David Teten

JANUARY 21, 2021

Purpose Ventures’ deal structures are bespoke to each company. We have invested using demand dividends (such as here ), redeemable shares (such as here / here ), revenue-share investing, and conventional debt/mezzanine structures.

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

JANUARY 27, 2012

It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 223

YoungUpstarts

MAY 14, 2018

To safeguard your team from getting emotionally over-committed to a specific business, carefully balance the price being offered for the target, the strategic problem or opportunity it addresses, the likely near-term cash flow of the target, the integration strategy, the inherent risks and the deal structure.

Acquisition 124

Acquisition Finance Raleigh Mezzanine 124

Startup Professionals Musings

SEPTEMBER 14, 2010

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Feld Thoughts

JANUARY 2, 2012

In the fall of 2010 Mahendra Ramsinghani reached out to me by email about a new book he was working on called The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies. I made a pile of intros and didn’t think much more of it.

Venture Capital 136

Venture Capital Exit Strategy Angel Investor Deal Structure 136

View from Seed

OCTOBER 21, 2014

As a funding conversation progresses from initial to subsequent meetings, the topics of round structure and pricing become much more natural. Additionally, a good investor relationship is born out of fundamental, mutual interest in the startup itself, not the deal structure.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Gust

OCTOBER 17, 2011

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 158

Duct Tape Marketing

FEBRUARY 16, 2023

Let's talk about some of the deal structures you've seen. There has to be some detectable amount of profit that this person is gonna enjoy beyond the value of the time they put in after they've made all the payments to the bank. 09:23): Sure.

Technical Review 91

Technical Review Non-disclosure Agreement Wisconsin Salary 91

Both Sides of the Table

MAY 13, 2013

And on many occasions I have passed on deals where it was clear that the founding team was over-optimizing the deal structure to focus on a quick exit. I look for entrepreneurs who set out on their journeys to do exactly that – build big businesses. Change industries. Not looking for quick flips.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Start Up Blog

MARCH 24, 2015

And it’s licensing deal structures born of the late 1970’s cable TV era that create this back door leakage. Now they won’t share any of the potential advertising revenue or other prizes which come from direct customer relationships. The back door has been opened.

Global 48

Global Internet Australia Deal Structure 48

VC Adventure

OCTOBER 8, 2012

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Seemed like a good topic to cover here.

Cap Table 93

Cap Table Dilution Equity Deal Structure 93

YoungUpstarts

NOVEMBER 13, 2012

Negotiating a different deal structure could have prevented the price from dropping. Despite the success, there was one valuable lesson to be learned here. Facebook’s stock fell precipitously before the close and the offer was ultimately worth only $741 billion. Unique social networking product. Rapidly growing market.

IPO 162

IPO San Francisco Exit Strategy Startup 162

YoungUpstarts

MAY 9, 2019

By the same token, using a competent accountant for tax advice can help you maximize the deal structure to limit your tax exposure and maximize the cash potential in the sale. Like attorneys, you don’t want to skimp on tax advice either! A top-tier accountant will pay for themselves in helping you plan for your windfall.

Private Equity 113

Private Equity Equity Investment Bankers Government 113

Genuine VC

JULY 30, 2012

Of course, as a funding conversation progresses from an initial to subsequent meetings, the topic of round structure and pricing become much more natural. A good investor relationship is born out of fundamental mutual interest in the startup itself, not the deal structure.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndication 136

The Startup Lawyer

AUGUST 23, 2010

But remember that while a lot of these deal structures are standard — each individual deal is unique. From the investor’s perspective, they don’t want the round to extend forever and let subsequent investors get in on the same terms several years from now.

Finance 70

Finance Deal Structure Sales Startup 70

VC Cafe

SEPTEMBER 6, 2011

Deal structure – I could write a full post just on this, but some aspects that were brought up are the need to agree on a reasonable valuation, what investment vehicles are used (convertible debt vs stock, options and warrants and other non-dilutive mechanisms). What experience or contacts are they bringing to the table?

Startup 133

Startup Cofounder Warrant Stock Options 133

Scott Edward Walker

AUGUST 22, 2011

prAYlf Quora-Related Quora: What deal structure should be in place for a friend/family investment of < 20k in your startup? .” - @mcuban on.wsj.com/q1v3Uk When to Make the First Offer in Negotiations – interesting post via Professor Galinsky (from 2004) bit.ly/p2Pkk0 ” -Paul Graham bit.ly/prAYlf

Redemption 45

Redemption Silicon Valley Deal Structure RSS 45

David Teten

OCTOBER 1, 2015

I’ve been looking for suggestions for an initial deal structure that is appropriate for the theoretical case of a trusted dev shop putting in $100k in market-value of services over a 6 month period in time. What are the terms of their relationship with the founder?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

VC Adventure

OCTOBER 8, 2012

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Seemed like a good topic to cover here.

Cap Table 48

Cap Table Dilution Equity Deal Structure 48

Scott Edward Walker

DECEMBER 13, 2018

How is the Deal Structured? The deal is typically structured as an asset purchase (as opposed to a stock purchase or merger) — though the acquirer often does not actually want the startup’s IP and/or other assets. The appeal from the startup’s perspective is a “soft landing.”.

Founder 45

Founder Merger IP Liquidation Preference 45

Tim Keane

AUGUST 20, 2009

Ask any of us who've experienced significant down rounds based on some or all of these things, and one begins to understand the cautionary nature of deal structures.  When there is the prospect of future rounds, sometimes evidenced by misses in the past, deal structures become more caution-driven.

Milwaukee 60

Milwaukee Bootstrapping Cram Down Deal Structure 60

Growthink Blog

FEBRUARY 15, 2010

What are the main types of deal structures when selling your business, such as selling for all cash or for all stock? Other key questions that Louis answered for me included: - When deciding to sell your company, who should be on your professional advisory team and when should you start building that team? How common are each?

Intellectual Property 54

Intellectual Property Deal Structure LLC Stock 54

Jeff Hilimire

MARCH 4, 2014

It’s easy to get caught up in the dollar signs and deal structure and overlook this important step in the process. Understand the process before you start. It’s always going to take longer than you thought and knowing the steps can help you prepare.

Private Equity 61

Private Equity Acquisition Deal Structure Sales 61

Hunter Walker

MAY 18, 2015

Similarly, a GP might be in the middle of great flow, but we need to have conviction that they can identify the right deals, structure creatively, and negotiate effectively. Given the abundance of capital in today’s market, we want to feel that an entrepreneur will pick this team to sit with at the table.

LP 48

LP Portfolio Early Stage Institutional Investors 48

Gust

OCTOBER 26, 2011

Having come to the end of our overview series, I’ll discuss some of the pros and cons of different deal structures, more recent innovations such as Series Seed documents, and other variations in future posts.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

Gust

OCTOBER 5, 2011

With this deal structure, the angel is relying on the Series A investors to negotiate fair terms of the Preferred Stock that he or she will ultimately receive in the conversion, but has no opportunity to directly negotiate those terms.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

OCTOBER 21, 2011

Having covered just about every path a convertible note can take, we’ll finish up the series by looking at a few miscellaneous term sheet items and revisiting the pros and cons of different deal structures.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

David Teten

MAY 20, 2013

If we find the right partner, we can be flexible in deal structures to best align everyone’s interests. Like a VC, we want to see a leadership team with vision and the ability to execute and a strong plan for the brand. We have demonstrated this model can and does work with repeated success.

Naming 114

Naming Startup Venture Capital Portfolio 114

David Teten

MAY 20, 2013

If we find the right partner, we can be flexible in deal structures to best align everyone’s interests. Like a VC, we want to see a leadership team with vision and the ability to execute and a strong plan for the brand. We have demonstrated this model can and does work with repeated success.

Naming 114

Naming Startup Venture Capital Portfolio 114

K9 Ventures

OCTOBER 10, 2017

Q: How are most Pre-Seed deals structured? Most professional/seasoned investors don’t like convertible instruments of any form. I’ve written about this on the K9 Ventures blog. Mark Suster has written about this.

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Both Sides of the Table

SEPTEMBER 23, 2010

We discuss deal structures. We discuss things like what the general prices in the market are but not in a price fixing way but in a general commentary way, like “I can’t believe that guy paid 40 pre!&# kind of way. Often it’s to try and persuade people that we’ve found the right model.

Entrepreneur 292

Entrepreneur Technical Review Valuation Stealth 292

Hunter Walker

JULY 4, 2023

So if I do the deal with Vitamin Water, I don’t really need the money up front. And it changed the way artists look at deal structures. Because until those stages, they were not looking to do deals like that. The big money, on the back end when they sell it, I need to participate in that.

Texas 69

Texas Jordan Deal Structure Washington 69

Cracking the Code

OCTOBER 10, 2008

As all good sales VPs will tell you, the compensation plans of the sales team will drive behavior, so it is critically important that you structure the sales and account management plans to align with the key metrics of your business: CMRR, Churn, and Cash flow.

Software Review 48

Software Review North America Europe Metrics 48

grasshopperherder.com

SEPTEMBER 24, 2011

Not that they were trying to take advantage of me necessarily, but it happened because of the deal structure. In a couple of cases the other person actually made out with a fair bit of cash and I got screwed. You have a few more years experience than I so thanks for the heads up of further potholes to avoid going forward.

Sweat Equity 41

Sweat Equity Equity Cofounder Non-Compete 41

A Smart Bear: Startups and Marketing for Geeks

JUNE 27, 2011

One of the best ways to arm yourself going into negotiations is to know this number and be prepared to blow up the entire deal if it cannot be met. That means you have to be that sure that that’s the number, regardless of deal structure. They know there’s a minimum valuation, under which you’re not interested.

Sales 235

Sales Term Sheet Stock Deal Structure 235

Entrepreneurs-Journey.com by Yaro Starak

JANUARY 21, 2011

Investment in small businesses require knowledge of transactions and the related aspects such as business valuation, due diligence, deal structuring / financing, contracts, etc. Although I knew I would be working in (not on) the business to some extent, the work turned out to be more than I anticipated, at least initially.

Internet 78

Internet Technical Review Stock Due Diligence 78