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Angel investors are funding companies at the seed and start-up stage, as venture capitalists retreat from that market, says an angel investor and former entrepreneur.
Numerous factors affect how angels value a company. Primary are the strength of the management team and the size of the opportunity, or a company's potential to scale. Accompanying this article is a valuation worksheet that entrepreneurs can use to better understand what investors look for and to identify factors that can justify higher pre-money valuations. Investors will find it useful to compare companies and determine whether valuation should be higher or lower.
This informative piece explains a well-known method that venture capitalists use to determine "post-money valuation," which is a company's valuation at the time of investment. Perhaps more important, it provides valuable insights into why the returns expected by investors are often perceived as "too high" by entrepreneurs.
We're looking for a champion. A courageous entrepreneur with shoulders broad enough to bear the hopes and dreams of the entire country across the Atlantic to represent America at a global contest of pitching pugilism.
Innovation Fund America (IFA), our program delivering high-impact education, coaching and pre-seed funding to scalable, technology-based startups via community colleges around the country, has quietly been having a big couple of months. It's a complicated and demanding program to launch and it's taken nearly a year and a half to get to this point, but we're excited that IFA is now open for business in two communities--and we're really just getting started.
John Roos, CEO of Wilson Sonsini Goodrich and Rosati, has represented many major Silicon Valley companies during mergers and acquisitions, initial public offerings, strategic alliances, and joint ventures. In this lecture, he describes many of the lessons he's learned since joining the firm in 1988, including building a brand, taking risks, and the importance of integrity.
Chasing an entrepreneurial dream can be an all-consuming effort. Particularly in those crucial early days of a startup, founders seem to eat, sleep and breathe their businesses. This naturally occurring tunnel vision has a purpose, of course, allowing entrepreneurs to give their business babies the time and attention they need to mature. But this heads-down mode is not without its drawbacks, one of which is neglecting to stay up on current events--particularly the happenings that can impact the entrepreneurs who are inadvertently paying no attention to them.
Venture capital certainly has its place within the entrepreneurial ecosystem. Some of our nation's largest companies (and employers), like Apple, Google and FedEx, have secured this form of funding. But plenty of Kauffman Foundation research tells us that VC funding isn't as mainstream in startups as one would gather based on its common place in startup news. In fact, less than 20 percent of the fastest growing young companies ever take venture capital money.
Any entrepreneur who hopes to raise capital from individual investors, so-called "angels," should be properly prepared with a presentation, business plan, list of potential angels, and outline of the opportunity his or her new venture affords. The author explains that it's also important to avoid making such mistakes as allowing investors to have too large a stake in the enterprise. That could cause problems should the company fail, he writes, in an article filled with specific tips for dealing with these financiers.
"If you truly believe in the potential of your company to change the world for the better, there’s no excuse for settling for an acquisition."
I was reading through this month's Inc. magazine earlier when this quote caught my eye. My first thought was to challenge the notion. There are specific occasions when an acquisition is exactly what a company needs to move forward or to move on. This is just how things work, but the bold words sparked my interest enough to turn the page. I flipped to Issie Lapowsky’s feature with Vimeo founder Jake Lodwick. Lodwick was fired a year and a half after selling Connected Ventures, the parent company of Vimeo and College Humor, to InterActive Corp, an Internet company that owns the likes of match.com, Urbanspoon, and dictionary.com. After the acquisition, he felt stripped of his creativity. Where innovation once dwelled, process was introduced. Lodwick was fired a week and a half before he planned to quit. This experience backs his words of advice to entrepreneurs who think an acquisition means nothing will change within the mission of an organization. Lodwick bitterly states that "in fact the mission was lost, and everything will change."
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