Posted by Black Squirrel on 2008-05-27
Tags: Preparation Liquidity Model
"This Way to The Egress -> "
- P.T. Barnum
An important part of your presentation to investors is the exit strategy; to wit, how are the investors going to get their money back"
Devote a couple of those 16 precious PowerPoint slides to the exit. Show comparable companies to the one you plan to build, and their acquisition dates, prices, capital raised and the excellent financial return to *their* investors. Show that you know the names of the prospective acquirers in your space. Show that you understand the way multiples of revenues and earnings are calculated for acquisition prices in your sector. Don't talk too much about IPOs....PRIVATE: Members Only (494 Characters)
Posted by daithic on 2007-09-06
Tags: Preparation Intermediaries
I wanted to agree with the great suggestion of Gronk - it would be great to see a similar site rating Investment bankers. My experience is they are not a value add to the funding process in general but it would be refreshing to hear if anyone has had a good experience.
The other element to this is people's experience in using advisers, i.e., who are the good ones out there.
Posted by Bruce Kasanoff on 2009-01-27
Tags: Preparation Strategy Marketing
In the middle of trying to launch a start-up (The Goal Mine), the deepening downturn has pulled me back to a practice (Now Possible) that has become more timely than ever: re-positioning companies.
As I look around the entrepreneurial landscape, what surprises me is how little substantive re-positioning has occurred... yet. The world has shifted, dramatically. The rules have changed. And yet most firms are pretty much still pitching the business model they developed before last fall. 95% of the time, that's not going to work.
This new world creates its own opportunities. All is not gloom and doom, unless you fail to acknowledge how much the rules have changed. Rents are going down. Lots of talent is available. People are willing to take chances (largely because they have no choice.) But at the same time, everyone has both hands on their wallet.
How should your firm re-position itself today? Whatever you decide, that decision should ripple quickly through your pitches, your sales materials, your product/service offerings, and even your pricing sheet.
One thing to keep in mind: hope is not a strategy. Hoping you'll get funding and find customers even though you did not change your positioning, well, that's not much of strategy. Basically, the entire world is taking a 50% pay cut. So what do you do differently?PRIVATE: Members Only
Posted by Anonymous on 2008-07-12
Tags: Preparation Resources
Posted by ReZ on 2008-03-17
Tags: Preparation Experience
Inquiring your investors overall web experience before presenting your web site project is essential for communication. Ask your investors about their favorite web sites, web 2.0 tools and programs. It turns out that not many investors out there are web savvy. Make sure you clarify this as early as possible.PRIVATE: Members Only
Posted by Muckraker on 2008-01-22
Tags: Preparation Control Humor
Do you know what the Golden Rule is"
The Golden Rule is:
THE GUY WITH THE GOLD RULES!!
Another words, the VCs usually end up with control of your company, especially if you have to raise alot of money from them. Since this is usually the case you should take particular precaution in selecting who is going to greatly impact your success. A High Standard of ETHICS and Good and Fair JUDGEMENT in difficult situations are the two most important traits to look for in picking a VC investor to join your board. The only way you can figure these things out about a person is to check several references on them. References of CEOs and founders that they have funded in the past. Not just references they give you but references that you find on your own due diligence. You can be sure that many VCs do not have a high ethical standard and could care less if you are treated fairly as a founder or member of the management team. Many do not care if you make any money on your deal and they would just as soon rob you if they could get away with it. Dont get me wrong, there are many fine VCs to work with but there are also many that are not.
It is partiularly important to get honorable investors that have these traits in your in the Series A round becuase they will often set the standard for board behavior as other VCs join your board in later rounds. Also, qaulity investors attract more quality investors to your deal as you raise more capital. Dishonest investors attract more of the same.
When your company hits troubled waters on the road to success, AND THEY ALL DO, then you will be thankful for having taken the time to get investors that will stick with you through HELL and HIGH WATER.
So you get your first term sheet and you are so excited to get some funds that you dont do your homework on who you are letting into your company...DONT DO IT!! Check references thoroughly or potententially pay a big price.PRIVATE: Members Only
Posted by MedTech Expert on 2008-01-01
Tags: Preparation Hedge Funds
1. Generally lack hands-on business building know-how. Provide little if any problem solving capability.
2. Are use to getting into and out of stocks (public) quickly and do not like being in the "roach hotel" when things get tough. Will be hot and cold on investing in future rounds unless they stand to lose alot.
3. They travel in different circles so their networks are generally useless for start-ups.
4. Provide little if any operating advice - recruiting, compensation plans, insurances, MIS, etc. - as they have no resources or experience to draw from.
5. Are generally overcommitted and do not provide the commitment as other board members.
6. Some parade as venture investors but as part of a larger private equity fund, I can assure you they are not.
Posted by RichieBlueEyes on 2007-12-14
Tags: Preparation Lawyers Friends
Lawyers are great - when they are on your side. They are horrible when you are just a toad in their collection of clients. Find an honest lawyer and become friends. You need someone on your side. At the end of the day, the term sheet will come down to negotiation, I would rather have a shark of a lawyer who has my interest at heart negotiating the terms then me. Why" He can get away with being an ass and I can't. Pretty simple, eh"PRIVATE: Members Only (288 Characters)
Posted by wwjd on 2007-08-18
Tags: Preparation Materials Metrics
One of my largest challenges in fund raising is determining what is "normal" and setting my expectations accordingly. I proposed that we collect metrics by partner on some of the more standard aspects of pitching and closing a deal. Granted, deal quality, firm expertise, market conditions, and a thousand other variables affect funding. However, by specifically outlining practices and behaviors of firms and partners during and after the pitch process, we can greatly improve the effectiveness of our time and efforts in fundraising. As an example, if we know that for firm X and partner Y, it takes on the average of 4 weeks and 6 phone calls to get a yes/no response, then it makes it much easier to know when the firm is either hot on an idea or when it is time to just move on. (See the private section for a list of proposed questions and answers.)PRIVATE: Members Only (2603 Characters)
Posted by Anonymous on 2010-06-15
Tags: Preparation Incubators Equity
Posted by Anonymous on 2009-02-27
Tags: Preparation Early Stage
Posted by Anonymous on 2008-12-12
Tags: Preparation Venture Debt
Posted by Anonymous on 2008-10-24
Tags: Preparation Financials Terms
Posted by Anonymous on 2008-08-24
Posted by Anonymous on 2008-08-14
Tags: Preparation Income
Posted by Anonymous on 2008-07-16
Tags: Preparation Lawyers
Posted by Anonymous on 2008-07-05
Tags: Preparation Founders Compensation
Posted by Anonymous on 2008-07-01
Tags: Preparation Materials Busines Plan
I am preparing my pitch my business to some VCs and I've got a 30-slide PPT ready. I'm reading through the threads here and seeing that a business plan may or may not be necessary anymore. I don't have one at the moment but am thinking of starting the process and write one if someone asks to see it. What do others think of this strategy"
Posted by Anonymous on 2008-05-22
Tags: Preparation Location
Posted by Anonymous on 2008-05-14
Tags: Preparation Lawyers Accountants
Posted by Anonymous on 2008-02-18
Tags: Preparation Targets Resources
Imagine raising capital, having a fast growing business, and then not being able to raise further capital because your existing investors have no "dry powder" to make future investments. These "walking dead investors" may scare off new investors because they do not participate, and they may even block new financing deals to maintain their equity position. Guess what. It happens a lot, and it happened to me.
The NVCA predicts that the number of venture firms will decrease, so this problem is only going to get worse:
"Most respondents believe the industry will consolidate further in 2008 with 57 percent predicting the number of venture firms will decrease next year. Those that remain will be raising the same size or larger funds according to 84 percent of venture capitalists polled. Only 16 percent believe funds will be smaller next year."
What do you do" Members, read on...PRIVATE: Members Only (1653 Characters)