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

Blog Archives

Convertible Debt: Worst Form Of Seed Financing — Except For All The Others

How to finance a new seed-stage startup?  Equity?  Convertible debt?  Convertible equity?

As of August 2010, Paul Graham famously proclaimed, “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.”  Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum”

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2011 Halo Report :: US Angel Group Activity

At the Angel Capital Association (ACA) Summit in Austin in March, the Angel Resource Institute reported on angel group activity in 2001 in the first annual Halo Report.  I found some of the results quite interesting.  For example:

The median round of investment by group was about $700,000 but less than $300,000 was invested by the local group leading the

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Forget Crowdfunding: Why JOBS Matters

Posted by on April 6th, 2012

Most all the talk about the JOBS bill is about crowdfunding, seeding, and the ability to advertise private placements.  In my mind, other provisions are the really big news for young companies.

Those are the expansion of the size limits for “Reg A” offerings, and the newly created “regulatory on-ramp.”  Together, these have re-opened a door to capital that’s been

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Crowdfunding Back On Track — As Milk Train, Not TGV

Last week I penned an in-depth critique of the portion of the JOBS Act seeking to legalize crowdfunding in the United States.  The bill, which may have more to do with political grandstanding in an election year than with actual job creation, was approved by a strong bipartisan majority in the House of Representatives. As I argued last week, the

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The reality of returns on angel investment

Editor’s note: This was originally a question and answer on Quora, but the community response was so significant we decided to syndicate it on our Gust blog.

Q: If I want to invest $5,000 as a new angel investor into a new company or companies as part of an angel syndicate, what chances do I have of making a profit in 5 years?

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The Great Crowdfunding Train Wreck of 2013

The verb “to disrupt” in all its forms is rightly popular in the startup world.  To many entrepreneurs, few things are as personally satisfying (or as lucrative) as disrupting an entrenched, complacent, monopolistic, inefficient or stagnant market in ways that often empower consumers and producers alike.  Consumer Internet and mobile technology businesses continue to be rife with opportunities for disruption.

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“How Do Entrepreneurs Raise Angel and Seed Funding” Webinar

Gust is delighted to announce a partnership with NASVF and NCET2 for the online certificate course “How Do Entrepreneurs Raise Angel and Seed Funding”. The course is an insider view to the early stage fund raising process. You’ll learn how angels and early-stage investors identify promising startups, what needs to be in the business plan, how to build effective leadership teams, how to do

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Investment Strategy for Angels

After participating in a seminar I delivered a couple of years ago, an experienced angel investor commented to me he would never write another check for $250,000 to a single startup.  Instead his new strategy would begin writing checks for $25,000 to $50,000 for many companies.

Rob Wiltank’s study  a few years ago validated what many angels have suspected for

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Motivations of an Angel Investor

The typical angel investor is wealthy and about 60 years old—at a stage in their lives when golf, tennis, cruises, and grandchildren are foremost in their minds. They could easily turn their investment decisions over to a wealth manager. Why would they choose to invest both time and money in startup companies? Why? Because they want to! Ask any angel and you will

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The #1 Angel Investing Mistake

The list of angel investing mistakes is an awfully long one, equally as long as the list for liquid investments, plus a bunch more.  On the too-aggressive side: believing the hockey stick, ignoring the management holes, and overestimating product acceptance.  On the too-conservative side: my favorite startup myth, thinking that .

You Have Competition – Ellen Weber” href=”http://videos.gust.com/video/You-have-competition;search%3Atag%3A%22know-thy-market%22″>because competitors exist,

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