It starts with sharing the opportunity and upside Think of startups and early stage businesses whose entrepreneurs you know. How many of them, particularly in technology, were able to start a company, supply all the funding, and share no management tasks or equity with others, and still grow the company to any significant size, worthy of […]
Equity
An economics lesson for growing companies
Catching up from past insights Growing companies usually require more working capital during their periods of rapid growth. In past insights we have calculated the amount of additional capital needed for a business as it grows, and the additional capital required is often surprisingly large. In this insight, we need to speak of the sources […]
10 Things to Know Before Buying Investment Property
Buying an investment property can be a very lucrative business. There are numerous examples of people making significant gains and profits through a real estate portfolio. But it can also be a highly risky use of your money. And regardless of the size or type of property, your plan to invest in it will almost […]
How Much of My Business Do I Have to Give to an Investor?
If you’re looking for growth capital, this one’s for you. We’ll cover what information you’ll expect to provide, your range of expected values and amounts of investment to expect. All to help you set your expectations. OK? Financial History and Projections Let’s start with the basics. If you are a growing business with a track […]
5 Criteria for Splitting Equity in Your New Venture
I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. You need to find the skills or experience you don’t have in business, technology, or money. So the first question I usually get is what percent of the company or equity […]
Careful About Equity and Options in Early Stage Businesses
This post is longer than usual. For those negotiating equity allocations it covers some of the most complex issues to address in the process. I just couldn’t reduce it to far fewer words… Dave Here is the warning: The execution of partnership equity allocations and of a good incentive program using equity is often mismanaged, damaging […]
Service for Equity Formula
Say you are a service provider—consultant, designer, coder—and somebody offers you startup equity in exchange for professional service. I pondered this question after seeing it on Quora. I turned back to decades as a consultant, and decades dealing with startups, to come up with this sure-proof service for equity formula. Try it. You’ll be glad […]
Are You Getting Your Fair Share of Startup Equity?
I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. You need to find the skills or experience you don’t have in business, technology, or money. So the first question I usually get is what percent of the company or equity […]
Looking for Investment? Understand Startup Valuation
How much equity do I have to give to angel investors? If you’re a startup founder looking for angel investment, you need to understand valuation. It’s a buzzword that people use in other contexts, too, which adds to the confusion. But it’s ultimately what determines how much of your company your investors will get, and […]
The Rule of Thirds
It is rare when one person starts a company, supplies all the funding, and shares no management tasks or equity with others, and still grows the company to any significant size, worthy of a multi-million dollar opportunity to cash out at exit.
