Berkonomics

OCTOBER 3, 2013

Because deal rooms have multiple applications, the best advice is to begin the process right after incorporation and make keeping it current a continuing job of your financial senior management. The liquidity event and beyond'

Software Review 76

Software Review Due Diligence Liquidity Event Intellectual Property 76

Berkonomics

JANUARY 7, 2021

How many of them, particularly in technology, were able to start a company, supply all the funding, and share no management tasks or equity with others, and still grow the company to any significant size, worthy of a multi-million-dollar opportunity to cash out at exit? Two: Co-management. Three: Outside investors.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Berkonomics

MARCH 9, 2023

Most of us work in our businesses, either as managers or owners, and rarely step outside to think about how this will end in a perfect world. If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? It is a fair question to ask.

Liquidity Event 62

Liquidity Event Valuation Email Management 62

Berkonomics

AUGUST 10, 2023

We know why investors “join” your company… So be aware that professional investors are in your company for the eventual large profits at the liquidity event. They tolerate you and your management when the numbers are a bit murky but with an explanation that is believable and correctable.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

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. Manager or Junior Engineer 0.2 – 0.33 Lead Engineer 0.5 – 1 5+ years experience Engineer 0.33 – 0.66 It's important to note that this is all post Series A.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

David Teten

MARCH 14, 2018

Managers of VC funds typically want to grow their business aggressively, just like the founders we back. This is a model used in at least one case by China’s third-largest private equity firm, China Science & Merchants Investment Management Group ($12 billion+ AUM), which funded in 2015 CSC Upshot, a $400m seed fund through AngelList.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Board Effect

MAY 13, 2019

Let’s not waste time listing everything startups could be doing to more effectively manage their cap tables. When it comes to cap table management in startup companies, it’s unrealistic to expect perfection. The realistic demands of cap table management will increase as your business grows and matures—that much is a no-brainer.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Startup Professionals Musings

AUGUST 10, 2019

Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, angels, and VCs. The right motivated employees dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Berkonomics

JANUARY 5, 2023

Dual layers of senior management remain only during the transition period and transfer of institutional knowledge from acquired to acquirer. R&D efforts may remain separate for a period or forever, but R&D management is consolidated as soon as possible to avoid territorial disputes and retention of inefficient development processes.

Acquisition 62

Acquisition .Net Retention Sales 62

Berkonomics

FEBRUARY 23, 2017

Most of us work in our businesses, either as managers or owners, and rarely step outside to think about how this will end in a perfect world. If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? It is a fair question.

Liquidity Event 102

Liquidity Event Valuation Email Management 102

Women Entrepreneurs Can

NOVEMBER 19, 2022

Investors receive a healthy return on investment when the company reaches a liquidity event. Xfund, Patrick Chung is a managing general partner in a venture capital firm that supports lateral thinkers. Management Company. The venture capital firm is split into two components: a management company and a fund.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

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. This could be our intellectual property, our geographic reach, our superior product, our management team, or perhaps our dominant position. So, that’s the reason for this insight.

Liquidity Event 48

Liquidity Event Intellectual Property Naming Acquisition 48

Up and Running

SEPTEMBER 19, 2017

Background: Justin Klemm’s analytics and website uptime startup, Ghost Inspector , wants to revolutionize the way businesses manage their ecommerce funnels. Private equity investments are an important part of many startup business’s plans for accelerating growth or providing founders with a liquidity event. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Berkonomics

JUNE 12, 2014

It is rare when one person starts a company, supplies all the funding, and shares no management tasks or equity with others, and still grows the company to any significant size, worthy of a multi-million dollar opportunity to cash out at exit. So co-management is the second group to share in the bounty upon a liquidity event.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Early Growth Financial Services

JULY 10, 2014

One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets. 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.

Liquidity Event 41

Liquidity Event Management Stock Options Founder 41

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. Management carve-out (if any). Management carve-out (if any). 2) Secured creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Steve Blank

JULY 19, 2010

The customary vesting model has founders vest their stock over 4-years , and when the founding CEO gets in over their head the VC’s bring in professional management. They’re hoping they funded a CEO who can manage chaos and uncertainty, is biased for action and isn’t waiting around for someone else to tell them what to do.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Startup Professionals Musings

DECEMBER 14, 2014

Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, Angels, and VCs. The right motivated employees dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Hunter Walker

MARCH 8, 2014

There aren’t yet four layers of management between you and the founders. 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

Steve Blank

JULY 15, 2010

Number of Venture Backed Liquidity Events 1991-2000. This changed their interest from managing your board for their liquidity to managing the board for all shareholders. Number of Venture Backed Liquidity Events 2000-2010. Take a look at the chart below. (It Source: NVCA.).

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

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

Startup Professionals Musings

JUNE 6, 2016

Very few startup founders even want to stick around for the long haul, since their passion and expertise is in creating a new business, not managing people issues and repeatable processes. Some entrepreneurs are leaders, others are good managers and still more are happy to be the do-ers. Maybe it’s time to cash out now.

Liquidity Event 120

Liquidity Event Startup Angel Investor Entrepreneur 120

Berkonomics

JULY 5, 2018

Then again, you may be an architect or doctor or other professional managing your. Email readers, continue here…] All businesses and their management should be aware and perhaps planning for the end game, and that includes boards of directors as well. Dave’s book on exits. See [link] or amazon for this and more from Dave.

Intellectual Property 90

Intellectual Property Management Stock Options Stock 90

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. Of course, the quality of your management team, or demonstrated performance in prior similar ventures, can override any or all of these rules of thumb. Build a path to 10x return.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Startup Professionals Musings

AUGUST 19, 2017

Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, angels, and VCs. The right motivated employees dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). For those of you who fit that description, nice work.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

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. Limit board seats and manage member selection criteria. This situation only can be prevented by incorporating early, avoiding negative tax situations and managing your shares like gold.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Professionals Musings

JULY 19, 2013

Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, Angels, and VCs. The right motivated employees dilemma.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Berkonomics

AUGUST 27, 2020

Because deal rooms have multiple applications, the best advice is to begin the process right after incorporation and make keeping it current a continuing job of your financial senior management. The payoff. The post What’s a “data room” and how do you use it? first appeared on BERKONOMICS.

Software Review 62

Software Review Due Diligence Intellectual Property IPO 62

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. Of course, the quality of your management team, or demonstrated performance in prior similar ventures, can override any or all of these rules of thumb. Build a path to 10x return.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Berkonomics

SEPTEMBER 19, 2013

It is up to management to scale the development, marketing and production based upon resources available. The liquidity event and beyond' Most failed entrepreneurs blame undercapitalization for the cause of the failed business. Investors do not like to hear this excuse, even if absolutely true. Any business can use more money.

Liquidity Event 81

Liquidity Event Angel Investor Email Entrepreneur 81

Berkonomics

JUNE 15, 2017

So be aware that professional investors are in your company for the eventual large profits at the liquidity event. They tolerate you and your management when the numbers are a bit murky but with an explanation that is believable and correctable. They are your friends only as long as you meet or exceed planned growth and value.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Berkonomics

SEPTEMBER 5, 2013

Such thoughts just do not occur to most of us until the business is substantially far enough along in its growth to have multiple layers of management and enough employees and stakeholders that there is a board of directors and calls for key man insurance and succession planning. The liquidity event and beyond'

Liquidity Event 73

Liquidity Event Employee Conversion Management 73

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. And you’re working just as hard.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

Berkonomics

DECEMBER 28, 2017

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. 15% typically is spent on direct management issues such as supervision of next level subordinates.

Balance Sheet 97

Balance Sheet Liquidity Event Government Restful 97

Pascal's View

MARCH 12, 2010

The VC fund may have one managing partner that sets the tone and controls the entire firm, or it may have a collegial distribution of governance among several senior partners. The VCs want capital efficiency, which means they want management to do more with less. Share and Enjoy:

Government 28

Government Portfolio Technical Review Due Diligence 28

Berkonomics

JUNE 2, 2010

I discovered the power of employee feelings of ownership early in my management career, establishing an employee stock ownership plan (ESOP), once popular as incentive compensation as well as a tax write-off for corporations and even a way to slowly transfer ownership of a company from the founders to the employees.

Liquidity Event 86

Liquidity Event Stock Options IPO Stock 86