First-time entrepreneurs don’t always understand that outside investments come with a whole new slew of responsibilities and relationships. This is made quite clear by venture capitalists, where the norm is monthly board meetings for the first year or two after an investment closes. For Angel-backed startups, too often the investors’ expectations for communications are not met by the...
In general, driven by regulations and risks, standard legal contracts grow and grow in complexity until they become unworkable. In the world of private investments, we’re at, if not past, that point. In the U.S. (and most of the developing world), private investments into startups and funds is regulated, allowed only by rich and/or experienced investors. “Private” in contrast to the public...
Sitting here at Impact Hub Seattle, a member of Toniic and Investors Circle, and a teacher at Pinchot, I’m surrounded by thousands of entrepreneurs, investors, philanthropist, and employees who all work for mission-driven organizations, both nonprofit and for-profit. The one commonality across all of that is that everyone has a mission. Back in my days in tech, this wasn’t true, at...
My 2016 is shaping up to be quite exciting: Aviary.vc – To keep up with the growth of impact-oriented entrepreneurs, Aviary is a new venture capital seed fund, focused on mission-driven for-profit conscious companies, i.e. companies that do good by doing business. If you are an accredited impact investor (or wondering how to do that), we’re building a community of co-investors. Contact us for...
Outside of California, where it feels like all investors are professional investors, and following up on last week’s post about one difference between Angel and professional investors, another difference is the way the deal terms get set, especially valuation. First-time entrepreneurs don’t understand how startups gets valued. Neither do first-time startup investors. In my MBA class...
As an entrepreneur, I’m well experienced at wearing multiple hats and in such, in viewing companies through a multitude of lenses: production, marketing, sales, finance, etc. The same is true as an investor, where I swap between two distinct hats: Personal and Professional investor. You’d think these two hats were identical, but they are not. They are complimentary, but are two quite...
An ongoing discussion during the Investors Circle trip to Nairobi was about the tradeoffs between the companies founded by Africans and those founded by Americans, Europeans, and Indians. We met a few of both, and thus had a first-hand look to make (anecdotal) comparisons. Overall, the consensus was that natives like GreenChar and Totohealth had the advantage of deeply understanding their market...
Entrepreneurs fret over the 30-second “elevator pitch”. In my twenty years starting startups, I did twice pitch in an actual elevator. But here in 2016, entrepreneurs should be fretting more over their 140 character, one-line “tweet pitch”. Why is this so important? Simple. Your startup is going to listed on a dozen sites online, and all of them will include that one-line pitch: LinkedIn, Angel...
The more one dives into startup investing, the most one finds Catch-22’s. This post is about the tradeoff between being inventive and copying a known business model. Novelty. The risk-averse investors who make the high-risk investments in startups tend to like new ideas. They are early adopters of new ideas and new technology. They enjoy the excitement that comes with novelty and...
The last time I presented at an event for investors, the first five people all asked me the same question, “Any exits yet?” The more years I spend focusing on revenue-based investing, the more that question is getting on my nerves. Perhaps some of that is on me, as the talks I give are generally titled “Investing without Exits” or “Alternative Exits” or...
