May 2013
1 post
6 tags
Pre-money Valuation: What is it, How Important is...
WRITTEN BY
Roger Rappoport
How important is pre-money valuation? Pre-money valuation is critical when it comes to a funding, since it may ultimately determine whether a founder has a stellar, good, poor or, sometimes, no exit. However important the pre-money valuation, it is not the most important consideration when taking money, particularly when taking it from VC’s. I am constantly asked to...
March 2013
1 post
3 tags
What Is The Appropriate Time Horizon Of A...
When building a financial projection model for a pitch to VC’s, should you include future rounds of funding in the model or simply show what measurable goal you are trying to achieve with the current round you are seeking?
It depends on the stage of the company. But first, it’s important to understand how a VC is going to look at your projections in the first place.
Early and...
January 2013
1 post
4 tags
The Value of Fundraising by David Hornik of August...
The Value of Fundraising written by David Hornik of August Capital
In 2012 my partners and I raised our sixth fund, aptly named August VI. August VI is a $550 Million fund, with $300 Million focused on early stage opportunities and $250 Million designated for what we call “Special Opportunities” (spinouts, take private transactions, later stage opportunities, etc.). As we have...
December 2012
1 post
5 tags
Greentech Venture - Where are all the deals?
Venture is broken. Cleantech is broken. Cleantech venture — surely not a sector to invest in, right?
The Kauffman Foundation recently publicized a widely circulated report highlighting poor venture returns over the past fifteen years. Others point to dismal returns in cleantech (also check out Rob Day’s historical summary of cleantech VC to get a perspective on the current state of the...
October 2012
1 post
3 tags
Great Read by Mark Suster from GRP Partners
Start-up Advice
I usually tell people that everything I learned about being an entrepreneur I learned by F’ing up at my first company.
I think the sign of a good entrepreneur is the ability to spot your mistakes, correct quickly and not repeat the mistakes. I made plenty of mistakes.
Below are some of the lessons I learned along the way. If there’s a link on a title below I’ve written the...
August 2012
1 post
4 tags
Deal Valuation: An Outline For Further Study
EMF uses many of the ideas presented by Spinelli and Adams in creating and financing new ventures. See below for an outline of how we approach Deal Valuation.
I. The Art and Craft of Valuation.
A. The entrepreneur’s world of finance in private markets is very different from corporate finance of public companies.
II. What Is a Company Worth?
A. In the case of...
July 2012
3 posts
4 tags
The Business Plan
Why Do a Business Plan?
Creating a business plan is a great way for you and your current partners to learn about the business and to gain critical insights into each other’s style, strengths and weaknesses, and how you will work together. A plan does the following:
It will document key issues such as the opportunity, the buyer and user, the market and competition, the economics and financial...
2 tags
10 Rules from the Intelligent Entrepreneur
10 Rules of Successful Entrepreneurship
1. Commit first to the ideal of entrepreneurship. Successful founders commit to the ideal of entrepreneurship itself rather than to a single business model or product. That flexibility helps them react nimbly to market feedback, abandoning products and business models that aren’t working.
2. Look for problems to solve before creating business solutions....
2 tags
Blogging 101
It’s easy to build a blog, but hard to build a successful blog with significant traffic.
Here is a great article to get you started:
http://www.seomoz.org/blog/21-tactics-to-increase-blog-traffic-2012
1) Focus on targeting your content to an audience that is likely to share. What is your distribution channel?
2) Identify and participate in the communities where your audience is likely...
June 2012
5 posts
6 tags
How to Approach an Angel Investor - Basic Overview
Deck or Presentation
This is an excellent outline of a deck, from one of the kings of Silicon Valley VC, Sequoia. http://www.sequoiacap.com/ideas
Most angels will want to see an executive summary if not a deck as above; make sure this summary is one page. If the concept is difficult to explain you can use a strip down deck- maybe 5-7 slides as accompaniment. You will also need a presentation...
5 tags
Seeking an Initial Investment From Friends &...
We recommend that entrepreneurs always start close to home.
Quite literally, in fact. What is the conventional wisdom about the risks of investing in a loved one’s business? “Not only do you stand to lose your money, you could lose the relationship if the company goes belly-up, or even if it just goes through the regular stresses of getting a venture off the ground. The conventional...
4 tags
“Road Test Your New Business Idea”
In engagements with startup clients, one of my central goals as a consultant is to identify potential pitfalls in the early stages of business planning. For existing or established small businesses it is often easier to identify and correct existing operational problems than for startups that have yet to implement their model. This is inherently logical- understanding and identifying challenges in...
2 tags
How startups with huge valuations are actually...
A great article by business insider sheds light on 11 of today’s hottest startups and how they are making money. “It’s a mix of straight e-commerce, transaction brokering, and advertising.” “If the startup first builds a large userbase, larger companies will certainly take note, and in some cases, buy you out just to take your users as their own.”
“If...
3 tags
How to Fund A Startup ?!?!?!
“Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.”
“You can do whatever you want with money from consulting or friends and family. With angels we’re now talking about venture funding proper, so it’s time to...
