Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Startups are usually founded by product or service experts who don’t enjoy the various growth phases. The founder succession dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Steve Blank

JANUARY 22, 2014

Success depends on finding startups that have identified acute customer pains in large markets where conditions are ripe for a new entrant. as a distribution channel have vastly reduced the amount of capital a startup needs at the early stage when the risk is greatest. Part 2: Early-stage Regional Venture Funds. ——-.

Early Stage 286

Early Stage Silicon Valley Oregon Technical Review 286

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. Retain the right to reclaim stock from anyone leaving the startup. Accelerate your own vesting if pushed out or the startup is acquired.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. So, co-management is the second group to share in the bounty upon a liquidity event. That risk deserves reward if there is a profitable sale or even an initial public offering, rare as that event is. Three: Outside investors.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Startup Professionals Musings

JULY 19, 2013

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Startups are usually founded by product or service experts who don’t enjoy the various growth phases. The Founder succession dilemma.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Startup Professionals Musings

MAY 28, 2013

However, making no projections, or non-credible projections will get your startup marked as unfundable. The rules are obviously not absolute, but you must be prepared to explain to potential investors why your startup is the exception to these guidelines: Five-year financial projections are the norm. Build a path to 10x return.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Startup Professionals Musings

JUNE 6, 2016

Startups don’t last forever -- they either mature into sustainable businesses, get merged into another business or acquired, or sadly join the 50 percent or more that fail in the first five years. Almost every startup has multiple founders, with complementary skills. Look at yourself objectively, and analyze where you fit best.

Liquidity Event 120

Liquidity Event Startup Angel Investor Entrepreneur 120

Steve Blank

APRIL 10, 2019

VC’s have just changed the ~50-year old social contract with startup employees. In doing so they may have removed one of the key incentives that made startups different from working in a large company. For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

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. I recently saw a startup projecting $50 million in revenue for the first year. Show a liquidity event and investor return at the end of the period.

Liquidity Event 120

Liquidity Event Startup Initial Public Offering Equity 120

Gust

DECEMBER 1, 2011

What is a startup really? I don’t fault entrepreneurs for relegating startup legal work to the bottom of their daily triage list; founders are spread incredibly thin. For starters, let’s examine the question of who, when and what: Who : Find and engage an experienced startup lawyer.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Startup Professionals Musings

FEBRUARY 13, 2016

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. Name the three top ones, and present your sustainable advantage as well as barriers to entry for new startups.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

View from Seed

MAY 19, 2015

Over the past few years, I have been involved with and close to a number of both successful and unsuccessful startups. A startup is just that – a startup. A flourishing startup requires investing equity in others to generate substantial return. The beauty of a startup is that there are endless possibilities.

Seed Stage 120

Seed Stage Liquidity Event Cofounder Startup 120

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. Retain the right to reclaim stock from anyone leaving the startup. Accelerate your own vesting if pushed out or the startup is acquired.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

David Teten

MARCH 14, 2018

I’ve listed a few more below which require meaningful startup and ongoing costs. VC is a “get rich slow” business, because most VC Partners will not see a carry check for 5-10 years, after waiting for both liquidity events and for LPs to be paid first. For more, see the Startup Studio Playbook.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

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

Hunter Walker

MARCH 8, 2014

If you’re graduating this spring and starting a career in tech, I’ve got one piece of advice: go work at a midstage startup (I’ll define that as B/C rounds of financing – eg Twilio, Stripe, Airbnb, Warby). Growth Creates Opportunity : Midstage startups are still very much under-resourced and expanding.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134

Berkonomics

MARCH 9, 2017

I read several years ago, that the average startup restaurant lasts only about a year. Restaurant startups would not top my list. Attempting to get to the number of real failures for all startups, not just those with angel group investments, Fortune Magazine published an article claiming that 90% of these startups do fail.

Angel Investor 106

Angel Investor Angel Groups Liquidity Event Early Stage 106

Berkonomics

APRIL 20, 2023

But… I read several years ago that the average startup restaurant lasts only about a year. Restaurant startups would not top my list. And this includes all businesses, not just startups. Although these are not parallel studies or similar statistics, most seem to refute Fortune’s claim that 90% of all startups fail.

SBA 62

SBA Angel Investor Early Stage Liquidity Event 62

Startup Professionals Musings

FEBRUARY 3, 2010

By Bob Arciniaga In developing the content for this article, it was very apparent this advice is not only critical for startups but for most companies. The suggestions are even more vital in a startup environment with constrained resources. Most quality advisors know that chances of a liquidity event are rare.

Advisory Board 225

Advisory Board Startup Liquidity Event Stock 225

Startup Professionals Musings

JULY 27, 2018

First to market” is not sustainable with normal startup resources. Discussion of likely liquidity events and exit strategy. Patents, trade secrets, and trademarks are very attractive to investors, since these are not easily overcome by competitors. Customized marketing strategy and realistic sales plans. “If

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

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. Before we dive into managing cap tables for startups, let’s define what they are. Can we be real? That’s a long list.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Startup Professionals Musings

DECEMBER 14, 2014

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Startups are usually founded by product or service experts who don’t enjoy the various growth phases. The Founder succession dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Startup Professionals Musings

AUGUST 17, 2014

However, making no projections, or non-credible projections will get your startup marked as unfundable. The rules are obviously not absolute, but you must be prepared to explain to potential investors why your startup is the exception to these guidelines: Five-year financial projections are the norm. Build a path to 10x return.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

YoungUpstarts

MARCH 11, 2015

Startup companies are often cash poor and have little in the form of current monetary compensation to offer their employees. When does a startup company need a business valuation? Valuation is usually important for startup companies both for income tax requirements and accounting requirements.

Valuation 100

Valuation Stock Options CPA Merger 100

Steve Blank

JULY 15, 2010

VC’s invested their limited partners’ “risk capital” in a portfolio of startups in exchange for illiquid stock. Most of the startups they invested in either died by running out of money before they found a scalable business model or ended up in the “land of the living dead” by never growing (failing to Pivot.). Startup Lifecycle Today.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Steve Blank

JUNE 23, 2016

Disruptive innovations are coming from startups – Telsa for automobiles, Uber for taxis, Airbnb for hotel rentals, Netflix for video rentals and Facebook for media. Which brings us to the fourth reason it’s harder for large corporations to offer disruptive breakthroughs: startups. Startups are unencumbered by the status quo.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Startup Professionals Musings

AUGUST 19, 2017

Most entrepreneurs struggle with many startup founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Startups are usually founded by product or service experts who don’t enjoy the various growth phases. The founder succession dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Women Entrepreneurs Can

NOVEMBER 19, 2022

A Venture Capital Firm is a firm that invests in startups and early-stage companies. Investing in a startup company carries a high degree of risk, particularly at the early stage. One of the most common ways of investing in a startup is by leveraging the expertise of a venture capital firm. Pre-Seed Investments. Seed Rounds.

Venture Capital 52

Venture Capital Early Stage Liquidity Event SEC 52

Steve Blank

JULY 19, 2010

Every VC knows that the founding CEO is the individual you throw into the chaotic battle of a startup. They’re betting that the founding CEO can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup. Where’s My Liquidity Event.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Up and Running

DECEMBER 21, 2010

OK, doing a startup takes a whole lot of hard work, some vision, some luck. Getting one to go fast and generate millions of dollars with a big liquidity event, well, that’s gold. That’s the one-in-a-million win that makes the rest of us happy just to think about it.

Liquidity Event 80

Liquidity Event Startup Restful 80

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). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Startup Professionals Musings

AUGUST 7, 2015

Large and growing markets imply a high startup growth potential, with high odds of scaling and success. First to market” is not sustainable by a startup. Startup team strengths and domain experience. The entrepreneur needs to show a strategy for such an event, and a projected value and return to the investor.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 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. Invested Interests company early stage funding investors startup starup'

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

The Startup Lawyer

JUNE 9, 2010

A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. While a startup typically receives millions of dollars in a Series A, if too much of that $$$ flows guaranteed to the founders, various incentives get out of whack. Case Study.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

Early Growth Financial Services

JULY 23, 2014

Ever wondered what expanding your startup internationally entails? There are also integrated service providers and a collaborative environment of founders working toward the common goal of a liquidity event. Embassy in London, and Glenn McCrae, EGFS’ Chief Strategy Officer. Also, success likes company!

Liquidity Event 47

Liquidity Event Silicon Valley Startup Venture Capital 47

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Email readers, continue here…] Most VC’s look for a 10x opportunity – that is – a ten times increase in the valuation from investment to liquidity event.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Gust

AUGUST 10, 2014

However, making no projections, or non-credible projections will get your startup marked as unfundable. The rules are obviously not absolute, but you must be prepared to explain to potential investors why your startup is the exception to these guidelines: Five-year financial projections are the norm. Build a path to 10x return.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176