Author Archives: Dave Berkus

The Berkus Method: Valuing an Early Stage Investment.

Posted on March 25, 2012 by Dave Berkus

The Berkus Method was updated in November, 2016, and is available here… For those of us who’ve invested in early stage companies, especially technology startups, we have confronted a universal problem.  There are many ways to project the value of … Continue reading →

Posted in Ignition! Starting up, Raising money | 17 Comments

Address the five risks to increase your valuation.

Posted on March 15, 2012 by Dave Berkus

In the creation of a new enterprise, there are five principal risks to be addressed by the entrepreneur.  Professional investors will probe these five risk areas and make the decision to invest based upon comfort with each.  So it is … Continue reading →

Posted in Finding your ideal niche, Ignition! Starting up, Positioning | 4 Comments

Beware the “dirty cap table.”

Posted on March 8, 2012 by Dave Berkus

When you seek professional investors, whether organized angels or venture capitalists, one of the early questions you are asked is “How have you financed the business so far?”  Investors love to see entrepreneurs who have used their own money to … Continue reading →

Posted in Growth!, Raising money | 6 Comments

Personal Guarantees are a fact of life for many entrepreneurs.

Posted on March 1, 2012 by Dave Berkus

Starting and running a small or growing business can be a challenge to the most confident and optimistic entrepreneur.  And the process of borrowing money or financing asset purchases can be an eye-opener for those who are not used to … Continue reading →

Posted in Growth!, Protecting the business | 4 Comments

Consider all resources before seeking investment.

Posted on February 24, 2012 by Dave Berkus

I cannot tell you how many times I have seen executive summaries of business plans in which the entrepreneur seeks $5,000,000 to build the business. First, few startups can use that much money today with all of the virtual services … Continue reading →

Posted in Ignition! Starting up, Raising money | 3 Comments

Be approximately right rather than exactly wrong.

Posted on February 17, 2012 by Dave Berkus

I love this statement from John Tukey, coiner of the word ‘bit’ to describe a single switch of digital micro-data.  Tukey was a statistician, one you would expect to describe events in terms reeking with precision. Instead, Tukey implored us … Continue reading →

Posted in Finding your ideal niche, Growth!, Positioning | 1 Comment

Is it the jockey or the horse?

Posted on February 10, 2012 by Dave Berkus

                Early stage investors have been arguing over this for years.  Do they bet on the entrepreneur (jockey) or the business idea and plan (the horse)?   This is serious stuff.  If you are looking for money, this question will certainly … Continue reading →

Posted in Raising money | 3 Comments

Learn the science – practice the art of negotiation.

Posted on February 3, 2012 by Dave Berkus

From the time we learn to manipulate our parents from the crib to the present day, we learn to negotiate to obtain our wants and needs.  As we grow, we negotiate constantly with our parents, then with our peers.  As … Continue reading →

Posted in Depending upon others, Positioning, Surrounding yourself with talent | 8 Comments

Watch out for the gray areas in non-competes.

Posted on January 27, 2012 by Dave Berkus

   What if you are the seller of a previous business or shares amounting to more than an insignificant percentage of a previous business?  Certainly the buyer’s asset purchase documents included a non-compete clause, usually valid for two years from … Continue reading →

Posted in Depending upon others, Ignition! Starting up, Protecting the business | 1 Comment

What about previous company non-competes?

Posted on January 20, 2012 by Dave Berkus

Entrepreneurs tend to remain in the business arena they came from.  Some are alumni from companies that would be a competitor to the enterprise being created or joined.  And some are former selling shareholders of just those businesses.  What is … Continue reading →

Posted in Depending upon others, Protecting the business, Surrounding yourself with talent | 3 Comments