Berkonomics

NOVEMBER 7, 2024

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.

Hockey Stick 62

Hockey Stick Liquidity Event Valuation Balance Sheet 62

Berkonomics

JUNE 26, 2014

Angel investors, particularly those in organized angel groups, are typically former entrepreneurs who have had successful liquidity events in their pasts, or executives of companies who’ve retired with the funds from their stock options. Members want to socialize with those who have similar backgrounds and interests.

Liquidity Event 76

Liquidity Event Technical Review Due Diligence Angel Groups 76

The Next Web

OCTOBER 7, 2013

What you need to consider: - x : percent ownership upon a liquidity event. Again this is somewhat simplified as the liquidity event (sale or IPO) may come as cash, stock, or a combination of the two. It doesn’t matter how high your offer is if your startup fails. Said in other words, x percent of zero is still zero.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Startup Professionals Musings

MAY 8, 2022

If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Transition to a specialist role, plan to exit, be prepared to be pushed out, or plan to fail. The control and growth dilemma.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

Berkonomics

OCTOBER 3, 2013

The liquidity event and beyond' Bankers, investors, strategic partners, and ultimately your buyer or even attorneys providing opinions for an IPO, will all be most impressed by your thoughtful early management decision to make their lives easier and their job more productive.

Software Review 76

Software Review Due Diligence Liquidity Event Intellectual Property 76

Startup Professionals Musings

JANUARY 15, 2021

Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

Steve Blank

JANUARY 22, 2014

The reality is that the super vast majority of liquidity events are M&A and the majority of those are in the under $100M range. The percentage of VC backed startups that go public is very small, so counting on those exits in a regional fund would not be prudent (nice if it happens but don’t build the model to rely on it).

Early Stage 295

Early Stage Silicon Valley Oregon Technical Review 295

Berkonomics

JANUARY 7, 2021

So, co-management is the second group to share in the bounty upon a liquidity event. Those who receive options but leave the company before a liquidity event may either purchase those shares represented by the options upon exit from the company, or lose the right to those shares, often 60 days after their exit.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Startup Professionals Musings

SEPTEMBER 6, 2019

Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Liquidity Event 224

Liquidity Event SEC Entrepreneur Accredited Investor 224

Berkonomics

AUGUST 1, 2024

Others aim for financial success during the growth of their business and at the liquidity event or sale of the business – someday. Some work to achieve good deeds and hope that their efforts will result in financial success over time. So, this is important. Is this important?

Liquidity Event 62

Liquidity Event Revenue Email Employee 62

SoCal CTO

SEPTEMBER 27, 2011

But the more important rationale is raised in the following about why employees most often do not have significant outcomes even in fairly positive liquidity events. There's also the aspect that the equity that you typically get as part of equity compensation is behind other equity in preference and thus effectively has lower value.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Startup Professionals Musings

MARCH 13, 2020

Define an exit strategy for investors to liquidate their share. They prefer a liquidity event such as an IPO or an acquisition by an existing large industry player, with a valuation at that time of five multiples or more of your projected revenues. Back up your projections with a simple financial model.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Berkonomics

MARCH 9, 2023

If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? But this question begs for a positive answer. How would you like to see your finish line? Or do you plan to pass control to the next generation if appropriate?

Liquidity Event 62

Liquidity Event Valuation Email Management 62

Berkonomics

AUGUST 10, 2023

We know why investors “join” your company… So be aware that professional investors are in your company for the eventual large profits at the liquidity event. They are your friends only as long as you meet or exceed planned growth and value.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

Startup Professionals Musings

SEPTEMBER 16, 2017

Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Liquidity Event 184

Liquidity Event SEC Accredited Investor Angel Investor 184

Berkonomics

AUGUST 6, 2020

It will help you to explain the value of your business to potential investors and certainly help focus your efforts as you advance toward that goal of a liquidity event in your future.

Liquidity Event 62

Liquidity Event Intellectual Property IPO Equity 62

Startup Professionals Musings

AUGUST 10, 2019

If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Transition to a specialist role, plan to exit, be prepared to be pushed out, or plan to fail. The control and growth dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

VC Adventure

JULY 15, 2021

The Allies program is comprised of an alliance of VCs who have committed to unlocking $5 billion in new philanthropy over the next five years by helping their portfolio companies set aside equity for social impact prior to liquidity events. You can read the full announcement on Business Wire here.

Liquidity Event 108

Liquidity Event Equity Portfolio Community 108

Berkonomics

AUGUST 17, 2023

A liquidity event opportunity Several years later, with the approval of the board and entrepreneur, I was able to engage a very well-known potential acquirer of the business who offered an attractive price for the still young but successful enterprise.

Liquidity Event 118

Liquidity Event Stock Options Stock Audio 118

Gust

DECEMBER 1, 2011

Nevertheless, choosing to defer basic corporate housekeeping items can be disastrous in some circumstances, as when the failure to spend a few thousand dollars on legal fees to clarify IP ownership and equity arrangements comes back to bite a successful company to the tune of millions of dollars on the eve of a liquidity event.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Startup Professionals Musings

AUGUST 29, 2018

Payoff after a liquidity event is difficult and unpredictable. People see recent equity investors making billions by getting in early, ala Facebook and Amazon, and may not be prepared for the high probability of losing everything. Professional investors typically are accredited to at least the $200,000 level, and understand the risks.

Equity 180

Equity Due Diligence Angel Groups Liquidity Event 180

Startup Professionals Musings

NOVEMBER 1, 2013

Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Accredited Investor 219

Accredited Investor Liquidity Event SEC Stock 219

Berkonomics

FEBRUARY 23, 2017

If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? [Email readers, continue here…] But this question begs for a positive answer. How would you like to see your finish line? Or do you plan to pass control to the next generation if appropriate?

Liquidity Event 102

Liquidity Event Valuation Email Management 102

Hearpreneur

OCTOBER 29, 2017

With annual healthcare expenditures for conditions that either have an underlying cellular degeneration or damage component, now surpassing $7 trillion globally, Bioquark’s platform makes the company an attractive candidate for high-value strategic transactions and liquidity events for investors. Thanks to Ira S.

Entrepreneur 90

Entrepreneur Social Media Liquidity Event Private Equity 90

Berkonomics

SEPTEMBER 12, 2013

It will help you to explain the value of your business to potential investors and certainly help focus your efforts as you advance toward that goal of a liquidity event in your future. The liquidity event and beyond'

Liquidity Event 76

Liquidity Event Intellectual Property IPO Equity 76

Up and Running

SEPTEMBER 19, 2017

Private equity investments are an important part of many startup business’s plans for accelerating growth or providing founders with a liquidity event. That’s because at those levels the business is so small that the likelihood of needing to engage in contractually unanticipated strategic business activities is extremely high.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

SEPTEMBER 24, 2012

Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Portfolio 228

Portfolio Accredited Investor Liquidity Event SEC 228

Berkonomics

JUNE 12, 2014

So co-management is the second group to share in the bounty upon a liquidity event. Those who receive options but leave the company before a liquidity event may either purchase those shares represented by the options upon exit from the company, or lose the right to those shares, often 60 days after their exit.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Berkonomics

SEPTEMBER 20, 2018

Most entrepreneurs and certainly all investors would like to see “a positive liquidity event” (a good sale of the business) someday. Not only will group focus upon the possibility of a liquidity event, it will begin to focus upon a number of possible buyers. So, that’s the reason for this insight.

Liquidity Event 48

Liquidity Event Intellectual Property Naming Acquisition 48

Berkonomics

APRIL 20, 2023

years before a liquidity event (positive or negative.) How about the early-stage investors? You might be interested in this data as viewed from the early-stage investor’s viewpoint. Angel investors hold their average investment for 4.5

SBA 62

SBA Angel Investor Early Stage Liquidity Event 62

Berkonomics

OCTOBER 24, 2013

Next week, we begin again with new insights from startup through liquidity event, including guest postings by some of the nation’s best known angel investors and entrepreneurs. The liquidity event and beyond' SOFT COVER book directly from Berkus.com, signed by Dave (with gift inscription if requested): [link].

Liquidity Event 70

Liquidity Event Entrepreneur Stock Options Angel Investor 70

Startup Professionals Musings

JULY 27, 2018

Discussion of likely liquidity events and exit strategy. Every investor pitch must include the size of the desired investment, followed by the percentage of equity offered, thus supporting a realistic valuation today.

Product 145

Product Intellectual Property Liquidity Event Valuation 145

Startup Professionals Musings

FEBRUARY 6, 2015

Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. Think long-term. It’s a lot easier to buy stock in a startup than it is to sell it.

Accredited Investor 120

Accredited Investor Liquidity Event SEC Entrepreneur 120

Berkonomics

FEBRUARY 3, 2022

First, the implied promise: Taking money from professional investors such as angels or VCs usually requires that you agree to seek an exit for those investors in your plan, often targeting five to seven years as the ideal period for growth before a liquidity event. What if you later decide to just keep control?

Liquidity Event 62

Liquidity Event Preferred Stock Dividend Equity 62

Startup Professionals Musings

DECEMBER 14, 2014

If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Transition to a specialist role, plan to exit, be prepared to be pushed out, or plan to fail. The control and growth dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Steve Blank

JULY 19, 2010

Where’s My Liquidity Event. Some VC’s feel that if a startup has grown past the founder’s ability to manage and scale (and hasn’t had a liquidity event,) they should be able to remove the founding CEO and (at best) walk them out the door with only the stock they vested to that day.

Vesting 264

Vesting Liquidity Event Founder Vesting Venture Capital 264

Hunter Walker

MARCH 8, 2014

The Early Team Still There and They’ll Be Your Tribe for Years : The founders and early team are still in place because there hasn’t been a liquidity event and the work is still exciting for them.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134