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

Blog Archives

Do You Know When To Bootstrap and When Not?

A couple of days ago a friend asked me whether I’m in favor of startups getting angel investment. He pointed out this post on this blog, which is me writing about five good reasons not to seek investment. My answer is that – like so much else in this field – it depends on the specific situation. A business that

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No, I will not sign your non-disclosure agreement.

Entrepreneurs are often surprised when investors refuse to sign non-disclosure agreements (NDAs) or confidentiality agreement when offered an opportunity to read the entrepreneurs’ new business plans.  After all, every new startup features secret ideas, partnerships, intellectual property and/or technology.

Movies, not Snapshots

Stopping by the First Growth Venture Network session today, I saw the usual great collection of startups and industry experts. It’s about the best forum for practical advice, mentoring, and support that an entrepreneur could hope to find.  As usual, there were lots of quotable quotes, but my favorite one today was from Jeff Bussgang, co-founder of Flybridge, who said:

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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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Angel Investors on Burn Rate and Great Now or Great Later

Here’s an interesting question. It came up Tuesday night in an angel investment meeting:

My question is which looks better to investors: A higher burn rate with three great people on the business plan, or a lower burn rate with only two great people on the business plan? Two of the three want salary, not equity, and one of those

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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:

Pitching is never free.

If you are new to the startup space and Angel investing, you probably don’t realize that some groups of Angel investors charge entrepreneurs a fee to pitch to their groups. This practice has caused a rousing debate among key players, with some calling it a scam, and others defending it as necessary to cover expenses.

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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5 Ways A Business Plan is a Promise, not a Product

One of the questions I hear most frequently is how to find consultants to help with developing a business plan for investors. Often it seems as if people are thinking that the right prose and formatting could make the difference between investor interest or lack of it.

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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