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Need money? Read this!

Berkonomics

Friends, family and fools: [Email readers, continue here…] This term, although pejorative, describes the typical mix of early investors in a small, young growing business. In return, the accelerator often invests $25,000 to $100,000 in the young enterprise and takes from five to ten percent of the equity in return.

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Have you heard the rule of the thirds?

Berkonomics

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.

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Create equity value with every step.

Berkonomics

Most businesses fall into the class of those that can be sold someday to a willing buyer. Email readers continue here.] Even small community service-providers can be sold to buyers hungry to get into a business already in revenue with a steady customer base.

Equity 209
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VC investors: Don’t be greedy even if you can.

Berkonomics

Promissory notes come before any equity, and most late equity investments come before early equity investments, even of the same class of security. 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.

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Does your business need money? Read this!

Berkonomics

Email readers, continue here…] Bootstrapping: This term describes your ability to start a business with little investment and grow it using internally-generated funds. In return, the accelerator often invests $25,000 to $100,000 in the young enterprise and takes from five to ten percent of the equity in return.

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Be careful about equity and options!

Berkonomics

Here is the warning: The execution of equity allocations and of a good incentive program using equity is often mismanaged, damaging the corporate capitalization structure and even affecting the outcome of subsequent investment into the company. … Equity is divided between the founders and the business begun.

Equity 156
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The Rule of Thirds

Berkonomics

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.]

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