Deep Pocket Investor

Even if you give up a significant chunk of your company to get the right management in place, you'll be way ahead for having done it. In my career I've been an accountant, a lawyer, a consultant, a CFO of high-technology start-up companies, and most recently I'm president of a software company. I have been an active individual investor, and over the past 15 years have done 15 investments, roughly one a year, although it's more a matter of accumulating enough money to make the next investment...

Venture Capital Clubs

A complete listing of venture clubs in your region is available at www.icr-net.com, or call (415) 296-2519. Houston Angel Network (HAN). An investment group that conducts monthly meetings. Provides presentation opportunities to Houston area early-stage companies. Founded in 1999, HAN focuses on IT, life sciences, space sciences, and energy. The angel network hosts the meetings for investors to view presentations by prescreened applicant companies. Contact Houston Angel Network, 410 Pierce...

Online Matching And Search Services

Focuses on entrepreneurs and angel investors. Commercial Finance Online (CFOL) boasts the largest business finance search engine in the world. CFOL assists with new referral partner development through a variety of searches, partnering sites, web pages, and links to help fund your business. www.dealflow.com. DealFlow is strictly an information service, not a venture capital firm or a broker-dealer. It offers a free listing to an entrepreneur or a venture in need of capital and the...

Overview Of Deal Terms And Provisions

Entrepreneurs have burned up so much of investors' money that they have to expect more demanding deal terms. Over a three-year period, a 1.5 multiple amounts to a 15 percent annualized return a total that in the minds of venture investors, who have left trillions of dollars on the table, will not cut it. As a result, investors may seek more demanding provisions in hopes of improving returns but in the early rounds of deals, such terms regardless of how onerous most likely will never come into...

Interrelationships of Financial Projections

We recommend that you include pro forma financial statements, cash budgets, and operating budgets. Begin by projecting separate sets of departmental budgets based on current and desired funding. Then develop cash flow, income projections, and, lastly, your pro forma balance sheet. Also, consider developing the projections on a monthly basis for the first year, quarterly for years two and three, and annually for years four and five if you forecast that far into the future. It is critical that...

Stages Of Development Defined

A venture in the idea stage or in the process of being organized. Research & Development. Financing of product development for early-stage or more developed companies. Start-up. A venture that is completing product development and initial marketing and has been in business less than two years. First Stage. A venture with a working prototype that has gone through beta testing and is beginning commercialization. Expansion Stage. A venture that is in the early stage of expanding...

Strategies For Circumventing Negotiation Roadblocks

One way to address valuation issues and mitigate investor risk is to use the conversion ratios that we discussed earlier. One method is through the conversion feature of the preferred stock. Commonly, preferred stock will initially convert on a one-to-one basis at the time it is issued. In the event of antidilution protection on a down round, the conversion ratio will automatically adjust so that each share of preferred stock will convert into more than one share of common stock. This mechanism...