Berkonomics

MARCH 21, 2019

If you are a going business with a track record of revenues, then the importance of accurate current financial statements cannot be overstated. If there is no record of revenues, see the “The Berkus Method” available with any search query for valuing the business before revenues. Remember your employee option allocation.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Steve Blank

JUNE 23, 2016

Intel under their last two CEOs delivered more revenue and profit than any ever before. Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). Second, the leaders of these companies tended to be those who excelled at finance, supply chain or production.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Steve Blank

JULY 15, 2010

Until 1995 startups going public typically had a track record of revenue and profits. Suddenly there was a public market for companies with limited revenue and no profit. Number of Venture Backed Liquidity Events 1991-2000. Number of Venture Backed Liquidity Events 2000-2010. Source: NVCA.).

Venture Capital 306

Venture Capital IPO Liquidity Event Entrepreneur 306

Up and Running

SEPTEMBER 20, 2021

A convertible note is like a loan, but this amount can be converted into company equity later on, usually during a liquidation event, like the acquisition of the company. Here you can see that the founders own most of the shares at 67.7%, then the ESOP (employee stock option pool) at 12.31 Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

YoungUpstarts

MARCH 11, 2015

But it’s an important consideration, especially for companies that plan to offer alternative compensation such as employee stock options, which will usually require a 409A valuation. Startup companies are often cash poor and have little in the form of current monetary compensation to offer their employees.

Valuation 100

Valuation Stock Options CPA Merger 100

Berkonomics

SEPTEMBER 26, 2013

First, should you inform your employees of the deal? For starters, as the due diligence and documentation period drags on, you’ll have to keep your company’s eyes off the ball to continue the increasing revenues and profit momentum. The liquidity event and beyond'

Due Diligence 85

Due Diligence Liquidity Event Intellectual Property SEC 85

Berkonomics

MAY 26, 2010

They include an expense account, company car, profit sharing, 401k contributions, medical coverage for dependents, free life insurance, educational payments, extra vacation, relocation expenses, paid trips to industry association meetings, or a small override on revenue from new products developed under the candidate’s watch. .

Employee 54

Employee Liquidity Event Stock Options Salary 54

Gust

NOVEMBER 4, 2011

This discussion expands on my Quora answer to a specific question: “ Why were the stock options of MySpace employees worthless even though the company was sold to News Corporation for hundreds of millions? ” The complete story includes a startup-within-a-startup, investments and exits by two VC firms, and some genuine corporate drama.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Berkonomics

SEPTEMBER 8, 2022

Some potential buyers or strategic partners might want your intellectual property, or revenues, or profitability, geographic advantage, or sale force, or your employee base. “What would the candidate want from your company in a transaction?” Think carefully. We’ll come back to this column in a moment.

Partner 62

Partner Intellectual Property .Net Distribution 62

Berkonomics

AUGUST 20, 2020

Email readers, continue here…] First, should you inform your employees of the deal? For starters, as the due diligence and documentation period drags on, you’ll have to keep your company’s eyes on the ball to continue the increasing revenues and profit momentum. Keep the deal a secret even as the buyer leans in?

Due Diligence 71

Due Diligence Intellectual Property SEC Lean 71

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? How much equity should I grant to early employees? Founders usually end up with 10% to 20%, all the other employees end up with about 15%, and the VCs end up with about 60% to 75%. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

Berkonomics

DECEMBER 17, 2020

If you have a virtual company with your employees working from home locations, as many startups do, it should be the location of the founder. VCs often invest no less than $2 million in a single deal, finding it difficult to put less money to work and still spend time on boards and coaching entrepreneurs to a successful liquidity event.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Berkonomics

JULY 5, 2018

Or if you’re an employee with stock options, are you aware of the increases in value you can make with your efforts? Even small community service-providers can be sold to buyers hungry to get into a business already in revenue with a steady customer base. Dave’s book on exits.

Intellectual Property 90

Intellectual Property Management Stock Options Stock 90

Berkonomics

JANUARY 3, 2019

There are great lessons to learn from Cisco and other companies that have grown wonderfully by acquisition, understanding the need to maintain elements of the acquired company’s culture, while offering the employees retained new and attractive reasons to stay and build the combined enterprise. And the lesson? So, this insight is simple.

Acquisition 48

Acquisition Due Diligence Forecast Employee 48

Berkonomics

JANUARY 3, 2019

There are great lessons to learn from Cisco and other companies that have grown wonderfully by acquisition, understanding the need to maintain elements of the acquired company’s culture, while offering the employees retained new and attractive reasons to stay and build the combined enterprise. And the lesson? So, this insight is simple.

Acquisition 48

Acquisition Due Diligence Forecast Employee 48

Seeing Both Sides

SEPTEMBER 15, 2015

To answer these questions, we built a database of 112 Israeli companies founded between 1996 and 2013 that have met or exceeded $20 million in revenue. The data reveal how dramatically foreign investors impact the growth of Israeli companies, as measured by annual sales and number of employees. Place one founder on each continent.

Israel 20

Israel Cofounder Technical Review United States 20

Berkonomics

SEPTEMBER 6, 2018

Minor decisions, such as replacing employees who have left the company or replacing equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this test. We assume that you intend to sell the enterprise at some point in the future.

Acquisition 48

Acquisition Distribution Channel Operations 48

The Next Web

SEPTEMBER 29, 2013

They feel the money can and should be spent on ways to grow the company, so they shift into growth mode by hiring more employees, paying themselves, hiring salespeople, running paid ad campaigns, and spending on overhead. Investors are always thinking about growth mode because that’s the path to where they want to go – liquidity event.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

VC Cafe

NOVEMBER 9, 2011

Stay private only if you can grow fast enough to pay your employees and investors. Below we bring you the main soundbites from the event: Larry Leibowitz took the lead: ‘In 2010, there were $270 billion awarded to IPOs; but in the first 9 months of 2011, IPOs only generated half that much. Also more expensive.

IPO 92

IPO Israel Cofounder Europe 92

Berkonomics

AUGUST 27, 2011

Minor decisions, such as replacing employees who have left the company or equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this analysis. Each decision you make to commit resources affects the future value of the business to some degree.

Acquisition 73

Acquisition Distribution Channel Revenue 73

David Teten

MARCH 14, 2018

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. We particularly help companies in winning revenue from our LP network and raising capital for subsequent rounds from top-tier late-stage investors.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Berkonomics

APRIL 3, 2014

If you are starting a virtual company with your employees working from home locations, as many startups do, it should be the location of the founder. They look for businesses that are in large markets, that can grow fast, and that can achieve revenues in excess of $40 million within five years of founding.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

www.quora.com

JANUARY 16, 2011

I've been the technical co-founder or first tech employee at three companies in a row (I'm CEO of the fourth). Think instead about the set of capabilities the leadership at your company needs: Great network and reputation to get you intros to investors, partners, employees. For your employees? So it can be done.

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42