All Entries in the "Definitions" Category
M&A Exits: Sell-Side M&A Process
Sophisticated investors always think about exits before they invest. “Does the company have the potential to go public or become an attractive acquisition target?” If not, they’d take their money elsewhere. Going public or IPO means the company raises money by offering stocks to the general public – you know, those stocks that anyone can [...]
Angel Investment Process: Where Do IP Attorneys Come In
Back in April, we met a patent attorney through Greg George, who suggested we do a post on intellectual property. Law? IP? *yawn* Before you doze off, wait! This patent attorney happened to be McGarry Bair’s (@McGarryBair) Tom Williams (@RealGTom), who’s fun, witty, and enthusiastic – not your typical lawyer. In fact, McGarry Bair isn’t [...]
Convertible Debt: A Look at the Angel Deal Structure
Nasim writes: From my understanding, preferred equity and convertible debt are the two main investment vehicles currently used in angel investments. I’m confused as to how to structure my seed investment. The entrepreneur and his lawyer press for convertible notes…that convert into common…but I recall from one of your articles that experienced investors think notes [...]
Investing in SaaS Ventures (Part 1): The Basics
A dear reader, Taliba M., tells us she’s ready to make her second angel investment. She has an eye on a SaaS startup but lacks experience in this area. She wants to know how she should proceed. Read Effective Ways to Invest in the Unknown for our response and the purpose of this series. Taliba [...]
Angel Investing: Dilution in a Down Round (Part 2)
A reader recently asked about dilution and we decided to answer it in 3 parts. Part 1 looks at dilution in an up round; this part examines dilution in a down round; and Part 3 goes over some of the measures you can take to minimize the impact and likelihood of dilution. Here’s the question: [...]
Angel Investing: Dilution in an Up Round (Part 1)
A reader writes – How do you prevent being washed out as you keep pro-rata and the numbers get increasingly bigger? Suppose you invest $200k for 25%. The venture then raises $5m, so to keep pro rata you do $1.25m of that round. Then it raises $15m. Eventually it gets hard to follow you money [...]
Term Sheet: What Da Heck Is Liquidation Preference (Part 2)
In Part 1, we answered Judd Aston’s question on liquidation preference by illustrating how it protects investors’ downside. What isn’t as obvious is that it also prevents the founders from selling early at investors’ expense. Before you click away thinking that you got a lawyer and you don’t need to understand the terms, check out [...]
Term Sheet: What Da Heck Is Liquidation Preference (Part 1)
Judd Aston writes – I was asking my lawyer about liquidation preference and he bombarded me with legal jargon. Fifteen minutes later I still had not a clue what he had told me. So my question is what is liquidation preference? Some examples would be great. Bravo. You obviously understand the benefits and convenience of [...]
Startups Creation and Tech Transfer
What’s technology transfer? Broadly speaking, it’s the process of transferring technology, knowledge, or scientific findings from research labs to commercial sectors. Continuing last week’s conversation on tech-led economic development and research park startup companies, Brian Darmody talks about tech transfer models, the role startups play in facilitating tech transfer, favorite company success story and more. [...]
Do Good – Take a Look at Technology Parks Startups
Some angel investors are in it solely for the money; others are motivated to give back to the community. If you’re the type that wants to do good to the society, take a close look at research park startup companies in your region — they just might be the treasures you’ve been looking to add [...]
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