Comments on: Think ahead when raising your early investments https://berkonomics.com/?p=3783&utm_source=rss&utm_medium=rss&utm_campaign=think-ahead-when-raising-your-early-investments Dave Berkus' business insights Tue, 02 Apr 2019 18:07:34 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Arthur Lipper https://berkonomics.com/?p=3783&cpage=1#comment-128142 Tue, 02 Apr 2019 18:07:34 +0000 https://berkonomics.com/?p=3783#comment-128142 If an entrepreneur really believes his company will create products and services which be of value to others and that it will therefore become increasingly valuable itself, why would the sale of current valuation ownership be considered, if a sale of a percentage of future revenues be available for the necessary funds?

Royalty investors do not vote as they hold no company ownership. Royalty investors are only interested in the company’s growing revenues. Royalty investors are neither concerned by executive compensation nor the cost of the car the company provides the CEO.

]]> By: Kenneth August https://berkonomics.com/?p=3783&cpage=1#comment-128138 Tue, 02 Apr 2019 16:15:08 +0000 https://berkonomics.com/?p=3783#comment-128138 Thank you, Dave, for this excellent reminder of how important it is to “do it right” when you are structuring your start-up business.

I would add to your list that so many of our early-stage clients come in with “problems” because of how they sold their very first friends and family investments. Many of them are not aware of the regulatory scheme which involves a complex net of both Federal and State securities laws which must be complied with. The company that unwittingly engages in an investment transaction without being in compliance, often loses later rounds of professional investment, or spends a lot of time and money cleaning things up. My advice — see a competent lawyer with securities expertise before you take in your first money. An ounce of protection…

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