Angels invest with hard cash, while founders provide “sweat equity.” Hence, investors often ask for special rights and preferential treatments in exchange for their investment. But this can’t be done with S Corps because, as we’ve noted, only one class of stock is allowed. * This is an excerpt from a special report. Download full [...]
There are some dangerous misperceptions, myths, and outright lies that are commonly told in the industry that lead boards and startup management teams completely down the wrong path, Dr. Basil Peters, an exit strategist, technology angel investor, and angel fund manager for Fundamental Technologies II, tells Venture Hype. He continues: I’m dismayed by how often [...]
A savvy angel investor once told me that before he buys anything – whether it is a business, a house, stocks and bonds, or a lawn mower – he would first determine how he would sell it. Doing that is valuable for 2 reasons. First, it urges him to figure out whether the price of [...]
In this final installment of an 8-part series on royalty (or revenue) based investment — an investment vehicle that features “build-in” exits — we’ll report some final thoughts on the model that some investors hate to love while others love to hate. Haven’t read all of the articles in the series yet? Please do. Previously… [...]
Now, let’s turn our heads to the fanta-bulous entrepreneurs and find out how they can benefit from royalty based financing. We’ll deal with its downsides later in the series. This is Part 6 of an 8-part series on royalty or revenue-based investment (or “royalty based financing”). Please visit Part 1 for links to the entire [...]
This is Part 5 of an 8-part series on royalty or revenue-based investment. Please visit Part 1 for links to the entire series. So what are the main features that turn some investors into a huge fan of the royalty based approach? Let’s take a look. (Yes, we’ll go over the drawbacks later in the [...]
This is Part 3 of an 8-part series on royalty or revenue-based investment. Please visit Part 1 for links to the entire series. By now, you should’ve learned about the 2 exit-dependent investment models used by equity investors; understood why some investors are exploring a new investment vehicle that doesn’t depend on exits; and looked [...]
Image by: boo!berry Sophisticated angel investors strongly favor equity over debt. We already know that. * This is Part 2 of an 8-part series on royalty or revenue-based investment. Please visit Part 1 for links to the entire series. These angels are predominantly equity investors who live by the exit-dependent investment models. No exits, [...]
They’re called private equity investors for a reason. In the world of angel investing, the sophisticated bunch are predominantly equity investors — investors who make money on exits. If they don’t see an exit, they don’t get in. Legendary angel investor Ron Conway, for example, said he won’t invest if he can’t think of five [...]
In Angel Investing as Asset Allocation Strategy: Risks, Returns, Homeruns, we reviewed why angel investing isn’t for the faint of hearts. The risks involved can be quite overwhelming. For the ambitious bunch, though, it’s difficult to resist the attractive payoffs offered by angel investing. If we want to tap into the lucrative potentials and make [...]
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