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When should you go for equity financing?

Berkonomics

Let’s take a few minutes to examine the kind of equity financing available to small or early stage businesses. In most cases, these applicants for equity funding must be rooted in technology to apply to this limited discussion. Friends and family investors. We’ll call these “inside angels.” Individual super angel investors.

Equity 156
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Equity financing: great for rapid growth startups

Berkonomics

We’ve spoken of financing a young company through friends and family, known as “inside angels.” There are three classes of equity investors for early stage businesses that we have not yet considered. This class of investor typically writes checks from $50,000 to $250,000.

Equity 232
Insiders

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Praying to the God of Valuation

Both Sides of the Table

I started my first company in 1999 and was admittedly swept up in all of this: Magazine covers, fancy conferences, artificial valuations and easy money. Between 2006–2008 I sold both companies that I had started and became a VC. Starting in 2009 I began writing checks consistently, year-in and year-out.

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The Changing Venture Landscape

Both Sides of the Table

I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. And the truth is that several entrepreneurs prefer it this way. By definition?—?I’m dot-com bonanza. Seed has become an option factory for many.

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8 Strategies For Business Professionals To Stay Ahead

Startup Professionals Musings

As a business advisor and advocate for entrepreneurs, I find myself almost always talking and writing about change. With a bit of humor, he provides some serious guidelines for struggling career professionals looking to move up, and new entrepreneurs looking to build a company. Business is not rocket science.

Startup 106
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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

But what IS the right amount of burn for a company? Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. (it Conversely if you’re burning $600,000 per month (yes, some companies do) then you only have 5 months of cash left. Gross Burn vs. Net Burn.

Startup 383
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6 Keys To Managing Funding From People Close To You

Startup Professionals Musings

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. Loans are a safer option than equity. Be professional about it.

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