View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1. And as my partner Rob Go likes to say, “Time kills all deals.”).

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Startup Professionals Musings

SEPTEMBER 14, 2010

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. However, there is no set pattern of terms an entrepreneur might be able to anticipate from an angel, either. Marty Zwilling.

Term Sheet 227

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

David Teten

OCTOBER 1, 2015

I’ve seen a range of options for supporting entrepreneurs, which I can rank from least to most involvement in companies by investors: financier VCs, e.g., Correlation Ventures. Most firms that do decide to take equity do so because their risk is far reduced when compared to that of the entrepreneur, or that of the traditional cash investor.

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Both Sides of the Table

MAY 13, 2013

And a few teams of super talented, educated and bright entrepreneurs make a few mill. I look for entrepreneurs who set out on their journeys to do exactly that – build big businesses. I don’t blame entrepreneurs who go for an early exit when it comes up. in their 20′s. What could be more capitalist than that?

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 158

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

Genuine VC

JULY 30, 2012

In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: Lower than “market.” This approach is almost never a good idea. By definition, all entrepreneurs should think that their endeavor is truly exceptional. Above market.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

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

However, for many successful entrepreneurs, weighing all of the personal and financial issues that go into this decision can be gut-wrenching. Each one can provide valuable lessons to the entrepreneur. Negotiating a different deal structure could have prevented the price from dropping. Here are a few to consider.

IPO 162

IPO San Francisco Exit Strategy Startup 162

Both Sides of the Table

SEPTEMBER 23, 2010

I thought I’d try to look at it from a different lens, that of the entrepreneur. As an entrepreneur you should assume that. So what is an entrepreneur to do? I sometimes ask entrepreneurs. We discuss deal structures. But I do the same thing with entrepreneurs and I do it publicly on This Week in VC.

Entrepreneur 292

Entrepreneur Technical Review Valuation Stealth 292

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

VC Cafe

SEPTEMBER 6, 2011

I could write a whole post on the 7-D model students follow (and I probably will) but I’d like to focus on a lecture at the end of the course, by a UK-based angel investor, who provided tips for entrepreneurs to make their company attractive for an angel. Do your research on the angel and explain why you want him/her specifically.

Startup 133

Startup Cofounder Warrant Stock Options 133

Tim Keane

AUGUST 20, 2009

Who the entrepreneur takes money from (see this post ) is always more important than the terms. "  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    If the entrepreneur can bootstrap.

Milwaukee 60

Milwaukee Bootstrapping Cram Down Deal Structure 60

Growthink Blog

FEBRUARY 15, 2010

Among other impressive accomplishments, Louis is the author of "Selling Your Business: The Transition from Entrepreneur to Investor." Specifically, Louis is an expert on helping entrepreneurs realize their financial dreams by selling their businesses and investing their proceeds wisely. Which are the most favorable to the entrepreneur?

Intellectual Property 54

Intellectual Property Deal Structure LLC Stock 54

Hunter Walker

MAY 18, 2015

We triangulate with investors, entrepreneurs and large company operators to assess probability of success and ability to attract in-demand entrepreneurs. 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

David Teten

MAY 20, 2013

As an entrepreneur, you can identify un-monetized or under-monetized domain names, and then approach the owner with your startup idea. I mentioned earlier World Accelerator.com , a unique accelerator program which helps entrepreneurs build value on top of premium domain names. VentureCamp.com is another roughly similar program.

Naming 114

Naming Startup Venture Capital Portfolio 114

David Teten

MAY 20, 2013

As an entrepreneur, you can identify un-monetized or under-monetized domain names, and then approach the owner with your startup idea. I mentioned earlier World Accelerator.com , a unique accelerator program which helps entrepreneurs build value on top of premium domain names. VentureCamp.com is another roughly similar program.

Naming 114

Naming Startup Venture Capital Portfolio 114

Gust

OCTOBER 5, 2011

This paragraph is the heart of the whole deal. 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. On to more specific terms next week.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

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 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

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. ” Gary Messiana, Bessemer Entrepreneur-In-Residence and former CEO, Netli.

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. Who Gets Shot" and Other Poor Management Ideas | GrasshopperHerder.com on Top 3 Ways to Fail at Customer Development What can be done to make tech entrepreneurs as attractive to girls as rockstars and sport stars?

Sweat Equity 41

Sweat Equity Equity Cofounder Non-Compete 41

A Smart Bear: Startups and Marketing for Geeks

JUNE 27, 2011

Most entrepreneurs would love to be in a position to have to decide! You’re skipping a step — trying to decide if the deal is even plausible — but how can you decide that if all you’re doing is thinking about the other side? Type-A workaholics like me (and most successful entrepreneurs?) At what price?

Sales 235

Sales Term Sheet Stock Deal Structure 235

Entrepreneurs-Journey.com by Yaro Starak

JANUARY 21, 2011

Sunil contacted me asking if he could apply to become a columnist on Entrepreneurs-Journey. I asked him what are the highlights of his “career&# as an entrepreneur so I could be confident in his credibility and he had stories to tell that we could all learn from. It turns out Sunil has done a few things.

Internet 78

Internet Technical Review Stock Due Diligence 78