Thoughts on startups by investors that
fund them & entrepreneurs that run them

Category Archives: Invested Interests

What percentage of the business should I ask for if I came up with the idea but didn’t have time to work on the business?

As Peter Van Dijck noted, the answer is 0%.  “Ideas” are simply not compensated in today’s business world, because there are so many of them out there—even good ones.

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

In a seed round, is it poor form to accept a lower cap from later investors?

There are a [very] few companies, mostly on the West Coast, that have done convertible rounds with differing caps, but it’s unusual, hard to do, and not something that will endear you to the less-fortunate investors.

5 Clues To Investor-Friendly Financial Estimates

Image via pixabay.com

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they can’t deliver, and having no clue what investors might consider reasonable. However, making no projections, or non-credible projections will get your startup marked as unfundable. I recommend a simple set of guidelines, which work for at least 80% of the business domains I see.

Equally

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What’s actually required to start or close a funding round?

Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. As such, this could cover many different things, such as:

Your parents loaning you money to cover your expenses while you code your product
25 individual angel investors funding a startup on a convertible note
two

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Inventor Entrepreneurs May Be The Rare Exception

Thomas Edison image via Wikipedia

In my experience, inventors and technologists aren’t interested or aren’t very good at building a business, and entrepreneurs aren’t usually good scientists. These people need to find each other, and can jointly make a great team for a new startup. Without the synergy, companies like Apple might never have gotten off the ground.

Historically, it’s also

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Is it legal to have a crowd-funding site that gives equity as reward?

In the United States, equity-based crowdfunding will not be legal until January, 2013 at the earliest, when the SEC issues its rules regarding the process. It will then be permitted, provided that it is done in strict compliance with those SEC rules, and the provisions of the JOBS Act, which was signed by President Obama earlier this year.

*original post can

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Is it a good idea to ask for investments on your webpage?

No, because it is almost certainly against the law or regulations wherever you’re located (in the US it would be called General Solicitation).

5 Entrepreneur Ideas That Investors See Too Often

People are always asking me for an inside tip on Internet sites that will be “the next big thing.” Those are hard, since someone has to invent something innovative, but I do have some views on other ideas whose time has come and gone.

In some cases, these are concepts that have already been done too many times, and the space

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When do you startups begin fund raising?

If founding a startup was easy, there would be a lot more of them, and the percentage that are successful would be much higher.

Unfortunately, it isn’t.

The essence of entrepreneurship is creating a new venture where one does not already exist in the market as you find it. As such, the founding process is one in which the entrepreneur is competing

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How does someone get a meeting with angel investor David S. Rose?

The most useful meetings with an investor are ones where going in everyone understands that there may actually be a rational reason for the investor to be interested. So even if my own mother asked me to meet with you, and you were pitching me a biotech opportunity for a $10 million investment at a $90 million valuation, I might

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