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

Blog Archives

When A Startup Chooses IPO Most Founders Are Out

Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys. They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Consider the recent example of Facebook and Mark

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Sideways Startups: An Investor’s Dilemma

Editor’s Note: For a great tip on unloading private stock, read this post about how you can donate it.

One-half of angel-funded companies fail, which is why a winning Investment Strategy for Angels includes diversification. That is, to invest in several companies (rather than a few) each with the potential for home-run returns.  Amidst all the talk of failures and exits, we forget

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Here is Why You Need a Good Startup Exit Strategy

If you startup is your dream, why would you want to think about an exit? It’s going to be so successful and so much fun that you don’t need to think about what comes after. Wrong. There are two very real and practical reasons why you need to plan an exit:

Going to Raise VC? Here’s a Primer on Process, People & Powerpoint Deck

If you want a very quick primer on all the stuff nobody ever tells you about raising venture capital check out this video where Mark Jeffrey & I break it down on This Week in VC.  A summary of what we discussed is below:

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.

Good Sources on the Pros & Cons of Convertible Notes

Entrepreneurs: if you’re looking seriously at angel investment, and you have the kind of product-market fit and management experience investors will like, you need to take a good look at convertible notes.

Do yourself and the investors you want to talk to a favor: take a few minutes and do some homework on this issue.

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.

Entrepreneurs: Due Diligence on Investors is Smart

Due diligence should always be a two-way street. A while back, I published an article on “Startup Due Diligence Is Not a Mysterious Black Art,” describing what investors do to validate your startup before they invest. Here is the inverse, sometimes called reverse due diligence, describing what you should do to validate your investor before signing up for an equity

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Outside capital: do or die?

A gigantic percentage of startup literature concerns how to raise capital.  But before you start on that PowerPoint, let’s ask this: do you really have to? Or is it still possible to bootstrap and build a company organically?

A long time ago in an economy far, far away. . .

Listen my children and you shall hear Of IPO dreams once held so dear Our forefathers’ jackpot, guaranteed to arrive Hardly a founder now alive Can remember that famous yesteryear

So begins, of course, one of the most famous poems of the entire startup canon.  And, a bit misty-eyed, this old war veteran can actually remember the glory days: Venture

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