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An economics lesson for growing companies

Berkonomics

Venture or angel-financed companies with plenty of working capital sometimes are immune to this working capital need for some time into their growth, but at some point, it will become clear that the cheapest form of finance is not equity in a growing enterprise. It may not be equity.

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VC Seed Funding Example: Trada

Feld Thoughts

My partner Seth Levine has a detailed post up today titled Trada – from the beginning that describes the creation and financing of Trada. Tags: Seed Financing angel financing Foundry Group seed trada VC. The meat of the funding story follows: “Of course coming up with the idea is the easy part.

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Startup Strategy Roundtable: Top 10 Tech Trends To Watch

ReadWriteStart

The company is profitable and has so far raised only $400,000 in friends and family and angel financing. At this point, he can grow organically and leverage channel partners and other creative modes of non-equity financing and preserve equity as much as possible. Jimmy asked if he should be raising money at this point.

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Strategy Roundtable For Entrepreneurs: Crowd Sourced Funding Exchanges - An Emerging Trend

ReadWriteStart

Earlier, of course, we covered AngelList at length , also a crowd sourcing venture in the angel financing space, and this week, we have covered SecondMarket , which is powering Facebook's private market capital raising. Andrew also asked how he could partner with the 1M/1M program. peerbackers.

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What Should You Do with Your Crappy Little Services Business?

Both Sides of the Table

The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners. Angel financing – just because VCs won’t back this kind of business doesn’t mean angels won’t. That is $12 million in profits over 3 years.

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Growth requires a different kind of capital.

Berkonomics

Venture or angel-financed companies with plenty of working capital sometimes are immune to this need for some time into their growth, but at some point it will become clear that the cheapest form of finance is not equity in a growing enterprise.

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How do the sample Series Seed financing documents differ from typical Series A financing documents?

Startup Company Lawyer

I was actually somewhat surprised that the following investors have agreed to use the Series Seed documents in certain of the their deals: Baseline, Charles River Ventures, SV Angel (Ron Conway), First Round Capital, Harrison Metal Capital, Mike Maples, Polaris Venture Partners, SoftTech VC and True Ventures. Voting agreement.

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