Both Sides of the Table

AUGUST 30, 2010

Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.&#. I’ve written about the topic of convertible debt at length before specifically about how angels & entrepreneurs should think about pricing. a priced/valued preferred stock financing)?

Equity 319

Equity Pricing Venture Capital Entrepreneur 319

SoCal CTO

SEPTEMBER 27, 2011

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders are likely not paid for a long time and have a sizeable equity percentage for early risk and having the concept. as his "retail" price. Let's run through an example.

Equity 391

Equity CTO Hire Startup Examples 391

Berkonomics

JANUARY 26, 2017

I admit that my dad taught me this when I was just a fifteen–year old kid starting a business and negotiating with suppliers for the first time. 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.

Pricing 120

Pricing Sales Tool Equity 120

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

Both Sides of the Table

SEPTEMBER 10, 2021

However, to be a great VC you have to hold two conflicting ideas in your head at the same time. On the one hand, you’re over paying for every investment and valuations aren’t rational. The market today would barely be recognizable by a time traveler from 2011. That used to be called A-round investing.

Venture Capital 471

Venture Capital Writing Invest Pricing 471

Berkonomics

MARCH 8, 2018

Give one percent equity to each outside board member vesting over four years of service. Many early stage CEOs and board members have asked for some guidance regarding pay and time commitments for board members. You do not pay professional investors who are serving on behalf of an investment company or VC and paid by that company.

Venture Capital 256

Venture Capital Equity Sales Invest 256

TechCrunch LA

MARCH 27, 2021

The company’s massive mint comes thanks to a new $500 million financing round led by Sequoia’s Global Equities fund and Tiger Global Management. Rowe Price, Dragoneer Investment Group, and ICONIQ Growth. “We

SaaS 292

SaaS Glendale Statistics Los Angeles 292

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. 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 156

Equity Course Sales Invest 156

Startup Professionals Musings

OCTOBER 19, 2022

In fact, perhaps the most important model, equity crowdfunding for non-accredited investors was legalized via the SEC way back in 2016, and its impact is still not fully understood. With this model, a startup pre-sells their product early, at a cheaper price, in exchange for a pledge. Startup equity model. In the U.S.,

Funding 141

Funding Startup Outsource Development Satisfaction 141

Berkonomics

AUGUST 27, 2015

Being one or the other is neither good nor bad, but the needs and investment considerations are very different. The Flipper’s executives usually have significant equity holdings, either actually owned or reflected in stock options. They also tend to have invested more of their own money in their businesses.

Entrepreneur 120

Entrepreneur Equity Competition Pricing 120

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

Xconomy

AUGUST 16, 2017

Private equity investors have more capital at their disposal than at any time in more than a decade, which could boost prices for companies seeking acquisitions. 1, private equity firms in North America and Europe had secured $212.6 As of Aug.

Equity 69

Equity Pricing Acquisition Report 69

Both Sides of the Table

SEPTEMBER 18, 2014

Me: At what price? Him: It wasn’t priced. So you did raise with a price. It’s just a maximum price. Him: But when I raised my first round we didn’t know how to price the company. How will you price the next round? That way you don’t have a max or min price but you have a price.

Venture Capital 417

Venture Capital Capital Pricing Doc 417

Xconomy

OCTOBER 27, 2016

Prices for agricultural commodities such as corn, soy, and wheat are at their lowest levels in years, but investment in agricultural technology has never been better. The increase in dollars flowing to agtech comes despite commodity prices that are down 65 percent from their 2013 peak, the report says.

Venture Capital 40

Venture Capital Pricing Invest Report 40

Startup Professionals Musings

OCTOBER 7, 2022

Here is where projections of cost, pricing, volumes and cash flow are critical. Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. How much equity ownership are you willing to offer? Are you flexible on the terms of the investment?

Funding 121

Funding Startup Equity Invest 121

Startup Professionals Musings

FEBRUARY 13, 2016

Either of these qualms can ultimately sidetrack your startup as not worthy of investment, so it pays to do your homework on what you say and how to communicate effectively. Investors will be looking for a sizing validated by industry analysts large enough for good investment returns. Investors invest in people more than the idea.

Invest 108

Invest Startup Slides Equity 108

TechCrunch LA

MARCH 20, 2019

The feature illustrates how Postmates, one of the earlier entrants to the billion-dollar food delivery wars , is trying to remain competitive by appealing to price-sensitive customers. The party feature has a five-minute time limit in which the customer must place their order to get the deal. “We and Philadelphia. billion valuation.

Orange County 200

Orange County Long Beach San Diego Los Angeles 200

Berkonomics

JUNE 8, 2017

Email readers, continue here…] Bootstrapping: This term describes your ability to start a business with little investment and grow it using internally-generated funds. You will realize much more from the ultimate sale of your business even if at a considerably lower price than if splitting the proceeds with investors.

Venture Capital 266

Venture Capital Class Invest Equity 266

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. Nevertheless, it’s an option that doesn’t cost you equity. The good news is that the cost for new startups is at an all-time low.

Startup 136

Startup Technical Review Equity Incubator 136

Berkonomics

OCTOBER 1, 2015

Especially when outside investors, venture capitalists or angels have put in substantial money, and the sales price is not enough to give them a reasonable return for the time and money invested, these investors can be – in a word – greedy.

Angel 120

Angel Sales Pricing Equity 120

TechCrunch LA

JUNE 18, 2022

We’ve talked crypto crashes a couple times already in the short life of this newsletter but the sell off this week has spooked crypto insiders in a very different way. million in pre-seed investment from investors including Liberty City Ventures, Digital Currency Group and Coinbase Ventures. debt, equity, derivatives) or sectors (e.g.,

Newsletter 278

Newsletter Platform Capital Marketing 278

TechCrunch LA

JUNE 10, 2021

billion valuation at the time of its $650 million raise last September. We’ve scaled up so massively in investments in our growth and technology, but running on a loss is very odd for us,” he told TechCrunch. “We They can also do things like initiate refunds, track deliveries and get price-drop notifications. billion valuation.

Los Angeles 266

Los Angeles Funding CIO Marketing 266

Startup Professionals Musings

OCTOBER 6, 2023

If there are conflicts within the team, or differing views of the strategy, or evidence of missing processes and tools, the investment process will likely be terminated. Take time to review and resolve any personnel distractions. A key criteria for a good investment is a large opportunity with double-digit growth.

Technical Review 118

Technical Review Startup Satisfaction Invest 118

Startup Professionals Musings

JUNE 12, 2015

Every investor in your startup, even friends and family, normally expects a share of your company (equity), which means your return for all your effort goes down quickly. The indirect costs of time and effort to find the right grant, complete the application and manage the process, even if you win, can be substantial.

Pricing 100

Pricing Equity Technical Review Research 100

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

TechCrunch LA

MAY 25, 2019

The company raised more than $550 million after pricing at $17 per share a little over a week ago. Y Combinator, the popular accelerator program and investment firm announced this week that it has promoted longtime partner Geoff Ralston to president. Luckin Coffee, if you aren’t familiar, is Starbucks’ Chinese rival.

Startup 223

Startup Venture Capital Newsletter Tips 223

Berkonomics

NOVEMBER 23, 2023

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

Equity Class Pricing Sales 156

Startup Professionals Musings

JANUARY 20, 2020

In fact, perhaps the most important model, equity crowdfunding for non-accredited investors was only legalized via the SEC in 2016, so its impact is still in the early stages. With this model, a startup pre-sells their product early, at a cheaper price, in exchange for a pledge. Startup equity model. Product pre-order model.

Entrepreneur 129

Entrepreneur Outsource Development Satisfaction Equity 129

Startup Professionals Musings

JANUARY 4, 2020

Here is where projections of cost, pricing, volumes and cash flow are critical. Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. How much equity ownership are you willing to offer? Are you flexible on the terms of the investment?

Startup 135

Startup Equity Invest Funding 135

InfoChachkie

JANUARY 21, 2019

Other Supreme apparel sells in the aftermarket for hundreds more than their retail prices, including box logo hoodies which typically sell for between $500 – $1,000. A Veblen good does not adhere to the traditional laws of price and demand. You may think that this item is an anomaly, but it is not.

Demand 160

Demand Pricing Product Equity 160

Startup Professionals Musings

FEBRUARY 8, 2021

Especially if you are a first-time business owner, the payback for this initiative is well worth the effort and cost. Unfortunately, I see too many new entrepreneurs who let their passion for a new idea or invention blind them to the stark realities of customer need, opportunity size, or pricing and cost implications.

Startup 142

Startup Technical Review Equity Entrepreneur 142

Startup Professionals Musings

APRIL 4, 2022

The problem is that professional investors (angels and venture capitalists) want a proven business model before they invest, ready to scale, rather than the more risky research and development efforts. The positives are that you give up no equity, and these apply to the early startup stages, but they do take time and much effort to win.

Tips 104

Tips Startup Technical Review Equity 104

Both Sides of the Table

SEPTEMBER 25, 2010

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. As I’m generally a believer in ‘pricing rounds’ I initially didn’t agree with the premise of the post. Photo credit: D. Perhaps it shouldn’t.

Venture Capital 286

Venture Capital Pricing Technical Review Startup 286

InfoChachkie

JULY 11, 2011

By combining our equity investment with a tranche of venture debt, the company has avoided a larger equity round, which would have significantly diluted the Founders’ ownership share. Seek maximum flexibility by expanding the length of time you have access to the funds and minimizing the amount of money you must accept upfront.

Equity 235

Equity Startup Invest Funding 235

Startup Professionals Musings

SEPTEMBER 14, 2010

But due diligence and paperwork take time, and can change everything. According to Attracting Capital from Angels by Brian Hill and Dee Powers, here are some key clauses that angel investors expect on the first term sheet for the investment you need: Set the price. Define equity type. Seat on the board.

Invest 91

Invest Angel Startup Pricing 91

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. Grant writing takes skill and immense amounts of time. First, here’s a link to my recent TEDx talk, “Smiling at success; laughing at failure.”

Company 166

Company Companies Writing Education 166

Startup Professionals Musings

JANUARY 24, 2021

If there are conflicts within the team, or differing views of the strategy, or evidence of missing processes and tools, the investment process will likely be terminated. Take time to review and resolve any personnel distractions. A key criteria for a good investment is a large opportunity with double-digit growth.

Technical Review 151

Technical Review Startup Satisfaction Invest 151