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Be careful about equity and options!

Berkonomics

Some rules about stock options and phantom stock: [Email readers, continue here…] The real insight here is that stock options or phantom stock are the tools of early-stage businesses used to attract great talent when there is not enough cash to pay market rates. a share, then options must be priced at that amount.

Equity 156
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A heartbreaking story about time and money.

Berkonomics

First, think about your time as money! How about young or pre-revenue companies? Time and fixed overhead: [Email readers, continue here…] That relationship between fixed overhead and production time is as critical as any other factor in the success of a young company. The post A heartbreaking story about time and money.

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You name the price; I’ll name the terms.

Berkonomics

The rest of the purchase price was concocted from a brew of zero-coupon bonds (where the face value is many times the invested amount until the reduced cost bonds mature thirty years later), and borrowing using the target company’s accounts receivable and other assets as collateral for a loan to purchase the company. What power!

Pricing 156
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About personal use of corporate assets

Berkonomics

This insight addresses more the impact of such behavior upon the actions of employees and others who observe that behavior from a senior manager or owner of a business – and know that they cannot say anything about it without jeopardizing their jobs. The post About personal use of corporate assets first appeared on BERKONOMICS.

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How to Talk About Valuation When a VC Asks

Both Sides of the Table

One of the hardest things about the fund-raising process for entrepreneurs is that you’re trying to raise money from people who have “asymmetric information.” VC firms see thousands of deals and have a refined sense of how the market is valuing deals because they get price signals across all of these deals.

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What Entrepreneurs Should do about Price Fixing

Both Sides of the Table

We all know about AngelGate by now. Here’s what you need to know… As a funny coincidence I happend to have written about the topic of collusion 3 weeks prior to the fateful dinner. To be crystal clear – I think AngelList is awesome and I have NEVER heard Nivi or Naval ever reveal or discuss pricing information.

Pricing 292
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Can you defend your pricing niche against your competition?

Berkonomics

There can be nothing more important in your business planning that selecting the proper pricing niche, making your story clear using that niche, and the defending your position against the competition. They are: Price. Think about your positioning. The danger of competing on price. The five major niches.

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