Comments on: Where is the best source of early stage investment?

By: Kevin

Kevin — Fri, 07 Jul 2017 21:14:47 +0000

Great story.

By: Bob

Bob — Thu, 06 Jul 2017 15:17:46 +0000

Knowing you so well makes it all the more interesting and informative. Thanks!

By: Greg Elofson

Greg Elofson — Thu, 06 Jul 2017 00:40:34 +0000

Dave,

Many thanks for your insight. It sounds like having a board with a variety of perspectives will be instrumental in finding a best, reasonable outcome.

By: Philip LeAnza

Philip LeAnza — Thu, 06 Jul 2017 00:27:00 +0000

The owner of the business can legally do whatever he wants. The investors are not in a position to tell the owner when he should sell. The risk of the investor is trusting the owner will listen to them and do what they want. The owner takes precedent over the investors.

By: Dave Berkus

Dave Berkus — Wed, 05 Jul 2017 22:26:15 +0000

In reply to Greg Elofson.

Greg,
I’ve been in board meetings where the same attitude rom some of the members prevented realization of an immediate opportunity that was excellent – just not 100x. The problem starts with the composition of the board. If all later stage investors, then you will have these continual headwinds as long as the company is moving forward. If a combination of angels, industry resources, and later stage investors, then the conversation will be more nuanced. Statistics show that a sale at $30M is 5x more likely to occur than one at 100M. And I am sure that this is true of any comparative numbers far apart…

By: Greg Elofson

Greg Elofson — Wed, 05 Jul 2017 22:20:00 +0000

Dave, on the other end of the spectrum, how does an entrepreneur amicably create a win-win relationship with investors, which allows the entrepreneur to sell the company when the board is made up of investors who are really looking for only 100x returns — and would rather risk going over-the-top and losing than selling with a “mere” 10x return? (I often whether Foursquare should have sold with that $100m offer that came to them after only operating for 9 months).

By: Gregory Wood

Gregory Wood — Wed, 05 Jul 2017 17:09:40 +0000

Very good points! The weight of responsibility toward early investors who are friends and family is tied to the commitment to maintain the relationships through fairness and transparency.