Riding On The Wings Of Angels, VCs Avoid The So-Called Series A Crunch. Editor’s note: Erik Rannala is co-founder and managing partner of MuckerLab. Follow him on Twitter @ersf. Much has been written about the Series A crunch that is facing entrepreneurs and their investors. Those who believe the crunch is upon us contend that a significant number of seed-funded startups will not be able to raise follow-on financing. A cursory review of the data reported recently by CB Insights would seem to support the fact that the Series A crunch is a market reality. However, while the CB Insights data, which includes angel-funded new ventures, shows a significant increase in seed activity, the PwC MoneyTree data shows a more nuanced story.
According to PwC MoneyTree, the rate of seed investments made by venture funds (including both seed and traditional early-stage funds, but not including angel investors) has actually remained relatively consistent over the past 10+ years. In fact, the ratio of Series A to seed investment increased in 2011 and 2012 (partial-year data). How To Turn A $50,000 Investment Into A $250 Million Company.
How To Turn A $50,000 Investment Into A $250 Million Company. The art and science of valuing websites. 16 December '12, 02:00pm Follow In an online marketplace like Flippa, we’ve seen buyers and sellers try out the full gamut of approaches for valuing websites — some more creative than others. Once you decide to get your site in shape for a sale, it’s important to value it properly.
Over the last six years, we’ve sold more than $100 million worth of sites on Flippa. That’s given us insight into which valuation methods are good, helping site owners clinch that all-important deal, and which fall short, leaving sites unsold and their owners disappointed. Today I want to walk you through the more successful valuation methods in use now. I’ll show you how they relate to different aspects of a site, and why they matter.
Then we’ll look at the different types of buyers in the market, and what that can mean for the final sale price of a site. Four Things Some VCs Do That I Don’t Like. “They smile in a n! *)#% faceAnd for whatThey got the game f! @#^& upAnd want my thang f! @#^& up”—Dr. Dre After being an entrepreneur for most of my adult life, I’ve now been a part-time angel investor for 5 years and a full-time venture capitalist for the past 9 months. During that time, I’ve come to appreciate the real value that great venture capitalists provide: amazing informational awareness, comprehensive business networks, providing brand cover for companies so that they can recruit and raise more money effectively, and more.
Still, some VCs do things that I really don’t like. 1. A lot of VCs dress casually, speak casually and encourage the companies in which they invest to have casual board meetings and casual discussions with investors. In reality, the entrepreneur is building the company, and I’ve yet to see a VC who shows up in the company’s office at 8 am and works until 11 pm 7 days/week, so no: they are not “part of the team”. 2. 3. 4. Give it a try, tough guys. Flow Ventures | Canada's Startup Consultants. Banque de développement du Canada. If I Launched a Startup. Here’s what I’d do in the beginning: Incorporation (1) Entity Choice: Corporation or Corporation (2) State of Incorporation: Delaware (3) Authorized Shares in Charter: 10,000,000 Shares (4) Type of Shares: Common Stock (5) Par Value of Common: $0.0001 (6) Initial Founders Issuance: 8,000,000 Shares (7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations (8) Vest Founders Shares?
: Hell Yes (9) Vesting Schedule for Founders Shares: 4 years with a One Year Cliff (10) Consideration for Founders Shares: Cash & IP (11) Handling of “Lost Founders”: Lock Down the IP (then Wish Them Well) Raising Capital (1) Length of NDA: 0 pages (2) Fees Paid to Pitch my Startup: $0 (3) Investors: Accredited Investors (4) Structure of First Capital Raise up to $1MM: Convertible Notes 4 Years with a One Year Cliff is the typical vesting schedule for startup founders’ stock. Authorized Shares is the maximum amount of shares of stock a startup can issue. Ev’s 3 Reasons To Sell Your Startup: Upside, Threat And Choice. Twitter Didn’t Qualify. Do you cash out or stick to your guns? Twitter co-founder Ev Williams says you should only sell your company if the offer captures the upside, there’s an imminent threat, or you personally want to. “Any of them will suffice,” but Twitter didn’t have any, says Williams. In the Medium post, Williams discusses how in 2008, one of the tech giants was interested in acquiring Twitter.
He didn’t reveal who it was, but around that time, Fortune and others reported that Twitter was in talks with Microsoft, Facebook and Google. In an email to Twitter investors, Williams explained his three reasons companies should sell, and why Twitter didn’t have to. The first and most obvious reason to sell is if the financials of the offer capture the upside of your company’s potential. Second, is there an imminent threat to your company? Finally, the companies should sell if the founders really want to. It looks like Williams bet right. Then again, Ev had already sold Blogger to Google and made his nest egg.
8 things your VC won’t tell you. Venture capitalists, especially those investing at the early stage, could be described as “relationship capitalists”. You’ll often hear how investors approach their commitments like a marriage, and that they think long and hard about with whom they want to go to bed. Avoid picturing that second part. But the VC mystique can be inexplicable at times. Why do they send such curt emails? What the #%$! Do they mean by “traction”? Here are some things they might be thinking (but probably won’t flat-out say) during the courtship process, and how you can prepare, take ownership, and rock the pitch. 1. VCs have countless meetings with entrepreneurs, and review even more pitches remotely. Don’t take it personally if you’re met with a semi-blank stare. 2. Speak simply, and get to the point.
Moreover, ensure that the investor does, in fact, understand your business, rather than just thinking so. Of course, the above implies that you know your business and market inside and out. 3. 4. 5. 6. 7. 8. 10 Things You Didn't Know About Marc Andreessen. 10 Views On What To Look For In An Investor. Money - most startup founders need it at some point.
But when you're raising outside capital, cash can come at a very high price if you're not on the same page as your investors. Where many startup founders go wrong in the fundraising process is focusing more on the offer than on who's making it. Thinking about the cash instead of who's investing it. So We asked 10 entrepreneurs from the Young Entrepreneur Council (YEC) to weigh in on what exactly they expect from their investors, and why. 1. Domain, Demand And Delivery While closing a VC-led investment this month, I learned to focus on three key factors when searching for investors: domain, demand and delivery. 2. It's relatively easy to get your hands on money: If you've got an appealing investment, you'll have to beat them off with a stick. 3. I want to know that the investors I work with do what they say they are going to do. 4. I no longer seek the multimillion-dollar Series A round that will lead to a Series B and C. 5. 6. 7. 8. 9.
Kevin Rose Reigns As The Zen Master Of Silicon Valley Chatter. Friday 1 p.m. Heading south on King Street. "This place. I can't believe this place. San Francisco is amazing--ah-MAAAY-zing. So begins the taxi driver's monologue as we speed through downtown San Francisco. Kevin Rose--geek TV host turned Internet entrepreneur turned venture capitalist--try not to grimace. "Well, I'm 35," Rose says. Our cabbie, a sixtyish British expat with a close-cropped white beard and a chipper demeanor, responds helpfully, "There's always today. " Not very long ago, Kevin Rose was one of those kids trying to make a billion dollars before his 35th birthday. Digg vaulted Rose to a kind of fame that had previously been reserved for actors and rockers, and he embraced the role. For entrepreneurs of his generation--and for people like me who made careers writing about them--Rose was the archetype of a new kind of entrepreneur.
Mark Zuckerberg, a cipher straight out of Harvard and Phillips Exeter, Rose was a down-to-earth non-genius whose creativity changed the world. Less is more by Kevin Rose.