor 76

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.

Entrepreneur 274

Entrepreneur Cofounder Hockey Stick Founder 274

Berkonomics

SEPTEMBER 19, 2013

The liquidity event and beyond' Others, often serial entrepreneurs, will carefully think out the experience and vow not to repeat it, creating an intellectual advantage over others making their run in the establishment of a new venture.

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Liquidity Event Angel Investor Entrepreneur Startup 81

Berkonomics

SEPTEMBER 5, 2013

The liquidity event and beyond' Have you documented your position so a successor would know not only what you do but enough of how it is done to perform necessary functions early on?

Liquidity Event 73

Liquidity Event Employee Conversion Management 73

Berkonomics

OCTOBER 28, 2021

And we look to see if the size projected is large enough to interest us as investors, since that is directly proportional to the ultimate value of the company in a liquidity event.

.Net 62

.Net Liquidity Event Entrepreneur Differentiation 62

Steve Blank

JULY 15, 2010

Number of Venture Backed Liquidity Events 1991-2000. Number of Venture Backed Liquidity Events 2000-2010. During the decade between 1991 and 2000, nearly 2000 venture backed companies went public. Take a look at the chart below. (It It includes venture funded startups in all industries, from software to biotech.

Entrepreneur 286

Entrepreneur Venture Capital IPO Startup 286

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.

Venture Capital 253

Venture Capital Startup Equity Angel Investor 253

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.

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Vesting Venture Capital Liquidity Event Business Model 197