article thumbnail

How much of my business do I have to give to an investor?   

Berkonomics

Careful about “hockey stick” forecasts. To grow your business to a size that will be attractive to a VC or angel making an investment now, you’ve got to show that the business will be large enough at the time of the investor’s liquidity event (cashing out) to make the investment attractive at all. How much money can you get?

article thumbnail

10 Keys To Investor-Friendly New Venture Financials

Startup Professionals Musings

In that context, I offer the following financial projection strategies, from my own experience: Forecast a business that has plenty of room to grow quickly. Define an exit strategy for investors to liquidate their share. Investors have learned that simple buy-outs of their share by owners often become major squeeze-plays.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

10 Answers That Make Your Startup Plan Investable

Startup Professionals Musings

What are your forecasts for revenue, expenses and cash flow? Forecasts are evaluated as a level of commitment and a measure of your business savvy. If you don’t plan a liquidity event, you won’t find many investors interested. Justify funding requirements, use of funds and specify a current valuation estimate.

article thumbnail

How much of my business do I have to give to an investor?

Berkonomics

Careful about “hockey stick” forecasts. To grow your business to a size that will be attractive to a VC or angel making an investment now, you’ve got to show that the business will be large enough at the time of the investor’s liquidity event (cashing out) to make the investment attractive at all. How much money can you get?

article thumbnail

8 Ways An Investor Pitch Differs From A Product Pitch

Startup Professionals Musings

This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Startup investments are extremely risky, primarily because the stock has no value until a future liquidity event, such as an acquisition or public offering. Immediate investment requirements and use of funds.

Product 120
article thumbnail

These 10 Key Elements Make a Business Plan Fundable

Startup Professionals Musings

Financial forecast and metrics. These investors want to know that you are thinking about a liquidity event – when and how they will get their money out, with ROI. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. See where your cashflow bottoms out.

article thumbnail

Selling your business? Find the emotional buyer

Berkonomics

A financial buyer will analyze your numbers, past and forecast, to the n’th degree, and calculate the price based upon the result, after carefully comparing your numbers with those of others in the same and similar industries. Types of business buyers expanded.