All Entries in the "Terms" Category

Angel Investing: Dilution Preventive Measures (Part 3)

This is Part 3 of our quest to answer a reader’s question on dilution.
The 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 [...]

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:
How do [...]

Rob Delman: Remove nepotism from investment opportunity

A month ago just before Christmas, Rob Delman of Golden Seeds (aka the “Golden Dude”) played Santa and dropped a gift packed with pitch preparation tips (for angels) down our chimney. We loved it and so did you. It’s a given – we’re very greedy when it comes to angel investing tips and insights. So [...]

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 what [...]

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 understanding the [...]

Martin Zwilling of Startup Professionals: Angel Investing ABC

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, Zwilling [...]

Bruno Bensaid: “Startups need cash, then value. No cash, they die.”

Whether you visit news sites or flip open the newspaper, you’ll see that Chinese entrepreneurs and the state of economy in China are garnering some serious ink. To learn more about China’s angel investing scene and general investing practices, Venture Hype got in touch with Shanghai-based investor Bruno Bensaid.
Bensaid is the founder of MobileMonday Shanghai, [...]

Term Sheet Clauses: A Necessary Evil

For an angel investor, there is little that is more exciting than putting a deal together, watching the company take-off and then enjoying a tidy profit from the venture. After all, this process is the exact reason most angels get started in this level of investing in the first place. The only problem is, the [...]

International Law Expert John J. Maalouf Part II: Early-Stage Investing in China

Yesterday, globally recognized legal expert John J. Maalouf shared his views on current investment practices in the Chinese market. Today, we tap into Maalouf’s insights on early-stage investing in China.
* Edited interview

VH: John, given the economic downturn, have you seen a shift in the advice or services people look for?
JM: We’ve seen a dramatic [...]

Angel Investor’s Challenge #4: What’s It Really Worth?

Mature companies are like mature race horses. It’s fairly easy to place a value on them based on their winnings. But startup companies are more like foals. You can study their bloodlines and their conformation, but placing a value on them is more an art than a science.
The most successful angel investors have mastered this [...]