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?
But is using them a good strategy for your business? Not necessarily: it really depends on how you use them. While there are definitely potential benefits, NDAs also have several often overlooked caveats.
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.
There are good times to focus on fundraising and, well, not so good times. If you think that you’re ready to start pursuing investors, you need to make sure that the time is right.
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.
You have probably already absorbed many obvious caveats about setting up your own startup; don’t blow money you don’t have on fancy equipment or splash out on expensive rental space. But what about expenses you’re tempted to cut, but shouldn’t?
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.
Some common startup myths have frequently been debunked, like how running your own company will give you freedom (yeah, right!) or how failure leads to future success (it could, but it’s certainly no golden ticket), and how all an entrepreneur needs is passion (who needs the ability to execute when you have passion, right?!).
Your executive summary is essentially the cover letter to your business plan: its goal is to get the reader to check out your business plan and, hopefully, to set up a meeting. Think of your executive summary as the halfway point between your elevator pitch and your business plan—you have about 2 pages (give or take) to communicate your value proposition and get you to the next stop on your startup journey.
As we find ourselves hurtling towards the end of the year, there are a number of things you should be staying on top of in order to best manage your company finances and position your small business for greater success in the new year.
