Berkonomics

OCTOBER 5, 2023

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result. Growth before the VC arrived was not a problem.

Venture Capital 296

Venture Capital Product Marketing Resource 296

Berkonomics

NOVEMBER 1, 2018

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. I found myself in such a situation upon a sale of my computer software company.

Sales 480

Sales Venture Capital Writing Email 480

Berkonomics

NOVEMBER 11, 2021

Many, many companies accepting venture capital lost it all following this instruction. VCs have a goal of creating extraordinary value for their investors. Venture investors need large scale to make large exit valuations, or in many cases are not interested in maintaining marginal companies. But beware.

Venture Capital 156

Venture Capital Social Media Invest Marketing 156

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. And here’s the “why.”.

Outsource Development 156

Outsource Development Startup Outsource Venture Capital 156

Both Sides of the Table

APRIL 28, 2010

This was the first episode where Jason wasn’t on the show, which gave me the chance to have another VC on the show to discuss deals. Rustic Canyon is an LA-based, but geography-agnostic VC that is currently investing from a $200 million fund. VC Financings: 1. I keep meaning to get him drunk to spill the stories.

Venture Capital 270

Venture Capital Capital Rustic Canyon Mobile 270

Both Sides of the Table

SEPTEMBER 8, 2012

I recently wrote about my views that startups rounds should be priced. Fred, who also wrote his views about convertible debt (significantly more succinctly than I) believes that the price of a single round should be the same for everybody. I also would never expect another VC to do that to me. Price the round. why buy me?

Pricing 294

Pricing Venture Capital Writing Equity 294

Both Sides of the Table

JULY 16, 2010

Lots of discussion these days about the changes in the VC industry. The VC industry grew dramatically as a result of the Internet bubble - Before the Internet bubble the people who invested in VC funds (called LPs or Limited Partners) put about $50 billion into the industry and by 2001 this had grown precipitously to around $250 billion.

Venture Capital 311

Venture Capital Startup Seed Funding Rustic Canyon 311

Both Sides of the Table

NOVEMBER 14, 2010

I pointed to several Economist articles I had read that mapped historical prices of real estate for 400 years and how on average property values grow at no more 1.5% above inflation yet in many markets in the US & Europe prices were rising at 10-25% per year. Logic tells me the following: It is hard to make money angel investing.

Invest 299

Invest Angel Technical Review Venture Capital 299

Both Sides of the Table

AUGUST 14, 2009

This is part of my ongoing series Pitching a VC. I recently wrote a post on angel financing covering the topic of convertible notes but I realized I was thinking about the issue more from investor perspective and a very narrow topic of how to price the round. This post is for those who want to raise angel money.

Angel 291

Angel Funding Venture Capital Startup 291

InfoChachkie

MAY 22, 2012

The steps outlined below represent an ideal approach to raising capital from sophisticated investors. You might be at Step 2 with one VC and Step 3 with another. VCs collude all the time, it is only fair that entrepreneurs compare notes every now and again as well.”. Even the most jaded VC cannot resist authentic flattery.

Venture Capital 236

Venture Capital Capital Research Custom 236

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Angel 120

Angel Sales Pricing Equity 120

Berkonomics

JULY 23, 2020

Sometimes the end game or sale of the company is not a happy event. Especially when outside investors, venture capitalists, or angels, have put in substantial money and the sales price is less than the value of their investment. There are some questions a distressed sale brings to mind.

Company 156

Company Companies Sales Venture Capital 156

socalTECH

JULY 10, 2019

For this morning's interview, we spoke with Los Angeles-based Halla , a venture backed startup, focused on personalized recommendations for the food ordering industry. in seed funding, from E&A Venture Capital and SOSV. We spoke with CEO and co-founder Spencer Price to learn more about the company.

Pricing 113

Pricing Startup North Hollywood Platform 113

TechCrunch LA

MARCH 2, 2021

Making money on livestreams has never been easier thanks to a suite of tools from the Los Angeles-based startup Maestro , which just nabbed $15 million in financing to grow its business. But what started in the gaming world quickly spun out as the company slashed prices to $500 per month for its services.

Tool 315

Tool Commerce .Net Entertainment 315

Startup Professionals Musings

OCTOBER 16, 2023

Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. As a rule of thumb, most viable businesses need a gross margin above 50 percent, even on wholesale prices, to cover operational expenses and survive as a business.

Startup 116

Startup Pricing Sales Statistics 116

Berkonomics

JUNE 15, 2017

Taking in angel or venture money requires a setting of an entrepreneur’s expectations that may come as a shock at least at first. From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering.

Venture Capital 243

Venture Capital Sales Invest Class 243

Both Sides of the Table

JUNE 17, 2017

The most obvious way to explain this is with sales people. If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. Do you imagine eventually raising VC and trying to build a faster growing company?”

Startup 227

Startup Venture Capital Sales Course 227

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). Professional angels: This is the arena where I work and play. For you who fit that description, nice work.

Venture Capital 266

Venture Capital Class Invest Equity 266

SoCal CTO

MAY 19, 2010

I’m planning on going to a Tech Coast Angels mixer tomorrow and the topic for me is whether there is angel funding out there for startups that don’t meet classic VC models. By way of background for the question, there’s a great post by Bob Aholt, a Pasadena Angel: An Angel Investor’s Thoughts on Valuation.

Invest 205

Invest Angel Tech Coast Angels Pasadena Angels 205

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. A personal experience that relates.

Equity 156

Equity Course Sales Invest 156

SoCal CTO

JANUARY 5, 2011

- SoCal CTO , January 13, 2010 5 Lessons from 150 startup pitches - A Smart Bear: Startups and Marketing for Geeks , July 11, 2010 9 Reasons Why Many Smart People Go Nowhere - Life Beyond Code , March 29, 2010 No Accounting For Startups - Steve Blank , February 22, 2010 Startup Advice In Exactly Three Words - #StartupTriplets - OnStartups , January (..)

Startup 378

Startup Venture Capital Blogging CTO Coach 378

Berkonomics

JULY 10, 2014

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up premoney valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Email readers, continue here.]

Startup 179

Startup Outsource Development Outsource Venture Capital 179

Xconomy

JUNE 16, 2016

In San Diego, the complaints often focus on the relative scarcity of venture capital and hometown VC firms. So when the San Diego Venture Group recruited Mark Suster of Los Angeles-based Upfront Ventures to give the keynote talk Tuesday night for Startup Week San Diego, more than 800 people filled a downtown auditorium.

Venture Capital 49

Venture Capital San Diego Truecar Web 49

Berkonomics

AUGUST 10, 2017

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result. All investors, including the VC firm, lost everything.

Venture Capital 243

Venture Capital Product Resource Marketing 243

Startup Professionals Musings

FEBRUARY 5, 2021

If you don’t have a destination, don’t waste your money trying to get there, and don’t expect anyone to support you along the way Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. Forecast sales-volume expectations.

Startup 147

Startup Pricing Sales Statistics 147

socalTECH

FEBRUARY 17, 2021

Los Angeles-based car sharing marketplace HyreCar reports it has raised $29.7M million shares of its common stock at a public offering price of $11.75 The offering was run by Lake Street Capital Markets, LLC and Northland Securities. The offering was run by Lake Street Capital Markets, LLC and Northland Securities.

Los Angeles 113

Los Angeles Pricing Platform Report 113

Both Sides of the Table

DECEMBER 27, 2011

The most obvious way to explain this is with sales people. If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. Do you plan to run this as a smaller business but maintain healthy profits?

Startup 418

Startup Venture Capital Sales Technical Review 418

socalTECH

NOVEMBER 8, 2017

Santa Barbara-based TrackStreet , a developer of software to help manufacturers monitor their channel and e-commerce sites--and in particular, minimum-advertising-price (MAP) policies--has raised $2M in seed funding, the company said Wednesday. READ MORE>>.

Commerce 124

Commerce Artificial Inteligence Seed Funding Santa Barbara 124

Both Sides of the Table

SEPTEMBER 28, 2014

Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs.

Startup 383

Startup Company Companies .Net 383

Both Sides of the Table

SEPTEMBER 5, 2012

.” I applaud all efforts by people to take on this issue and especially be Adeo who – let’s be honest – was really the first champion of trying to make the VC world more transparent by launching TheFunded, which didn’t exactly endear him to VCs initially. Some thoughts on raising angel money.

Startup 354

Startup Pricing Equity Venture Capital 354

Berkonomics

MAY 21, 2015

Many, many companies accepting venture capital lost it all following this instruction. VCs have a goal of creating extraordinary value for their investors. Venture investors need large scale to make large exit valuations, or in many cases are not interested in maintaining marginal companies. But beware.

Venture Capital 120

Venture Capital Social Media Invest Marketing 120

Both Sides of the Table

APRIL 25, 2011

This thinking is largely driven by the venture capital industry (and subsequently Wall Street) who are in search of high margin, highly scalable businesses. It’s nearly impossible to get a services company financed by VCs. Why Shouldn’t Most Services Businesses Raise VC? It may be the right answer for you.

Services 332

Services Venture Capital IP Startup 332

TechCrunch LA

MAY 3, 2022

million last year, is among hair businesses aimed at women and people of color, like Rebundle , Morado and theCut , attracting venture capital dollars. All of the stylists are independent contractors and set their own pricing. The price a consumer pays depends on the stylist chosen. The company, which raised $1.7

Tool 179

Tool Custom Customer Marketing 179

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. VC’s money comes from mostly institutional investors called LPs (limited partners). Maybe the market views this as not worth the price you paid?

Startup 290

Startup Funding Venture Capital Pricing 290

Berkonomics

AUGUST 29, 2013

Sometimes the end game or sale of the company is not a happy event. Especially when outside investors, venture capitalists, or angels, have put in substantial money and the sales price is less than the value of their investment. There are a number of questions a distressed sale brings to mind.

Sales 166

Sales Venture Capital Invest Guide 166

Startup Professionals Musings

SEPTEMBER 13, 2022

The problem is that professional investors (angels and venture capital) want a proven business model before they invest, ready to scale, rather than early projections and product development. Exchanging your services for services is possible with legal counsel, accountants, engineers, and even sales people.

Startup 136

Startup Technical Review Equity Incubator 136

Both Sides of the Table

MARCH 12, 2013

Because my role as a VC requires me to take and endless stream of meetings I long ago decided I need to learn as much as I can from the meetings I attend so I often just ask tons of questions and assimilate knowledge. When I think about what defines us as a VC I think: Operationally knowledgeable / strong startup competence.

Venture Capital 360

Venture Capital GRP Partners Startup Invest 360