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What Type of Business Structure is Right for a SaaS, AI or IoT Company?

ReadWriteStart

Unless the LLC itself specifies otherwise, the company’s profits and losses are passed to members (owners and investors) in proportion to their contribution to the company. And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits.

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The iconic VC-Backed founders are all White & Asian men. So why invest in diversity?

David Teten

BCG (June 2018): “Startups founded and cofounded by women actually performed better over time, generating 10% more in cumulative revenue over a five-year period: $730,000 compared with $662,000.”. ” (I discuss this more in Why are Revenue-Share VCs investing in so many women and underrepresented founders ?)

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The Changing Structure of the VC Industry

Both Sides of the Table

Just 3 years ago there was talk of institutional investors “not being able to write small enough checks.” The “big boom” in startup financing started around March 2009?—?more The value capture in the private markets has also led some hedge funds and other major non-private-market investors to become late-stage VCs.

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It’s Morning in Venture Capital

Both Sides of the Table

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. Try charging customers for your product when you have 12 competitors giving the product away free finances by $20 million of VC. The Exit Problem. This never existed a decade ago.

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What Type of Business Structure is Right for a SaaS, AI or IoT Company?

ReadWriteStart

Unless the LLC itself specifies otherwise, the company’s profits and losses are passed to members (owners and investors) in proportion to their contribution to the company. And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits.

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6 Keys To Managing Funding From People Close To You

Startup Professionals Musings

Tie payments to your product or service revenue. With “cash flow” obligations, investors receive a percentage of your operating cash flow (if any) until they have been repaid in full, or have achieved a specified percentage return on their investment. Try to avoid obligations with fixed repayment schedules.

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Should you raise traditional VC or Revenue-Based Investing VC?

David Teten

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. But should they?

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