Micah Baldwin has a great post on the confusing roles and responsibilities between mentors, advisors and investors. It’s a must read for any entrepreneur (particularly those in accelerators where the roles are often mashed together even more.) Micah makes the point that even small investment amounts from mentors ($5-$10k) are important. And he’s absolutely right. […]
Do Investors Invest in Ideas, People or Markets?
Investors often say that they invest in people first, then the market and lastly, the idea. I’d say that’s generally true, but it’s also very difficult not to triage and make judgement calls in reverse. When an investor asks for a pitch, they don’t say, “Tell me why you’ve got what it takes to be […]
Shrinking the Table – How Investors and Startups Are Getting Closer
Too often, investors and entrepreneurs think of themselves as being, “on opposites sides of the table.” Raising capital is a negotiation that regularly pits investors against entrepreneurs (and vice versa). This adversarial relationship is quite common, and the relationship between investors and entrepreneurs (many people describe it as a marriage) regularly falls apart. Sure, when […]
Raising Financing: Convertible Debt vs. Equity
Seth Levine from Foundry Group touched off a debate on which is the best way to raise startup financing: convertible debt or equity. Paul Graham (intentionally or not) actually started things with a tweet, “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done […]
It Doesn’t Matter How Much Money You’re Raising, It’s Still Hard
Things certainly feel frothier these days. More and more companies are raising money, and valuations seem to be skyrocketing. But even in stronger economic times (we hope!) and bubblier eagerness to put venture and angel capital to work it’s still extremely hard to raise financing. And in many cases the amount of money you’re looking […]
Read Early Exits – Exit Strategies for Entrepreneurs and Angel Investors
If you’re an entrepreneur, working at a startup, or thinking about starting a company, you should read Early Exits: Exit Strategies for Entrepreneurs and Angel Investors by Basil Peters. Basil is leading the charge on demonstrating the values and benefits of early exits. He’s definitely showing people — with concrete examples — that early exits […]
Removing the Stigma Around Early Exits
Early exits are typically defined as those in the $15-$30M range. The average Web startup exit is in that range. Entrepreneurs and angel investors generally love early exits. Venture capitalists generally do not. And the reason is simple — If a startup manages to exit in that range with only a small amount of capital […]
Don’t Try to Get Funding Before You Know How It’s Done
If you don’t know how the process works to raise capital and get funding from angel investors or venture capital investors, you will never succeed at raising capital. What this means is that if you feel like raising angel investment or venture investment is critical for the success of your business, you need to go […]
The Art and Science of the Small Exit
Is the “era of the small exit” upon us? I haven’t looked at any data to determine if smaller exits are becoming more common – I would venture to guess that they’re becoming more public by virtue of the publicity surrounding Web-based startups. But regardless of the past, opportunities are growing for smaller exits, and […]
8 Tips for Successful Venture Capital Meetings
Having recently participated in Montreal Startup’s first workshop day for the companies it has invested in, I wanted to share some of the input I provided. The Montreal Startup guys asked me to sit on a panel with serial entrepreneur, Frederic Lalonde and equally-experienced entrepreneur (and ex-VC) Marc Gingras. The panel was moderated by Mark […]
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