So your company’s in its very early stages. We’re talking a skeleton crew of staff, minimal sales, and even less cash. While your focus is understandably on immediate survival and how you can hit your first big hurdles, what else should you be thinking of, especially where your finances are concerned?
Author Archive: David Ehrenberg
How will you know when to revise your business plan? The short answer is that plans are living documents and should be constantly evolving. That being said, there are certain times when major, rather than incremental change, is called for. How do you distinguish between the two? Below are unmistakable signs, or forks in the road, that should prompt you to substantially rethink your plan.
The relationship between investors and founders can be tricky to navigate. At the best of times, it’s symbiotic, leading to gains for both sides. At others it can degenerate into a test of wills, or worse. How can you forge mutually beneficial, productive relationships with VCs that make best use of your respective strengths and effectively utilize your time?
We’ve all heard some variation of the quip that overnight success actually involves years of striving, with presumably several failed efforts and false starts along the way. But when entrepreneurs experience failure, whether it’s their first encounter with it or an especially spectacular failure, it can be a major blow financially as well as emotionally. Here are my thoughts on how to recover from a significant business setback.
For start-ups looking to grow (and which ones aren’t?), getting the first term sheet can be a critical milestone in nurturing a successful business. In this post, we are going to take a look at the contents of a standard agreement, variations, and common pitfalls. We are going to keep it simple here and literally stick to the ABCs. Things to keep in mind: Anticipate investors’ concerns and information requirements; Be aware of the pitfalls; remember that all agreements are Conditional, with the terms subject to change.
Investors like milestone funding as it makes clear how much money you will need and what you’re going to do with it (which inspires confidence that they will see a return on their investment). It also helps to keep you on track, and, because it keeps you from raising too much, it keeps your dilution as low as possible.