Both Sides of the Table

OCTOBER 22, 2011

Today’s post courtesy of the Dave McClure school of vocabulary. About a month ago I was meeting with a seasoned entrepreneur. After 10 minutes I felt like we were old buddies because we had both been through the trenches of startup tech land and had had similar experiences. He was recounting one of his higher profile startups to me. He founded the company, raised a bunch of money, built the product and established a good reputation and market position.

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This is going to be BIG.

OCTOBER 12, 2011

Tweet. I'm sorry that I missed yesterday's Glamour Magazine panel on women in tech --if nothing else because it featured two of my favorite women in technology, Hilary Mason and Kara Swisher. They're awesome and I'd show up to hear them speak anywhere. More importantly, I know them both for a while--Hilary since August of 2007 through twitter and, of course, getting to work with her at Path 101, and Kara since I used to e-mail her about her Boomtown columns in the WSJ over ten years ago.

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data analysis venture capital communities strategy 298

Gust

OCTOBER 18, 2011

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. Below is a brief description of each of the most popular methods. Detailed descriptions will be published over the next few weeks: The Scorecard Method: This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target.

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venture capital investing investment education 174

Berkonomics

OCTOBER 7, 2011

There are several times when stakeholder loyalty is tested to the limit. For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. For investors, a subsequent down round at a lower valuation than the last, or an exit opportunity at a loss are all opportunities for the affected stakeholder to show a side that can sometimes shock an entrepreneur or CEO.

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development

For Entrepreneurs

OCTOBER 26, 2011

Scalable pricing is a powerful tool to grow revenue in a SaaS or software business. It allows you to capture more of the revenue that your customers are willing to pay, without putting off smaller customers that are not able to pay high prices. It also provides a great way to continue to grow revenue [.].

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Both Sides of the Table

OCTOBER 3, 2011

I’m often asked the question about why there aren’t more women who are entrepreneurs. On my blog I’ve been hesitant to take the topic head on. Somehow it seems kind of strange for a man to answer this question that obviously comes from a man’s point of view. But last week I noticed a blog post by a woman, Tara Tiger Brown, that asked the question, “ Why Aren’t More Women Commenting on VC Blog Posts?

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This is going to be BIG.

OCTOBER 28, 2011

I asked a company the other day whether or not they were going to take advantage of a great event here in NYC. Its an opportunity to pitch Sony on a biz dev deal --a no brainer for nearly any company given the scope of Sony's areas of interest. ( applications are due this Monday the 31st ) The company said no because their main angel investor didn't think it was a good idea to let an audience see their pitch.

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Gust

OCTOBER 11, 2011

An “ elevator pitch ” is a concise, well-practiced description of your startup and your plan, delivered with conviction and enthusiasm, that your mother should be able to understand in the time it would take to ride up an elevator. Everybody knows about these, but few people seem to deliver a good one. A good elevator pitch is not just for an elevator discussion.

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pitching startup energy sustainability 174

Berkonomics

OCTOBER 28, 2011

You’ve surely heard of Maslow’s Hierarchy of Needs, in which Abraham Maslow laid out a human’s needs from the physiological first, to safety, then love and belonging, on to esteem and finally self-actualization. Assuming that you have now passed through a successful sale of your shares in a business, and the money is in the bank, enough to at least temporarily satisfy your needs, if not much more, you have climbed the ladder within Maslow’s Hierarchy.

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communities board opportunity entrepreneurs 66

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financing

Derek Sivers

OCTOBER 23, 2011

My unwritten condition for when to exercise was this: When it’s a nice day, and I’ve finished my work, and I haven’t just eaten, and I’m feeling energetic. But of course that rarely happens, so I wasn’t exercising enough. My coach suggested I change “and” to “or”. When it’s a nice day, or I’ve finished my work, or I haven’t just eaten, or I’m feeling energetic.

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Both Sides of the Table

OCTOBER 19, 2011

I’ve just completed an investment in Ryan Carson’s new company, TreeHouse. It meets everyone of my criteria so I thought I’d elaborate. 1. I’m investing heavily in Internet video. Why? Americans watch 5.3 hours of television / day – many age groups are even more. We read less than an hour / day. I know readers of this post aren’t in that demo but that’s what the data says.

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investing investment education board 295

Both Sides of the Table

OCTOBER 31, 2011

I have written extensively about Twitter in the past. I still find that many people don’t understand the basics. If you consider yourself a newbie, please check out a group of posts that I’ve done in the past that might make you feel more comfortable with what is unique about Twitter. In this post I want to talk about a Twitter that I see beyond what is visible to most Twitter users today.

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media VC strategy networking 324

Both Sides of the Table

OCTOBER 28, 2011

I’ve thought a lot about team construction of early stage companies. I was once asked on Quora what my idea startup team would be. I wrote the following : “I like to invest at the seed or A round. My ideal team is simple: Assuming 6 people. 1. 5 engineers. 2. 1 CEO who doubles as head of product management. 3. Nothing else. But obviously I am open to other configurations.

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construction advice investing investment 325

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technology

Both Sides of the Table

OCTOBER 11, 2011

What could you learn from looking at your competitors or other tech startups in a different way? Are you cynical about their chances in the market just because they seem to be hot in the press and that bugs you? Or you think their startup is a passing fad and yours is the real deal? I hear views like this all the time. Even if you’re right – there’s something you may be missing.

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Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. Due diligence and paperwork take time, and can change everything. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists.

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financing finance board entrepreneurs 158

Gust

OCTOBER 31, 2011

Many writers have outlined the critical success factors for product companies, like sell every unit at a profit, patent the design, and continuous product improvement. But recently I was asked about success factors for services startups, and I quickly realized that there is very little published to help the thousands of startups that fall in this category.

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Gust

OCTOBER 20, 2011

Individual accredited investors in typical angel deals put personal capital at risk for an equity share of growth-oriented, start-up companies. These angel investors generally invest $25,000 to $100,000 in a round totaling $250,000 to $1,000,000. In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 million and is established by negotiations between the entrepreneur and the angel investors.

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angel investing investing investment opportunity 146

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opportunity

Gust

OCTOBER 25, 2011

Assume you have the right factors to get angel investment: experienced team, good product-market fit, growth potential, defensibility, and a reasonable shot at a successful exit. Have you asked yourself whether that’s what you really want? Have you considered the tradeoffs? This might seem awkward on this site, suggesting that you don’t want angel investment.

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angel investing investing investment board 133

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies.

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Gust

OCTOBER 18, 2011

The man stopped talking, finally, summarized his pitch, and thanked us for listening. We sat in stunned silence. He’d treated us – a group of local investors – to a pitch punctuated with detailed stories of how previous partners, an investor , and an attorney had screwed him. He told us he’d finally beaten them back, and was now ready to move forward with his great technology.

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pitching investing investment technology 124

Gust

OCTOBER 26, 2011

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. What seem like boilerplate provisions can be meaningful in some situations. As I’ve noted before, readers joining this series in progress may find it helpful to download the sample term sheet from my firm’s website and review the earlier posts covering the basics.

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B2B marketing

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. For those playing at home, you may find it helpful to download the sample term sheet from my firm’s website and follow along with the commentary.

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financing finance angel investing investing 79

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. Readers may find it helpful to download the sample term sheet from my firm’s website and follow along with the commentary.

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financing finance construction investing 107

Gust

OCTOBER 24, 2011

In the world of business, you only get one chance for a great first impression. The stakes are high – you are asking an investor for money, a customer for an order, or another executive for a partnership. Badly written letters, long rambling or emotional emails, or an obvious lack of spell checking will brand you as a poor business risk before the message is even considered.

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culture education development 102

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage. It is not unusual to hear people refer to “angels-and-vcs” in a single breath, even though those are two very distinct groups with different attributes.

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Speaker: Wayne Spivak - President and Chief Financial Officer of SBA * Consulting LTD, Industry Writer, and Public Speaker

The old adages that "cash is king" and "you can’t spend profits" still hold true today. But however well-known these sayings might be, it requires a change in mindset to properly implement a cash flow management system that predicts your business's runaway as accurately as possible. Key to this new mindset is understanding the difference between the Statement of Cash Flows, a historical look at the source and uses of cash, and the Cash Flow Statement, which uses transaction history and forward-l

financing