The venture capital fund itself makes money…
…by investing early in a startup company’s life, when success is not at all assured. In exchange for investing capital to help the company grow, the fund receives an ownership interest in the company. Because in the early days a company will not be worth very much, the fund’s ownership interest will be worth exactly what it paid. But as the company grows and becomes more valuable, the value of the fund’s corresponding percentage grows as well. Read more
Barack Obama meets Mark Zuckerberg, photo via Wikimedia
Entrepreneurs are all about firsts, and the most important is you making a great first impression – on investors, customers, new team members, and strategic partners. Poor first impressions can be avoided, but I’m amazed at the number of unnecessary mistakes I see at those critical first introductions, presentations, and meetings.
The key message here is “preparation.” People who think they can always “wing it,” bluff their way past tough questions, or expect the other party to bridge all the gaps, sadly often find that what they think is a win, is actually a loss which can never be regained. Read more
The facile answer to this assumptive question is “because some women are not seeking funding from venture capital firms”.
But there is actually quite a bit of truth in both statements. Women-led ventures definitely account for a smaller percentage of venture investments than do ventures led by men, but women-led ventures also account for a MUCH smaller percentage of ventures seeking funding in the first place! Read more
The biggest change is the one that ALL serious angel investors eventually arrive at: no matter how smart or experienced you are, there are simply too many exogenous factors affecting outcomes for you to be able to pick only winners. Read more
Software Development Process via Wikipedia
Even when your startup is a one-man show and lots of fun, a “business” needs some discipline and controls to keep it from being defined as a hobby by investors, and assure some financial return. Like it or not, you are now entering the dreaded realm of specifying and documenting “formal business processes.” The right question is “What is the minimum that I need?”
The simple answer is that you need to implement one process at a time, starting with those things that are most critical to your business, until you feel a relief that things are starting to happen naturally and consistently, without the attendant stress and continual recovery mode. If you feel that the process itself is a burden, you have likely gone too far. Read more
Sure! There are quite a few senior executives of large companies who are angel investors. Unless there are specific competitive or ethical issues with a particular investment, there is nothing different from their employer’s viewpoint about investing in a private company rather than a public one. Read more
From a completely biased perspective, I’d nominate the nascent and not yet completely visible rise of online equity investing platforms.
While Gust is generally flying under the radar, and currently accounts for an infinitesimally tiny fraction of the marketplace, the actual numbers may be a bit surprising. Read more