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 [...]
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 [...]
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 [...]
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. [...]
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 [...]
When it comes to startup advice for tech entrepreneurs, twitterati StartupPro (a.k.a. Martin Zwilling) will probably pop up your mind. Over the past 30 years, Zwilling has led technical business transformations, held a wide range of tech management roles, as well as done due diligence and funding analysis for investors. Though he does little investing, [...]
According to The Deal, “M&A accounted for 70% of the angel investment exits [in 2008], while bankruptcies made up 26% and IPOs 4%.” In a down economy, valuations drop and some companies see it as an opportunity to snap up smaller competitors or to bargain-hunt for startups that are strategically valuable to the acquiring company. [...]
“Angel investing” is sometimes referred to as “private equity investing,” just like “angel investors” are sometimes referred to as “private equity investors.” But don’t confuse angel investing with private equity investing done by private equity firms/PE firms. Angels and PE firms invest differently, although both invest in private equities. Confused? Yah, we thought you might [...]
The year is 1999 where promising dot-coms seem to be popping up in the blink of an eye. The startup your buddy Ken invested in quickly attracted venture capital and on it went to the IPO wonderland. Ken is handing out cigars and telling you his success stories. “I’d be crazy if I don’t get [...]
Relax. Let me explain — Have you ever compared nutrition facts between two grocery products? Although it’s getting better, it continues to be a challenge as each company measures and labels their “suggested servings” and other nutritive facts differently. It can be even more confusing when comparing the financial statements of companies, which is why [...]
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