Berkonomics

FEBRUARY 3, 2022

Of course, you will find yourself in opposition to your investors and some of most of your board members if you do this after taking outside investment. I was able to negotiate a “put” of my shares back to the company at 5x my investment. For some, that comfort is worth forgoing building high equity value.

Equity 156

Equity Course Sales Invest 156

Berkonomics

JANUARY 7, 2021

How many of them, particularly in technology, were able to start a company, supply all the funding, and share no management tasks or equity with others, and still grow the company to any significant size, worthy of a multi-million-dollar opportunity to cash out at exit? Dividing equity among those that fill the management gap.

Startup 240

Startup Equity Statistics Entrepreneur 240

Berkonomics

APRIL 3, 2014

There are three classes of equity investors for early stage businesses that we have not yet considered. First, angel investment groups come in all sizes from a few organized angels to large groups of three hundred or more. Angel groups invest from $250,000 to $1,000,000 or more in qualified investments.

Equity 232

Equity Startup Organization Invest 232

Berkonomics

MARCH 8, 2018

Give one percent equity to each outside board member vesting over four years of service. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service. Here is my best advice, based upon many boards and many years.

Venture Capital 256

Venture Capital Equity Sales Invest 256

Berkonomics

FEBRUARY 9, 2023

The most striking example was the one hundred million–dollar purchase of one of my companies by a New York private equity investor using only five million of its cash. Offering too little in an acquisition to satisfy the seller? Ask for extended terms well beyond sixty or ninety days.

Pricing 156

Pricing Sales Examples Tool 156

Berkonomics

FEBRUARY 23, 2023

Companies sometime run out of cash in the midst of their increasing success, and often find that sources of loans or investment are not freely flowing at the moment of need. So, the question: load up with more equity and dilution? Yes, there are – when it comes to entrepreneurial growth. Growth brings financial issues.

Pricing 156

Pricing Invest Equity Entrepreneur 156

TechCrunch LA

JULY 19, 2022

It also handles the back end as well by automating the posting, sale and shipment of unsold inventory while offering immediate payment to creditworthy sellers. Ghost itself closed on a Series A equity round of $13 million, along with $7 million in debt, in June. Syrup Tech bags $6.3M to develop some sweet inventory-planning software.

Product 191

Product Funding Technical Review Equity 191

Berkonomics

FEBRUARY 11, 2021

Then they calculate cost of sales, and then project their expenses, to find the bottom-line profit or loss each projected month. How planning is done today. Most entrepreneurs and managers, when modeling their business operations using a spreadsheet, start with expected revenue by month. One way to think for tomorrow. Something new emerges.

.Net 156

.Net Sales Startup Equity 156

Berkonomics

DECEMBER 20, 2018

Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. So here goes: How would I find companies willing to license my intellectual property or to invest in a royalty stream from licenses? Investment banker? I have the weeks to follow to make mine. Do it myself?

IP 136

IP Product Equity Tool 136

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). Strategic partner” investors: If you can find a strategic partner willing to invest in your enterprise, consider it a blessing.

Venture Capital 266

Venture Capital Class Invest Equity 266

Berkonomics

DECEMBER 20, 2018

Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. So here goes: How would I find companies willing to license my intellectual property or to invest in a royalty stream from licenses? Investment banker? I have the weeks to follow to make mine. Do it myself?

IP 120

IP Product Equity Tool 120

Both Sides of the Table

MAY 19, 2018

Or if you’re a VC raising from LPs you have to list all of your deals, your investment value, your carrying value, your multiples, your IRRs, TVPIs, DPIs, etc along with net cashflows plus your previous LPAs. These collective sets of documents form the basis of what somebody looking at investing would call “financial due diligence.”

Funding 336

Funding Venture Capital Startup Email 336

Berkonomics

MAY 12, 2010

Equity is divided between the founders and the business begun. The document should also contain clear buy-sell clauses, forcing any sale of shares to first be offered to the corporate treasury, then to the other founders in proportion to their holdings, and then if no interest, to outside investors. Email readers continue here.]

Equity 213

Equity Class Pricing Startup 213

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

Startup Professionals Musings

MARCH 16, 2022

Here are some basic principles: Angels invest in people, more often than they invest in ideas. They probably won’t respond well to high pressure sales tactics, information overload, or bribes. Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities.

Startup 135

Startup Keiretsu Platform Invest 135

Berkonomics

JUNE 12, 2014

It is rare when one person starts a company, supplies all the funding, and shares no management tasks or equity with others, and still grows the company to any significant size, worthy of a multi-million dollar opportunity to cash out at exit. Email readers, continue here.]

Startup 214

Startup Equity Invest Class 214

Both Sides of the Table

MAY 13, 2018

The most important advice I could give you before you set out in fund raising mode is to understand that fund-raising a sales & marketing process and needs to be managed. Somehow many first-time founders equate “sales” with something that is beneath them. an investment in your company.

Venture Capital 332

Venture Capital Funding Startup Sales 332

Startup Professionals Musings

APRIL 23, 2013

Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself. All you need is a blog, Twitter, email, some business card stock, and a little creativity. startup control equity bootstrapping Rich Christiansen business'

Equity 96

Equity Startup Summary Tips 96

Berkonomics

JULY 24, 2014

Then they calculate cost of sales, and then project their expenses, to find the bottom line profit or loss each projected month. Most entrepreneurs, when starting to model their business operations using a spreadsheet, start with expected revenue by month. There is a rarely-used twist that makes lots of sense.

Startup 199

Startup Sales Equity Email 199

Berkonomics

MAY 22, 2014

Bill Payne has been actively involved in angel investing since 1980, funding over 50 companies and mentoring over 100 more. The sale of equity in private companies is regulated by the Securities Act of 1933, which requires that the company either register with the SEC or meet one of several exemptions (Regulation D).

Writing 199

Writing Invest Entrepreneur Equity 199

Berkonomics

OCTOBER 29, 2015

Email readers, continue here…] If you have no intention of giving up ownership or even control over time, state that early and plan accordingly. For some, that comfort is worth forgoing building high equity value.

Equity 120

Equity Venture Capital Course Email 120

Berkonomics

MAY 8, 2014

I am chairman of a company that, as I write this, is twelve years old and has not yet taken a dollar of outside investment. email readers, continue here.] In general, grants are made to individuals, companies, businesses, organizations or institutions that are working toward serving the greater good or a greater cause.

Company 166

Company Companies Writing Education 166

Both Sides of the Table

MARCH 31, 2012

Many MBA programs still cater too much to the needs of large, corporate management jobs or prepare students to enter big consulting companies or investments banks. I got an email recently from my friend & fellow VC, Jeff Bussgang from Flybridge Capital Partners in Boston. My guess is that we are likely in total agreement.

Startup 319

Startup Sales Course Competition 319

Berkonomics

JANUARY 26, 2017

The most striking example was the one hundred–million–dollar purchase of one of my companies by a New York private equity investor using only five million of its cash. Email readers, continue here…] There are so many ways to satisfy a seller, sometimes a seller’s ego, by making a price seem higher than the reality of the purchase.

Pricing 120

Pricing Sales Tool Equity 120

Berkonomics

OCTOBER 26, 2010

Give one percent equity to each outside board member vesting over four years of service. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service. Email readers continue here.]

Venture Capital 166

Venture Capital Equity Sales Email 166

Both Sides of the Table

SEPTEMBER 17, 2011

I’ve had several COOs at companies in which I’ve invested. I usually judge people’s reactions not by the comments section of my post (where people are a little bit more polite so you get selective bias) but by the private emails I get. Dilute your cash, equity or both. Naturally some didn’t.

Startup 292

Startup CTO Hire Sales Email 292

Berkonomics

AUGUST 20, 2015

The company provides identity theft protection, and took a large round from a private equity firm, which returned about eight times investment in cash to the early angels, and still left them with all their stock in the deal, an outstanding result. Email readers, continue here…] Not so fast.

Equity 120

Equity Email Sales Invest 120

Both Sides of the Table

MARCH 2, 2011

It’s apropos because there is so much noise these days with email, Twitter, Facebook, blogs, web shows, etc. I was thinking back to a few previous “insider baseball&# blog debates that raged for several weeks: AngelGate (aka Bin38 secret cabal), convertible debt vs. equity, bubble vs. not, and now the AngelList discussion.

Email 287

Email Blogging Venture Capital Writing 287

Both Sides of the Table

MAY 27, 2013

Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior. Email updates frequently. Each of your angels or seed investors may have 20-30 investments. Make your emails actionable. How much is too much?

Tips 365

Tips Email Venture Capital CTO Coach 365

Startup Professionals Musings

JUNE 14, 2019

Here are some basic principles: Angels invest in people, more often than they invest in ideas. They probably won’t respond well to high pressure sales tactics, information overload, or bribes. Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities.

Angel 96

Angel Keiretsu Invest Networking 96

Startup Professionals Musings

OCTOBER 16, 2020

In reality, the opportunities are greater for starting with a micro-business , ideally from your special expertise or passion, with fewer than five employees, and just enough sales to comfortably support you and your team. Just because you want to start a business doesn’t mean you are entitled to outside equity, loans, or crowdfunding.

Customer 125

Customer Custom Tool Writing 125

Both Sides of the Table

OCTOBER 11, 2009

They are usually offered around 0.25% of the companies equity in exchange for their role and I’ve seen many companies hand out a total of 2% to advisers. My main advice to you if you’re considering it is don’t waste much equity on it. At a minimum their angel investments will likely take precedence.

Startup 306

Startup Venture Capital Equity Technical Review 306

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). For you who fit that description, nice work. There is a lot to say about retaining control.

Venture Capital 174

Venture Capital Invest Class Entrepreneur 174

InfoChachkie

JUNE 4, 2012

As an entrepreneur, I helped create companies which achieved two IPOs and two trade sales totaling $385 million. Public relations at a startup is a sales process. In addition to paying the consultant, you must invest time to educate them. You can’t live long enough to make them all yourself.”. Over-promise And Under-deliver.

Entrepreneur 272

Entrepreneur Outsource Ideas Technical Review 272

Berkonomics

AUGUST 27, 2015

Email readers, continue here…] Now, when first meeting with an entrepreneur, I ask simply, “Is the business being formed as a Keeper or a Flipper?” Being one or the other is neither good nor bad, but the needs and investment considerations are very different.

Entrepreneur 120

Entrepreneur Equity Competition Pricing 120

Startup Professionals Musings

FEBRUARY 24, 2014

Here are some basic principles: Angels invest in people, more often than they invest in ideas. They probably won’t respond well to high pressure sales tactics, information overload, or bribes. Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities.

Angel 115

Angel Startup Funding Keiretsu 115

Startup Professionals Musings

JUNE 11, 2017

Here are some basic principles: Angels invest in people, more often than they invest in ideas. They probably won’t respond well to high pressure sales tactics, information overload, or bribes. Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities.

Angel 67

Angel Keiretsu Invest Networking 67