Thoughts on startups by investors that
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How to Secure a Lead Investor

By Paula Taas, Founder Institute

You’ve created an amazing founding team, you’ve built a brilliant product that has been gaining a lot of traction, and now you’re looking to expand your company. How do you continue to build your business? By searching for a lead investor in your next funding round.

The lead investor is the

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Addressing the Dreaded Lifestyle Outcome

Posted by on May 18th, 2015

Three outcomes dominate exits of angel-funded companies:

Dead bugs – Startups that go out of business, returning less-than-invested capital to angels (usually zero). Positive exits – Companies that liquidate with capital gains to investors, usually via a cash sale to a larger company.  While IPOs are possible, they are very rare for angel-funded companies.  The exits can range from simply

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US Crowdfunding in 2014

Posted by on May 4th, 2015

Crowdfunding is the practice of raising money for a project or venture from a large number of people utilizing an Internet website or platform.  Funding from each individual can be quite small, $10 or less, although some projects have much higher minimums.  Projects include films, musical recordings, new companies, products, inventions, personal causes and many others.

Since the

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10 Incentives for Entrepreneurs to Bootstrap their Startup

I’ve always wondered who started the urban myth that the best way to start a company is to come up with a great idea, then find some professional investors to give you a pot of money to build a company. In my experience, that’s actually the worst way to start, for reasons I will outline here, and also the least common

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Crowd-Funding Success Usually Brings New Challenges

Many entrepreneurs seems to be convinced that the “crowd” of regular people using the Internet will somehow solve their startup funding needs, when they sense a lack of interest from accredited investors. Professionals maintain that there is plenty of money and equity for qualified startups, and funding marginal startups via any source will only make more people unhappy.

Well-known crowd-funding

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Where would I go to invest in startups or emerging companies?

The first question you need to ask is “What country are you in?” and the second is “Are you an Accredited Investor by that country’s standards?”

If we’re talking about the US and you are NOT at the Accredited level ($1 million in investable assets, or $200,000 annual income), then for the moment you are actually not allowed to invest in privately held startups

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Can a private company take investment money from anyone?

Unfortunately, a private company in the US may not take investment money from “anyone”. The only people who are legally eligible to purchase an equity interest in a private company without a great deal of special paperwork are, as you noted, Accredited Investors. These are defined as a person with net assets of over $1 million (not including the value of his or her primary

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What happens when a company is acquired for less money than it raised in funding?

Every investment round in a company is made on the basis of extensive paperwork (often upwards of 100 pages in total) specifying *precisely* what happens when it comes time to pay out the proceeds (if any) from the sale or dissolution of the company. And since all prior investors sign such agreements—or are otherwise legally bound by them—there is never

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Don’t Let Investors Conclude Your Startup Is A Hobby

Even when your startup is a one-man show and lots of fun, a “business” needs some discipline and controls to keep it from being defined as a hobby by investors, and assure some financial return. Like it or not, you are now entering the dreaded realm of specifying and documenting “formal business processes.” The right question is “What is the

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Can Fortune 500 executives also be angel investors?

Sure! There are quite a few senior executives of large companies who are angel investors. Unless there are specific competitive or ethical issues with a particular investment, there is nothing different from their employer’s viewpoint about investing in a private company rather than a public one.