This document discusses various sources of financing for startups, including self-funding, crowdfunding, equity financing, venture capital, business angels, and debt financing. It provides details on bootstrapping, the different types of angel and venture capital investors, and common terms in VC deals like liquidation preferences, blocking rights, and warrants. The document also notes that while hundreds of thousands of startups are formed each year, only a small fraction receive venture capital funding.
Cashing in - how to make money investing in startupsOurCrowd
Join Zack Miller, Head of the Investor Community at OurCrowd, and David Stark, Investment Associate at OurCrowd, as they discuss the investment strategies necessary to build and maintain a successful startup portfolio. By nature, startup investments are a high risk/high reward asset class. Knowledge, therefore, is key in maximizing your profit potential when investing in startups.
Join us to learn:
The startup math that investors use to get rich
Understand how companies' valuations change over time and what that means for your investments</li>
Learn how OurCrowd and other startup investors see an eventual return on their investment and how those returns are calculated
This webinar is appropriate for both investors and entrepreneurs alike.
OurCrowd's Portfolio RESERVE: Making investing easier by putting the investme...OurCrowd
Join Zack Miller and Danna Mann -- executives at OurCrowd, the leading crowdfunding platform for Israeli startups -- for an introduction to OurCrowd's new product, Portfolio RESERVE. Interested investors can use Portfolio RESERVE to make a one-time investment with minimal paperwork to guarantee you never miss an opportunity.
Join us to learn about the Portfolio RESERVE:
You decide how much you'd like to invest in OurCrowd companies
Get automated allocation to future investment opportunities
One time funding, limited paperwork
You retain ability to opt-out of any deal
You'll also have an opportunity to ask questions about our process and startup investing in general.
4 active vs passive advisor insert funds flows dfa (advisor present) p. 1-3, ...Weydert Wealth Management
This excellent article contains three key graphics illustrating how average investors flow into and out of investments at the wrong times and contrasts this with the average DFA investor who remains much more consistent and disciplined.
Cashing in - how to make money investing in startupsOurCrowd
Join Zack Miller, Head of the Investor Community at OurCrowd, and David Stark, Investment Associate at OurCrowd, as they discuss the investment strategies necessary to build and maintain a successful startup portfolio. By nature, startup investments are a high risk/high reward asset class. Knowledge, therefore, is key in maximizing your profit potential when investing in startups.
Join us to learn:
The startup math that investors use to get rich
Understand how companies' valuations change over time and what that means for your investments</li>
Learn how OurCrowd and other startup investors see an eventual return on their investment and how those returns are calculated
This webinar is appropriate for both investors and entrepreneurs alike.
OurCrowd's Portfolio RESERVE: Making investing easier by putting the investme...OurCrowd
Join Zack Miller and Danna Mann -- executives at OurCrowd, the leading crowdfunding platform for Israeli startups -- for an introduction to OurCrowd's new product, Portfolio RESERVE. Interested investors can use Portfolio RESERVE to make a one-time investment with minimal paperwork to guarantee you never miss an opportunity.
Join us to learn about the Portfolio RESERVE:
You decide how much you'd like to invest in OurCrowd companies
Get automated allocation to future investment opportunities
One time funding, limited paperwork
You retain ability to opt-out of any deal
You'll also have an opportunity to ask questions about our process and startup investing in general.
4 active vs passive advisor insert funds flows dfa (advisor present) p. 1-3, ...Weydert Wealth Management
This excellent article contains three key graphics illustrating how average investors flow into and out of investments at the wrong times and contrasts this with the average DFA investor who remains much more consistent and disciplined.
Ambitious entrepreneurs need stimulating ecosystems. Dutch partners in regional economics (Ministry of Economic Affairs, Economic Board Utrecht, Utrecht University) now explore the Dutch entrepreneurial ecosystem. In that system venture capital of course is vital for ambitious entrepreneurs. Don Ginsel (Capital Waters) explains the Dutch situation.
Common Issues and Strategies in Business Breakups (Series: Complex Financial ...Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/common-issues-and-strategies-in-business-breakups-2021/
The Lifecycle of an OurCrowd Investment: Following a Company's Progress from ...OurCrowd
This presentation came from a webinar we conducted February 4, 2014, entitled The Lifecycle of an OurCrowd Investment: Following a Company's Progress from Due Diligence to Investment (and Beyond).
How OurCrowd chooses which early stage companies to invest in
The tools we create for investors to do their own research
What successful investors can do to maximize value AFTER an investment is made
How our portfolio companies receive support from us in future investment rounds
Common Issues and Strategies in Business Breakups (Series: Complex Financial ...Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/common-issues-strategies-business-breakups-2020/
Analysis on an decade of data relating to start-up which would guide the budding start-ups towards the way of success and also provide them the right place for maximum funding.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
Venture Financings 101 (SAFEs, Convertible Notes, Seed and Series A) | Bardia...UCICove
An introductory crash course on the typical legal and business terms involved with, and negotiated in, venture capital fundraising including SAFE, Convertible Note, Series Seed and Series A financings.
The term sheet is the most important document to negotiate with your investors.
However, the excitement that comes from the arrival of the term sheet often serves as a distraction from the finer details — details that can cost you dearly in the future.
For more on these terms, read more on our blog: https://timiacapital.com/blog/14-vc-terms-that-can-ruin-your-startup/
Have a great idea, but not sure how to get funding to turn it into a business? This presentation highlights the many ways to find funding and focuses on the pros & cons of using venture capital to launch.
Ambitious entrepreneurs need stimulating ecosystems. Dutch partners in regional economics (Ministry of Economic Affairs, Economic Board Utrecht, Utrecht University) now explore the Dutch entrepreneurial ecosystem. In that system venture capital of course is vital for ambitious entrepreneurs. Don Ginsel (Capital Waters) explains the Dutch situation.
Common Issues and Strategies in Business Breakups (Series: Complex Financial ...Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/common-issues-and-strategies-in-business-breakups-2021/
The Lifecycle of an OurCrowd Investment: Following a Company's Progress from ...OurCrowd
This presentation came from a webinar we conducted February 4, 2014, entitled The Lifecycle of an OurCrowd Investment: Following a Company's Progress from Due Diligence to Investment (and Beyond).
How OurCrowd chooses which early stage companies to invest in
The tools we create for investors to do their own research
What successful investors can do to maximize value AFTER an investment is made
How our portfolio companies receive support from us in future investment rounds
Common Issues and Strategies in Business Breakups (Series: Complex Financial ...Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/common-issues-strategies-business-breakups-2020/
Analysis on an decade of data relating to start-up which would guide the budding start-ups towards the way of success and also provide them the right place for maximum funding.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
Venture Financings 101 (SAFEs, Convertible Notes, Seed and Series A) | Bardia...UCICove
An introductory crash course on the typical legal and business terms involved with, and negotiated in, venture capital fundraising including SAFE, Convertible Note, Series Seed and Series A financings.
The term sheet is the most important document to negotiate with your investors.
However, the excitement that comes from the arrival of the term sheet often serves as a distraction from the finer details — details that can cost you dearly in the future.
For more on these terms, read more on our blog: https://timiacapital.com/blog/14-vc-terms-that-can-ruin-your-startup/
Have a great idea, but not sure how to get funding to turn it into a business? This presentation highlights the many ways to find funding and focuses on the pros & cons of using venture capital to launch.
Qual è lo scenario attuale delle Start-up in Italia? Quali i trend dell'ultimo anno? In quali settori ci sono più investimenti e quali sono i luoghi in cui si coltiva la cultura del fare innovazione?
Le start up innovative: accesso al regime e disciplina fiscale di favoreP101
Dal ciclo di incontri "Innovazione in Terrazza", che P101 ha organizzato con Chiomenti Studio Legale a giugno 2014, le slideshow per approfondire alcuni aspetti chiave del Decreto Crescita.
How much is your start-up worth? How much capital can you raise? How much equity will you have to give up? What will investor be looking at? What is too little? What is too much?
5 slides, quick and dirty job, far from perfect, but a good starting point.
FEEDBACK WELCOME
Introduction to Entrepreneurship , Entrepreneurship in Action, KTHSerdar Temiz
Introduction to the Course, and What is Entrepreneurship, Why Entrepreneurship is Important, Why this course is important, Expectations, KTH Royal Institute of Technology www.serdartemiz.com
Raising Capital: Negotiating with Potential Investors (Series: The Start-Up/S...Financial Poise
Every business needs capital (cash) to fund its activities. But not all capital is created equal. At the most macro level, a business can raise cash by selling equity or by borrowing (and these alternatives are not by any means mutually exclusive).
This webinar explains the different types of capital available to fund a startup; how to identify potential funding sources; how to evaluate competing funding proposals; and how (and when) to negotiate financing terms. In addition, this webinar will address the kinds of investors for entrepreneurs to consider for their start-ups.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/raising-capital-negotiating-with-potential-investors-2021/
Raising Capital: Negotiating with Potential InvestorsFinancial Poise
Every business needs capital (cash) to fund its activities. But not all capital is created equal. At the most macro level, a business can raise cash by selling equity or by borrowing (and these alternatives are not by any means mutually exclusive).
This webinar explains the different types of capital available to fund a startup; how to identify potential funding sources; how to evaluate competing funding proposals; and how (and when) to negotiate financing terms. In addition, this webinar will address the kinds of investors for entrepreneurs to consider for their start-ups.
Part of the webinar series: The Start-Up/Small Business Advisor 2022
See more at https://www.financialpoise.com/webinars/
How emerging managers can raise capital, hire the best people, sustain profitability and organize for tax efficiency. More here: http://gt-us.co/1qG5Xlu
What Every Entrepreneur Should Know Before Taking Any Outside InvestmentFaisal Hoque
The Hard Truths About Seeking Outside Investment. If you are going to build a company with outside capital, one of the most critical decisions you will make is who will be your investor.
While there are numerous arguments for why you should and shouldn’t raise capital for your business—that’s a topic for a different time—irrespective of the path, every entrepreneur should know some fundamental realities of funding structure before accepting any funding whatsoever.
Funding can actually kill your venture, especially when there is a major disconnect between you and your investor. The disconnect can occur in three major categories.
An Introduction to the World of Venture CapitalScott Tominaga
When startups need funding, venture capital is one option they might consider. Getting funding from a VC firm can offer certain advantages to new businesses that may not be able to get approved for traditional loans. Thanks to the rise of crowdfunding, it’s now becoming decidedly more mainstream.
This form of investment can come in the form of one very wealthy
individual or from a group of wealthy individuals, intent on investing
into a venture that has promising prospects.
To be able to distinguish among the five forms of entrepreneurial capital
To consider how to attract financing from your family and how to bootstrap a business
To identify how informal investors differ from other parts of the funding community
To differentiate between debt and equity as methods of financing
To examine commercial loans, social lending and public stock offerings as sources of capital
To understand the stages of venture investing
To study the market for venture capital and to review venture capitalists’ evaluation criteria for new ventures
To discuss the importance of evaluating venture capitalists for a ‘best fit’ selection
To discuss private placements as an opportunity for equity capital
To examine the business angel market
To describe new forms of entrepreneurial capital beyond financial capital
To be familiar with Islamic finance and micro-credit
To understand the criteria used by impact investors
To appreciate the need for raising natural capital as part of an entrepreneurial venture.
Startup Financing 101: How to get from A to B with 0 or 100?Lubomila Jordanova
The presentation allows you to quickly understand the different financing options that exist out there and consider what is most appropriate for your company.
If you are a Greentech entrepreneur, the place to go of course is www.plana.earth!
Presentation on the investment basics for Startups. Essentials of startup investments, focusing on funding cycles, risk management and investor structures.
Financing Alternatives for Start-Ups and Small Businesses.pdfPay10
Entrepreneurs play an impactful role in the economic development of a country. Their responsibility is not just limited it making their profits but also creating employment opportunities, driving innovation, developing new markets, and innovating new products etc. Entrepreneurs are the valuable assets of the country who initiate to address socio-economic problems and find solutions for them.
Le firme possono raccogliere fondi da molte fonti con svariati strumenti
La politica finanziaria di una firma determina la sua struttura di capitale e pertanto il mix di strumenti finanziari usati per finanziare l’impresa
In primo luogo, le ditte possono raccogliere capitale trattenendo gli utili generati dalle loro operazioni Capitale Interno che può risultare insufficiente per soddisfare il fabbisogno di capitale
Una volta determinato il Capitale Esterno necessario, la firma deve avere accesso ai Mercati di Capitale: mercati di debito e mercati azionari, Debt vs Equity
I diritti dei creditori hanno priorità sui diritti degli azionisti debt claims are senior over equity claims
Inoltre, I pagamenti verso i creditori sono fiscalmente deducibili da cui il noto scudo fiscale degli interessi sul debito
Quick Intro about importance of Business Models and Business Model Innovation and then deeper into Business Model Canvas, Presented at sup46.se for 130 www.sses.se students in Stockholm
Open Data for Digital Activism and Civic EngegamentSerdar Temiz
e-Society: Youth and Media Conference" in Skopje, Macedonia on February 7th and 8th 2014. It is a two-day conference organized by the Metamorphosis Foundation and the Youth Educational Forum, exploring media from a youth perspective, youth led media, media literacy, information quality, digital media activism, music and movements.
I represented Open Knowledge Foundation as Ambassador of Sweden and his topic was " Open Data for Digital Activism and Civic Engagement".
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
2. Is there a universal cure for successful
new ventures and commercialization of
new technology?
• Start up!
• Venture Cup
• Public seed capital
• Incubators
• Business angels
• Venture Capital
2
3. Who or What is the first Investor of your start
up
3
4. Raising Capital
1. Self-funding & bootstrapping
2. Customers (funding growth via retained
earnings)
3. Debt financing (lender charges interest for
money loaned)
4. Equity financing (investor provides money
in exchange for an ownership share)
5. Crowdfunding
6. Other: government grants, business plan
competitions, incubators, etc.
4
5. Five different kinds of services
• ICT-related business models: These Can
distribute services instantaneously to
everyone
•Manual services at many different locations.
•Knowledge intensive services
• Infraservice
•Manufacturing companies integrating forward
Source: Eric Giertz, KTH
6. Bootstrapping
using creative means to obtain resources other
than borrowing money or raising capital from
traditional sources
• Personal savings
• Credit cards
• Creditors (delay payables)
• Pre-payment (sell first, then build/ship)
• Extreme cost controls
• Trade Credit
Source: Bill Snow, Venture Capital 101, Iteration 1.8, February 8, 2004
6
7. Non-Financial Resources for Start-Ups
1. Family & friends
2. Network
3. Alumni association
4. Board of directors
5. Board of advisors
6. Mentors
7. Volunteers
8. Interns
9. Unpaid workers (stock options)
10. Industry experts
11. Incubators
12. Bartering
7
9. Bootstrapping
Pros
• Bootstrapped firms
almost always spend
cash more effectively
than equity-financed
ventures
• Requires being close
to customers, clearly
identifying problems
and solutions
Cons
• Resources for product
development and
market development
constrained by cash
flows
• May miss big
opportunities
• May be left behind by
competitors
9
10. Structuring 3F Deals
(“friends, families, & fools”)
1. Consider the impact on everyone involved
2. Never accept more than they can afford to lose
3. Strictly business (market-based interest rates)
4. Prepare a business plan
5. Settle details upfront with written contract
6. Treat as “bridge financing” to other investments
7. Develop realistic payment schedule that suits all
8. Exit plan: how investors repaid or cash out
Source: Norman Scarborough, Essentials of Entrepreneurship & Small Business Management, Pearson 2011
10
11. Matching Financing with the Venture
3 F’s &
Bootstrapping
• Weak cash
flow
• Low-to-moderate
growth
• Unproven
management
Debt
Financing
• Strong cash
flow
• Audited
financial
statements
• Good
management
• Healthy
balance sheet
Equity
Financing
• Unique
business idea
• High growth
• Proven
management
• High-risk,
high-reward
Source: Bruce Barringer & R. Duane Ireland, Entrepreneurship: Successfully Launching New Ventures (Pearson, 2010) 11
12. Equity Financing
Advantages
• Common interest in success
• No regular interest payments
• Dividends at discretion of
the board
• In absence of profits,
investors do not get paid
• Cannot force firm into
bankruptcy to recoup
investment
Disadvantages
• Founders must share profits
with other equity investors
• Seeking higher return than
lenders due to higher risk
• Investors may interfere
(inquiries, scrutiny, advice,
etc.)
• Founders can lose control
Source: Mariotti & Glackin, Entrepreneurship and Small Business Management 12
13. Angel Investors
invest their personal capital
Examples:
• Individuals with rather small funding
• Angel Investors Networks
• Very rich Angels (entrepreneurs)
- 3Fs
- Angels
- VCs
directly in new ventures
13
14. Angels (vs. VCs)
1. Simpler term sheets, BMC, Business Plan
2. Don’t squeeze as hard on valuations
3. More realistic on time frames
4. Exert less control over the team
5. Exert less financial control over the firm, strategy, and exit plans
6. Don’t add as much money or value as VCs
14
Marty Zwilling, ”7 Key Drivers to the Best Investor for Your Startup,” Startupprofessionals blog, April 7, 2012
15. Vetting an Angel
1. Do they have investment criteria?
Industry focus?
Investment size range?
Geographic focus?
2. Expected ROI & time horizon?
3. Chemistry & fit (values & vision)?
4. Reputation?
5. Can they help you raise VC money in next stages? (relationships)
15
17. Business Plan Funnel
100
business plans come in to VC
10
left after quick screen
1
receives funding after
extensive due diligence
Source: National Venture Capital Association, Venture Impact, Fourth Edition, 2007
17
18. 600,000 new businesses are started in the U.S. each
year, and the number of startups funded by VCs was
about 300. This means that the probability of an
average new business getting VC is about 0.0005
(300/600,000)
Source: http://www.forbes.com/sites/dileeprao/2013/07/22/why-99-95-of-entrepreneurs-should-stop-wasting-time-seeking-venture-capital/
18
19. Investor returns require a successful “exit” or “liquidity event”:
1. Sale of the company ... OR ...
2. Initial public offering (IPO):
- issuing shares to the public for the first time
19
20. “The day you take a dollar or pound or
rupee from most venture capital
investors is the day you have agreed to
sell your business.” -John Mullins
20
21. “The little-known secret is that nowadays
the vast majority of venture capital exits
are the sale of the company to another,
larger company. IPOs happen... but not
very commonly.”
-John Mullins & Randy Komisar
Getting to Plan B
21
22. # of Venture-Backed IPOs vs. Acquisitions: U.S.
450
400
350
300
250
200
150
100
50
Source: National Venture Capital Association
22
12
72
272
427
0
2009 2010
Venture-backed IPOs
Venture-backed
acquisitions
23. what VCs look for
23
industry of focus
Exceptional
team
and/or
Exceptional
technology
Traction/
momentum
24. Investments by Stage: U.S.
Source: Robert Wiltbank & Warren Boeker, Returns to Angel Investors in Groups, Angel Capital Education Foundation; PWC Moneytree Report
24
25. Choosing a VC Firm
1. Do we meet their investment criteria?
What stage of growth do they focus on?
Industry focus?
Investment size range?
Geographic focus?
2. Expected ROI & time horizon?
3. Involvement level?
4. Chemistry & fit (values & vision)?
5. Reputation?
6. Mechanics: who will serve on our board? how many
other boards serving on? Other VCs to work with
on this deal?
25
26. Business plan
submission
Preliminary
decision
Company
visit/meeting
VC Steps
LETTER OF INTENT
TERM SHEET
CONTRACT & FINANCING
Source: McKinsey, Starting Up, modified version of Scheidegger et al., Swiss Venture Capital Guide, 1998-99
26
Analysis & discussions
Due diligence
Contract
negotiations
Support & monitoring
EXIT
27.
28.
29.
30. common VC deal terms
liquidation preference
first claim to all assets & technology if the venture fails (100% preference
over common shares)
blocking
disproportional voting rights over key decisions (e.g., sale, IPO timing)
antidilution clauses (ratchets)
protect against equity dilution is subsequent financing rounds occur at
lower values
warrants
form of investment security which gives owners the right to purchase a #
of shares of stock at a set price before the expiration date
Preferred Stock vs Common Stock
preferred stock usually doesn't carry the same voting rights as common stock, it
does have priority when it comes to dividends and bankruptcy
Bob Zider,”How Venture Capital Works,” Harvard Business Review, Nov-Dec 1998
30