Thoughts on startups by investors that
fund them & entrepreneurs that run them

Viewing all posts by Bill Payne

user Bill Payne Angel Investor ,
Frontier Angel Fund

Bill Payne has been actively involved in angel investing since 1980. He has funded over 50 companies and mentored over 100. He is a founding member of four angel organizations: Aztec Venture Network, Tech Coast Angels, Vegas Valley Angels, and Frontier Angel Fund.

Average Round Size in Angel Deals

The Center for Venture Research at the University of New Hampshire has been publishing statistics on angel investing for decades.  Over the past several years, the numbers of US companies funded by angel investors has increased from about 50,000 per year to over 60,000 annually.  Mark Boslet of senior editor with Venture Capital Journal posted the following chart on peHUB,

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IP & crowdfunding: are 1,000 NDAs better than none?

Angels and venture capitalists will not sign non-disclosure (confidentiality) agreements just to listen to an entrepreneur’s funding presentation, or even to read the entrepreneur’s business plan.  Serial entrepreneurs understand this and write their plans without describing the “secret sauce.”  Investors will eventually want to validate the intellectual property (IP) prior to investing, but not just to hear about the opportunity. 

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A Bubble for Seed Stage Valuation

When entrepreneurs raise equity capital for startup companies, the investors’ percentage of ownership is determined by the negotiated valuation for the company at the time of investment.  For example, if the negotiated pre-money valuation is $1.5 million and the investors provide $500,000 in equity investment, the investors are purchasing 25% of the company [$0.5 million ÷ ($1.5 million + $0.5

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Limiting the Number of Shareholders in Private Companies

The US Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders. The assumption has been that companies with 500 investors are quasi-public anyway, and for disclosure and other reasons should be forced to go public when the shareholder number approaches this limit.

IPOs, M&As, Liquidity, & You. (the entrepreneur)

In the “good old days,” angels invested in seed-stage startups and teed up promising companies for subsequent venture capital financing. If the company was successful, this quickly led to an IPO – a very happy ending for the entrepreneur, the angels, and the venture capitalists. My, my…how the world has changed.

There Is Only ONE Silicon Valley

Silicon Valley is a very special place – the nucleus of high-growth, high technology entrepreneurship in the US, indeed, in the world.  The Valley produces world-class entrepreneurs, angel investors, venture capitalists and successful high-tech companies – all growing and creating jobs on one relatively small peninsula.  The Valley has been a unique place for over half a century. It hosts

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Trends in Seed Stage Funding for Entrepreneurs

I’ve recently taken a look at seed stage funding by venture capitalists (VCs) and angel investors over the past five years.  For VCs, I chose to look at all seed stage VC deals (from MoneyTree©) as well as those in five of the most active regions in the country.  Note that I merged the two Southern California regions (LA/Orange County

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Crowd Funding and Job Creation

There seem to be two motivations behind the current buoyant enthusiasm in Congress over crowd funding for entrepreneurs:  1) the democratization of funding for startup companies (no longer requiring such investors be wealthy) and 2) the job creation that is expected to result from creating more startup ventures.  In my earlier post, Crowd Funding – A Critique for Entrepreneurs and

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The Funding Gap

The resources required to start a company vary significantly, depending on the type of company and growth rate anticipated by the entrepreneur. An experienced software engineer, for example, can develop a new mobile app with his or her own resources and market the product on the web with very little capital. A medical device company, on the other hand, may

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Startup Capital: Feast or Famine?

For years there has been a pervasive opinion across the entrepreneurial landscape that the US has a shortage of capital required to startup and grow new ventures. It is suggested that companies cannot find the cash necessary to start new and exciting ventures. Furthermore during this economic downturn, we’ve heard a crescendo of voices lamenting the lack of startup funding,

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