Startup Professionals Musings

MARCH 22, 2020

Cohen and John Kador, in their classic book “ What Every Angel Investor Wants You to Know ,” includes these great points of practical advice on this subject: Manage expectations before the fact. That’s why it is better to use institutional investors and loans when you are able, with realistic time frame expectations.

Management 308

Management Cram Down Angel Investor Equity 308

View from Seed

JUNE 7, 2016

Just to discuss a few benefits more in-depth… First and foremost, getting into a regular cadence readies the company to think and operate more professionally for later rounds of financing. At NextView, one founder we invested in last year proactively asked us, as her lone institutional investor, to start doing this.

Seed Stage 120

Seed Stage Founder Seed Capital Institutional Investors 120

David Teten

MARCH 5, 2021

BCG (January 2018): “Companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity — 45% of total revenue versus just 26%.”. David Teten is a past Advisor to Real Ventures. *We

Cofounder 78

Cofounder Founder Technical Cofounder Technical Review 78

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

VC Cafe

FEBRUARY 6, 2011

My key takeaways from talking to roughly 40 institutional investors in the valley about investing to an European startup are: Traction cures all ills. Not literally, but one big surprise to me was that in the 40 odd investor meetings I had, I managed to open the deck probably only 5-10 times. Simplify, practice.

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

David Teten

DECEMBER 3, 2019

However, in private markets, there is more room to optimize across all 11 steps of the investing process: firm management , marketing, fundraising , origination , manage relationships, due diligence, negotiation, monitoring, portfolio acceleration , reporting, and. 1) Manage the firm . This is harder than it sounds.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Startup Company Lawyer

MARCH 12, 2009

Any company that raises venture financing will need to be a C corp in order to issue preferred stock. If founders want the benefit of flow through tax treatment with respect to losses prior to an outside financing, an S corp election may make sense as long as there are no entity or non-U.S. citizen/resident stockholders.

LLC 61

LLC Stock Options Preferred Stock Stock 61

ithacaVC

MARCH 9, 2017

The importance of the Board is why institutional investors (like VCs) often get a seat on the Board after an investment. But don’t be fooled, there is an element of control as investors want a say in critical decisions. The list goes on and on. Good corporate governance is critical at startups and other companies alike!

Seed Stage 58

Seed Stage Software Review Institutional Investors Lead Investor 58

abovethecrowd.com

AUGUST 23, 2020

During each and every modern IPO, the banks all tell the management teams that there are two key objectives in the road-show process. Talk to any management team from any IPO in the past three years, and you will find they had this exact conversation. This is critically important to understand, partially because it’s so outlandish.

IPO 118

IPO Silicon Valley Warrant Matching 118

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Startup Professionals Musings

OCTOBER 10, 2014

Cohen and John Kador, in their recent book “ What Every Angel Investor Wants You to Know ,” includes these best points of practical advice I’ve seen recently on this subject: Manage expectations before the fact. That’s why it is better to use institutional investors and loans when you are able, with realistic time frame expectations.

Founder 254

Founder Cram Down Angel Investor Equity 254

VC Adventure

MAY 21, 2014

Syndicate Dynamics: To sign up for FG Angels, an investor must be approved by Foundry Group and agree to their terms, which include a carry. The carry is a percentage of the returns on the investment that the investor will give to Foundry Group for managing the syndicate and investments (note that AngelList itself takes a carry as well).

Syndicate 93

Syndicate Syndication Technical Review Due Diligence 93

Startup Professionals Musings

APRIL 17, 2013

Cohen and John Kador, in their new book “ What Every Angel Investor Wants You to Know ,” includes these best points of practical advice I’ve seen recently on this subject: Manage expectations before the fact. That’s why it is better to use institutional investors and loans when you are able, with realistic time frame expectations.

Cram Down 230

Cram Down Angel Investor Equity Dividend 230

David Teten

NOVEMBER 15, 2013

Since I became an institutional investor, my #1 learning is: this is a highly unusual and somewhat baffling industry. Asset management also shows the traditional earmarks of an industry ripe for disruption — most obviously, unhappy customers and extremely profitable incumbents.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

Pascal's View

MARCH 10, 2010

Susan Mangiero , CEO of Investment Governance’s Fiduciary X , asked me the following: Question: Given recent instances of VC-backed company fraud and questions about the management team, how can institutional investors protect themselves from key person risk? Will they work 24/7 to get the job done? Share and Enjoy:

Government 28

Government Technical Review Due Diligence Institutional Investors 28

Both Sides of the Table

OCTOBER 1, 2009

I can tell you first hand than bankers are out making road shows to gin up interest in VCs and institutional investors. You can’t get paid for sitting on the sidelines – I always tell people that when recessions start managers in large companies get rewarded for cutting costs. There is a lot of pent-up demand.

IPO 255

IPO Investment Bankers Venture Capital Marketing 255

K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Startup Professionals Musings

MARCH 9, 2018

Cohen and John Kador, in their classic book “ What Every Angel Investor Wants You to Know ,” includes these great points of practical advice on this subject: Manage expectations before the fact. That’s why it is better to use institutional investors and loans when you are able, with realistic time frame expectations.

Cram Down 148

Cram Down Angel Investor Equity Dividend 148

ReadWriteStart

MAY 2, 2012

Getting financing for your startup is rarely easy, but if you approach the wrong investor, you can make it even harder than it has to be. How can there be a ‘wrong investor’?” Approaching the wrong investor is kind of like asking someone who’s married out on a date. Venture capitalists are institutional investors.

Angel Investor 124

Angel Investor Institutional Investors Angel Groups Flash 124

Startup Professionals Musings

NOVEMBER 11, 2015

Cohen and John Kador, in their classic book “ What Every Angel Investor Wants You to Know ,” includes these best points of practical advice I’ve seen recently on this subject: Manage expectations before the fact. That’s why it is better to use institutional investors and loans when you are able, with realistic time frame expectations.

Cram Down 120

Cram Down Angel Investor Equity Dividend 120

VC Adventure

MAY 21, 2014

Syndicate Dynamics: To sign up for FG Angels, an investor must be approved by Foundry Group and agree to their terms, which include a carry. The carry is a percentage of the returns on the investment that the investor will give to Foundry Group for managing the syndicate and investments (note that AngelList itself takes a carry as well).

Syndicate 48

Syndicate Syndication Technical Review Due Diligence 48

K9 Ventures

MAY 14, 2011

This in theory is very similar to the behavior of institutional investors, however, there is one big difference. Institutional investors make sizable investments in a company, so that when they do get a big hit that can make the whole fund. They have 4-10 partners who are investing on their behalf.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Hunter Walker

JUNE 21, 2014

One question entrepreneurs sometimes don’t ask when raising seed financing is “will this investor be able to follow on in future rounds.” Our LPs have a history of interest in this area and the economics are usually pretty standard (low/no management fee but some carry on profits).

Institutional Investors 92

Institutional Investors Dilution Later Stage Portfolio 92

David Teten

JANUARY 8, 2013

PEHub just posted this guest article: Can professional investors use social media? Historically, institutional investors kept their investing strategy and their activities very discreet. Investors can tap this network for executive talent, followon financings, and eventually an exit.

Private Equity 114

Private Equity Social Media Equity Media 114

Hunter Walker

SEPTEMBER 29, 2022

Starting a venture capital blog post with 1970s country music lyrics is pretty uncommon, but so is writing about when and why an investor might choose to sell equity before the company exits. Below I’ll share some of the principles we use at Homebrew , knowing that there’s not really a single ‘right’ answer for a fund manager.

Venture Capital 127

Venture Capital Cap Table LP Equity 127

Growthink Blog

MAY 10, 2012

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). composed of these investors and management. For you who fit that description, nice work.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

ithacaVC

JUNE 28, 2011

Let’s take the following hypo: you are the CEO of Company XYZ, and you just raised $2mm in a Series A financing. In the financing there are 3 institutional investors and 4 high net worth individuals. Let’s assume that future equity financings will be needed as usually is the case. Here are few: 1.

Warrant 53

Warrant Common Stock Liquidation Preference Institutional Investors 53

Campus Entrepreneurship

SEPTEMBER 27, 2011

Individuals or institutional investors could then log onto the website, review the loan requests, and decide if they wanted to fund the small business.

Small Business 43

Small Business Finance Institutional Investors Business Plan 43

David Teten

FEBRUARY 1, 2017

I recently met with a friend who’s a senior executive at a large investment management organization. Point72 Asset Management. The Future of FinTech: A Paradigm Shift in Small Business Finance. 14 Industry Trends the Top FinTech Execs are Watching (Institutional Investor). NY Fintech Hubs. AXA Strategic Ventures.

New York 60

New York Community DC Boston 60

The Equity Kicker

FEBRUARY 9, 2016

There’s been a lot of talk recently about what will happen to startup financing in 2016, including here on this blog. He also surveyed 72 institutional investors in VC funds who said they think they will maintain their rate of commitments to new funds this year.

Marketing 60

Marketing Institutional Investors Venture Capital Later Stage 60

ithacaVC

FEBRUARY 23, 2012

Luckily, I am not in charge of the internal finance function at our fund. Yes, large institutional investors use the unrealized values and need them for reporting purposes. My easy solution for VC firms would be to mark up or down the valuation of investments based only on new independently led outside rounds of financing.

Valuation 49

Valuation Institutional Investors Marketing Down Round 49

ithacaVC

JANUARY 14, 2014

And the Series A investors then owned 4/9s of Company X. The Series A round was taken by $2mm of institutional investors and $2mm of angel investors. Dealing with VCs Management Startup Life' Company X raised its Series A at a pre-money valuation of $5mm and it raised $4mm dollars. But beware of the gap!

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

abovethecrowd.com

MAY 20, 2013

As Benchmark is a large institutional investor in Grubhub, we were actively involved in the merger process, and we are quite excited about the potential of the two companies coming together. There are many synergies – different geographic strengths, different core customer bases, and different product strengths. It’s speed dating.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

David Teten

APRIL 7, 2017

This is the debut of an annual series of summits focused on sovereign wealth funds, institutional investors, family offices, venture capitalists, and entrepreneurs interested in technology-driven entrepreneurship and with ties to the Middle East and North Africa (MENA) region. The summit is hosted by: – ABANA – the preeminent U.S.

New York 60

New York Africa Cofounder Egypt 60

Board Effect

SEPTEMBER 21, 2020

Organizations demonstrate their commitment to ESG for nonprofits, in part, by how they manage relationships with employees, vendors, and others. Shortly after, activist investors followed suit and used the same strategy to advance other important causes. In many ways, ESG has become the new measure of success for organizations.

South Africa 61

South Africa Government Africa Institutional Investors 61