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

Blog Archives

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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Valuations 101: The Risk Factor Summation Method

The Risk Factor Summation Method is the fifth methodology for estimating the pre-money valuation of pre-revenue companies we have described in recent posts. Readers may have noted that both the Scorecard Method and the Dave Berkus Method considered a narrow set of important criteria for investment in arriving at a pre-money valuation.

The Risk Factor Summation Method, described by the

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Do Angel Investors Care About University Degrees?

There is a stream in entrepreneurship lore that the entrepreneur doesn’t need or want education, a fire fed by legendary dropouts Steve Jobs, Bill Gates, Mark Zuckerberg, etc. Why waste your time studying? Just do it; or so it goes. So how do angel investors fall on this question? Does the degree add credibility? Is it worth it?

Startup Due Diligence Is Not a Mysterious Black Art

After you have successfully attracted angels or venture capital with your business case, your million dollar product idea, and you have a signed term sheet, there is still one more hurdle to overcome before investors write the check. This is the dreaded “due diligence” process.

Valuations 101: The Cayenne Calculator

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors.

The High Tech Startup Valuation Estimator is an online tool developed by Cayenne Consulting to assist entrepreneurs and investors in estimating the pre-money valuation of startup enterprises.

Valuations 101: The Dave Berkus Method

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors.

Dave Berkus is a founding member of the Tech Coast Angels in Southern California, a lecturer and educator.  He has invested in more than 70 startup ventures.   Dave’s valuation model first appeared in a book

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Valuations 101: The Venture Capital Method

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors.

Valuations 101: Scorecard Valuation Methodology

Individual accredited investors in typical angel round 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

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Valuation Methods 101

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: