Up and Running

SEPTEMBER 19, 2017

For a business that anticipates needing, for example, $500,000 in startup capital, that means that best-case scenario Klemm can expect to give up half of his business’s common stock (and an even larger percentage of control of the business once the deal’s fine print provisions are considered).

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

OCTOBER 29, 2013

Here are the parameters you should use in sizing your request, and be able to explain in justifying your request to investors: Consider implied ownership cost. Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. Single or staged delivery.

Valuation 258

Valuation Early Stage Warrant Common Stock 258

www.inc.com

SEPTEMBER 24, 2011

But with the help of Grahams company, which specializes in creating tech systems for start-ups, Jumpstart grew to more than $50 million in revenue--enough to make it an attractive acquisition for media conglomerate Hachette Filipacchi. Theres a huge opportunity cost in not taking equity," he says. Graham was happy for his client.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Professionals Musings

SEPTEMBER 19, 2012

Here are the parameters you should use in sizing your request, and be able to explain in justifying your request to investors: Consider implied ownership cost. Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. Single or staged delivery.

Valuation 236

Valuation Early Stage Warrant Common Stock 236

Startup Professionals Musings

JULY 8, 2011

Here are the parameters you should use in sizing your request, and be able to explain in justifying your request to investors: Consider implied ownership cost. Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. Single or staged delivery.

Entrepreneur 234

Entrepreneur Valuation Early Stage Warrant 234

Startup Professionals Musings

JUNE 9, 2010

Here are the parameters you should use in sizing your request, and be able to explain in justifying your request to investors: Consider implied ownership cost. Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. Calculate what you need.

Valuation 227

Valuation Early Stage Warrant Startup 227

Scott Edward Walker

OCTOBER 19, 2020

Unfortunately, I was involved in such a scenario a few years back, and it cost the founders a lot of money to get the prior employer to agree to execute a waiver. The nightmare scenario for founders is that they are heads-down and working on their startup for a number of years and finally get some headlines on a successful financing or exit.

IP 40

IP Software Review Founder Technical Review 40

Startup Company Lawyer

MAY 4, 2009

Startup companies consume resources intelligently, put people to work in efficient ways, and produce market driven products at lower costs. The application fee is $50, which only partially offsets costs associated with processing applications. What are common planning mistakes and how do you to avoid them? How to grow it.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Tim Keane

JANUARY 12, 2010

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model.   It is very expensive if you’re the entrepreneur since it doubles the cost to the company of paying dividends to the entrepreneur.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

ReadWriteStart

JANUARY 28, 2022

The market regards equity as an ownership “share” in a corporation’s income revenue stream. Common stock. The holding of common stock in a company indicates ownership in the corporation. Investors of common stock are eligible for : The choice of the Board of Directors.

Valuation 108

Valuation Equity Warrant Common Stock 108

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. Some VCsnow require that in any sale they get 4x their investment backbefore the common stock holders (that is, you) get anything, butthis is an abuse that should be resisted. Theres only common stock at this stage.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Gust

SEPTEMBER 17, 2014

Revenue multiple? There are a million ways to do quick, easy, low-cost rounds with prices. If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. They already locked in stock at a lower price. Your A round? Him: On metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

DECEMBER 8, 2011

Enter into agreements between Newco and founders, early contributors, outside advisors or service providers under which they contribute or assign all intellectual property related to the company’s business to Newco in exchange for the issuance of founders’ stock (Common Stock). Make escrow arrangements for restricted stock (i.e.,

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Agile VC

FEBRUARY 2, 2012

How They Make Money : Facebook’s primary revenue stream is of course selling advertising on Facebook.com, which in total accounts for 85% of revenue. The next chunk comes from Facebook’s platform, in essence “taxing” the revenues of app developers like Zynga, which represents 15% of revenue.

IPO 100

IPO South Korea Venezuela Revenue 100

Berkonomics

APRIL 14, 2012

Others worry that investors will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements. That is one of the many costs of becoming a public entity as many CEO’s have found and dealt with over the years.

Stock Options 81

Stock Options Balance Sheet Stock Common Stock 81

Lightspeed Venture Partners

OCTOBER 1, 2012

On the other hand, a 7% royalty means that Kevin and Barbara got to keep 93% of future revenues. in sales but made only $20k in profit, despite not having any advertising costs. The product retails for $39.95, wholesales for $19.95, and costs just $5 to make. Last year it did $3.9M

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

ithacaVC

SEPTEMBER 20, 2011

A whole cottage industry popped up, and the cost of a valuation is typically $4-8K. Let’s say a given company has raised $15mm in VC funding and is generating about $3mm in revenue and starting to ramp up quickly. Furthermore, it is in an industry where M&A transactions typically happen in the 3-4X revenue range.

Liquidation Preference 49

Liquidation Preference Common Stock Stock Options Valuation 49

Berkonomics

APRIL 4, 2019

Others worry that we will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements. That is one of the many costs of becoming a public entity as many CEO’s have found and dealt with over the years.

Stock Options 48

Stock Options Balance Sheet Stock Common Stock 48