Tag: startup
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Of Mice and Mentors
There are a ton of positives that mentors provide startups, as no one person innately has the skill set and/or experience to run a successful company. But if there is an incubator bubble, does that beget a mentor bubble? Mentors at incubators should be in it strictly to pay it forward and most certainly are.…
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Non-Dilution Rights are Wrong
I hate non-dilution rights and if you are an entrepreneur you should, too. I’m not talking about price-based anti-dilution protection that is typical in an angel or VC round. What I’m referring to is a right given to a particular stockholder so that such stockholder’s equity in the company is not diluted by any future…
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How to Evaluate a Startup Accelerator Offer
Great news — your startup just got accepted to an accelerator! But before your startup signs up and cashes that $[25,000] check, your startup’s co-founders should sit down and evaluate the accelerator offer. The following are some issues to consider and actions to take before accepting an the accelerator offer: (1) Calculate Valuation and Determine…
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Term Sheet Purgatory
There’s plenty of advice on (1) how to attract VCs and (2) how to negotiate a venture capital term sheet. What gets less attention is the messy middle, the period between an investor expressing interest and you actually receiving a term sheet. I call that waiting period term sheet purgatory. Term sheet purgatory is an…
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November Rain
Axl Rose started working on “November Rain” in 1983, about eight years before Guns N’ Roses released it. Early on, he had a piano-only version. By 1991, the final track was a full-scale power ballad that fit the moment and the band’s sound. What worked as a concept in 1983 still worked in 1991, but…
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Why a Finder is a Loser
When a startup considers paying a “finder” for investor introductions, I usually have the same conversation with founders. It goes something like this. A typical conversation about a finder Startup: A finder knows a lot of investors and will introduce us if we pay 6% of any capital we raise through those introductions. Me: Is…
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Dealing with a Startup Creeper
Advisors are great for startups. They can provide your startup with guidance on a wide range of topics and typically take a seat on your startup’s advisory board. But sometimes a person who gives your startup infrequent, casual advice will broadcast to the world that he or she is an advisor to your startup in…
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Filing a Charter Is Not a Startup Incorporation
I’ve noticed a lot of recent articles promoting that a startup can “skip the lawyer” and incorporate via an online service. These sites typically list about 20 incorporation tasks they’ll do for your startup for around $250 plus the applicable state filing fees. Sounds like a great deal, but there is more to a proper…
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Angels Asking For Control
Occassionally, a startup will get a term sheet from an angel with a pre-money valuation less than the investment amount (i.e., the angel wants control of the startup). And “control” isn’t just defined as a majority of the shares of the company — if the angel asks for approval of all budgets & hires or…
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Series A Startup CEO Salary
A startup’s CEO’s $500,000 Salary Burns Startup Into Fire Sale. The Importance of Startup CEO Salary The startup community focuses most of the term sheet discussion on liquidation preferences and anti-dilution, but startup CEO salary is nonetheless an important issue. According to Peter Theil, Startup CEO salary is a predictor of a startup’s success: “The…