SoCal CTO

SEPTEMBER 27, 2011

In other words, the loss of compensation for the early employee as compared to market rate should be viewed as equivalent to the equity for that same dollar amount from an investor. The key in his approach is that equity compensation should be viewed the same way that you view investment.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Berkonomics

AUGUST 17, 2023

A personal story as an investor … [Email readers, continue here…] My very first investment as a professional angel was in a small startup where the entrepreneur’s vision fueled my imagination in the audio market niche where I had run a business in an earlier life.

Liquidity Event 118

Liquidity Event Stock Options Stock Audio 118

Berkonomics

AUGUST 6, 2020

Your brand and market recognition? 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. Would it be your intellectual property? Your skilled employees? Your distribution channel relationships?

Liquidity Event 62

Liquidity Event Intellectual Property IPO Equity 62

Startup Professionals Musings

AUGUST 10, 2019

The right time to jump is a function of favorable career, personal, and market circumstances. 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. The right time to start dilemma. The control and growth dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Up and Running

SEPTEMBER 19, 2017

So, even if it’s not perfect, get a viable product out into the market (and label it beta if you need to) prior to seeking PE funding. 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

Startup Professionals Musings

JULY 27, 2018

Here are the unique business elements that I expect to hear as a potential investor: Target market size and growth projections. Most investors won’t be interested unless you can show them a large market (billion-dollar opportunity), with a double-digit growth rate. First to market” is not sustainable with normal startup resources.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

Berkonomics

APRIL 20, 2023

years before a liquidity event (positive or negative.) Way above market investment returns. 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

SBA 62

SBA Angel Investor Early Stage Liquidity Event 62

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

Berkonomics

OCTOBER 28, 2021

The biggest mistake many corporate marketers, entrepreneurs and even investors make in the initial stages of planning – overstating the size of the (SOM) serviceable obtainable market. So, is your (SOM) serviceable obtainable market large enough? So, is your (SOM) serviceable obtainable market large enough?

Liquidity Event 62

Liquidity Event .Net Differentiation Entrepreneur 62

Women Entrepreneurs Can

NOVEMBER 19, 2022

Investors receive a healthy return on investment when the company reaches a liquidity event. They also look for a robust business model and product/market fit. In addition, a startup needs to demonstrate product-market fit. Seed funding is usually used to support product development, sales, and marketing.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

Berkonomics

SEPTEMBER 12, 2013

Your brand and market recognition? 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' Would it be your intellectual property? Your skilled employees?

Liquidity Event 76

Liquidity Event Intellectual Property IPO Equity 76

Steve Blank

JULY 15, 2010

The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Startup lifecycle in an IPO Market. Suddenly there was a public market for companies with limited revenue and no profit. Number of Venture Backed Liquidity Events 1991-2000. Here’s why.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Steve Blank

JUNE 23, 2016

Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). They’re better than large companies at identifying customer needs/problems and finding product/market fit by pivoting rapidly. Risk capital has provided financing for new ideas in the form of startups.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Startup Professionals Musings

DECEMBER 14, 2014

The right time to jump is a function of favorable career, personal, and market circumstances. 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. The right time to start dilemma. The control and growth dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Hunter Walker

MARCH 8, 2014

Your Work Will Matter : Past the point of product market fit, but before large company ossification. Instead of just concept mocks and ideas for marketing programs, you can get real data and feedback on your team’s efforts. Here’s why: 1. ” 2.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134

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. Overall, financial projections that make sense in your business domain, and cross-foot with available data from independent market analysts are no guarantee that you can deliver. Build a path to 10x return.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Startup Professionals Musings

DECEMBER 11, 2015

They don’t realize that knocking competitors is assessed as a weakness and denying that you have any competition suggests there is no market for your solution. Position your solution as broadening the market, not killing a competitor. Quantify your value over current market alternatives.

Intellectual Property 120

Intellectual Property Liquidity Event Exit Strategy Angel Investor 120

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.) That made sense. Today that’s less true.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

Startup Professionals Musings

FEBRUARY 13, 2016

Investors are looking for a concise description of your product or service without technical jargon or fuzzy marketing terms with value quantified in customer terms. How big and growing is the total market and your target segment? They like billion-dollar markets with double-digit growth rates.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Startup Professionals Musings

AUGUST 19, 2017

The right time to jump is a function of favorable career, personal, and market circumstances. 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. The right time to start dilemma. The control and growth dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Startup Professionals Musings

AUGUST 7, 2015

Here are the motivation elements that investors expect to hear: Size and growth potential of the market opportunity. Your customers don’t care if you are targeting a billion-dollar market and growing at double-digit rates, but investors will skip small or shrinking opportunities. First to market” is not sustainable by a startup.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

JUNE 6, 2016

Many ultimately struggle for five to 10 more years, before they achieve “overnight” success, or a liquidity event. They perform best when they are in maximum learn mode, taking new risks, and adapting to change in the market. Maybe it’s time to cash out now. Exit at your peak, rather than be pushed out.

Liquidity Event 120

Liquidity Event Startup Angel Investor Entrepreneur 120

Startup Professionals Musings

AUGUST 13, 2012

Industry & market sizing. Start with the evolution of the overall industry, market segmentation, market dynamics, and customer landscape. Data from accredited market research groups like Forrester or Gartner is required for credibility. Avoid any statements like “All we have to do is get 1% of the market.”

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Startup Professionals Musings

JULY 19, 2013

The right time to jump is a function of favorable career, personal, and market circumstances. 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. The right time to start dilemma. The control and growth dilemma.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Startup Professionals Musings

SEPTEMBER 7, 2015

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. Five-year revenues, based on your volumes and prices, should penetrate at least 10 percent of the target market segment. You shouldn’t invest in an undefined business.

Liquidity Event 120

Liquidity Event Startup Initial Public Offering Equity 120

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. Overall, financial projections that make sense in your business domain, and cross-foot with available data from independent market analysts are no guarantee that you can deliver. 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

Startup Professionals Musings

MAY 18, 2015

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. 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 120

Stock Vesting Common Stock Founder Vesting 120

Startup Professionals Musings

MAY 13, 2011

Industry & market sizing. Start with the evolution of the overall industry, market segmentation, market dynamics, and customer landscape. Data from accredited market research groups like Forrester or Gartner is required for credibility. Avoid any statements like “All we have to do is get 1% of the market.”

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

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. Forming business relationships at the highest level. Analyzing your commitments of time to business.

Balance Sheet 97

Balance Sheet Liquidity Event Government Restful 97

Berkonomics

MARCH 9, 2017

years before a liquidity event (positive or negative.) Way above market investment returns. You might be interested in this data as viewed from the early stage investor’s viewpoint. Again, quoting the ARI study, angel investors hold their average investment for 4.5

Angel Investor 106

Angel Investor Angel Groups Liquidity Event Early Stage 106

Berkonomics

AUGUST 20, 2015

The inciting incident in a movie is the event at the beginning of the story that causes the hero’s life to be completely transformed and irrevocably changed, and makes the whole story unfold. I thought of this in a recent liquidity event in one of my portfolio companies.

Liquidity Event 48

Liquidity Event Private Equity Valuation Equity 48

Berkonomics

SEPTEMBER 26, 2013

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' Both sides have to work to get a deal closed.

Due Diligence 85

Due Diligence Liquidity Event Intellectual Property SEC 85

Pascal's View

AUGUST 28, 2010

… Four of the twenty companies with the largest market capitalization in the U.S.—Microsft, capital markets for listed equities have been in systemic decline since 1997, while every other major international equity market has been growing. Microsft, Apple, Google, Cisco—have been funded by venture capital.”.

Venture Capital 56

Venture Capital America Initial Public Offering IPO 56

Gust

AUGUST 10, 2014

The only path to any return for equity investments is a liquidity event, like a merger or acquisition (M&A), or IPO. Overall, financial projections that make sense in your business domain, and cross-foot with available data from independent market analysts are no guarantee that you can deliver. Build a path to 10x return.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Steve Blank

MARCH 18, 2011

Dot.com Bubble ( 1995-2000): “ Anything goes” as public markets clamor for ideas, vague promises of future growth, and IPOs happen absent regard for history or profitability. They taught you about customers, markets and profits. The reward for doing so was a liquidity event via an Initial Public Offering.

Internet 334

Internet IPO Silicon Valley Agile 334

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. Perhaps you have decided to continue growing top line revenues at the expense of cash flow (EBITDA.)

Liquidity Event 48

Liquidity Event Ohio Acquisition Revenue 48