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Category Archives: Raising money
Take only “smart money” investments
This statement could be considered controversial. We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. Now we explore the other side of that coin. Professional investors usually bring “smart … Continue reading
Several more real costs of taking outsider investments.
Let’s talk about the reality of taking money from professional investors. It is not the first time we’ve covered this general subject nor the last. But this time, we concentrate upon governance changes. Once a company founder has tapped the … Continue reading
Where is the best source of early stage investment?
If you have been following our recent insights, you’ll be up to speed knowing that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to … Continue reading
Posted in General, Raising money
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What do you give up when taking outside investors?
Taking in angel or venture money requires a setting of an entrepreneur’s expectations that may come as a shock at least at first. From the moment such an investor looks seriously at your company, the investor or VC partner is … Continue reading
Posted in Depending upon others, Raising money
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Does your business need money? Read this!
The subject of raising money is critical to many businesses and a passing option to others, depending upon the capital efficiency of the enterprise. Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% … Continue reading
Posted in Growth!, Raising money
1 Comment
You name the price; I’ll name the terms.
I admit that my dad taught me this when I was just a fifteen–year old kid starting a business and negotiating with suppliers for the first time. But I learned it again and again in my various business lives. The … Continue reading
Posted in Growth!, Raising money
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After 20 years: Updating the Berkus Method of valuation
Well, it had to happen. Originally created in the mid 1990’s to help with the imprecise problem of how to value early stage companies, especially those in technology, I developed what soon became known as “The Berkus Method” when published … Continue reading
Posted in Ignition! Starting up, Raising money
7 Comments
Raise money on good news
The first rule for raising money is to do it on good news – right when sales are increasing at an increasing rate. Or when a major customer signs a significant deal. Or when something happens that makes an investor … Continue reading
Posted in Raising money
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The best advice startups will never follow
Let me tell you a few short hair-raising stories of entrepreneurs who have raised money and regretted it later. Here are some rules that entrepreneurs almost always ignore to their future peril. Don’t take money from relatives who can’t afford … Continue reading
Posted in Ignition! Starting up, Raising money
5 Comments
Stay in touch with your investors.
Investors as a group have a common gripe – almost universal. Information flows from the company irregularly, in fact most often when the company is urgently in need of more money. Investment documents usually call for quarterly reporting by the … Continue reading
