Back in December of 2016, we started the “Perfecting Your Pitch” series in conjunction with finishing our magnum opus “Perfecting Your Pitch: 101 Tips for Pitching to Angel Investors”. This book remains, without doubt, the best 101 pitching tips you can buy from an...
Now you know what a valuation is, how do you figure out what your valuation is?The short answer to this question is simply “whatever someone will pay.” It sounds trite, but it’s true.There are plenty of online resources describing the various methods for estimating...
Four, more complexity between “pre-money” and “post-money”Imagine a company that has previously raised a $100,000 convertible note whose terms require it to convert into equity if the company raises $500,000 of equity capital. Now it raises $500,000 on a $2 million...
Third, the “pre-money” vs. “post-money” confusionAngels speaking in terms of “pre-money valuations” can lead to some confusion. Entrepreneurs often think in terms of “share of the company sold” and the cost of that stake in the company. So, for example, they might say...
Second, what is “pre-money valuation”?Angels talk about “pre-money valuation.” This simply means the valuation (that we talked about last time) before this round of funding is being invested in the company. “Pre-money” simply means “before the investment.”Our basic...
Continuing our “back to basics” snippets (see here on basic deal types and here on the types of angel groups), we are going to have a few posts about the “economic” terms of angel investments.First up, what is “valuation” all about?Most people get the basic idea about...
Here are a couple more misconceptions and myths.I don’t have time to be an angel investor. False. Members of our group attend a 2-hour meeting 10 times a year. (Obviously many do more than that serving on diligence teams or reviewing their findings, being active...
This “myth” is true – there aren’t many unicorns in the south east, and none in the Carolinas. There are also virtually no IPOs in the south east – perhaps six in North Carolina and one in South Carolina each year.Certainly if your investment thesis is to find the...
This is too often, unfortunately, true. Startup companies take a long time to mature into middle market businesses that large companies are interested in acquiring. Everything takes longer in a startup – from building up a base of engage clients to replacing your...
Finding deals yourself; conducting your own diligence; negotiating a deal; paying attorneys to create a suite of transaction documents; paying accountants for tax returns each year; chasing management teams to provide the information to monitor your investments;...