One of the fun things about co-authoring a blog is that you get to modify / improve or even disagree with the responses of your co-author. Jason and I have been working together since 2000 so we’ve had plenty of chances to discuss, argue, and disagree – one of the things that I love about […]
Question: Our company is trying to close series A funding of approx. $1M by April 30. VC’s we have spoken to say the amount is too small and to contact them at B/Mezzanine stage? What does this mean? Are there options for us? Our Take: The reason you are having trouble raising that amount of […]
All, we’ve been tremendously happy with the response to our new site. Thanks to everyone who has asked questions, told their friends and linked to us. We’ve seen multiple questions regarding two issues: compensation and angel deals. On the compensation side, people are wondering how ownership is spread out between founders and executives, how much […]
Question: Do VC and Private Equity Funds have to invest in C-Corps, or can they invest in S-Corps and LLCs? Our Take: Most often, C-Corps rule the day. S-Corps can only issue one class of stock meaning that VCs and PEs can not get get the benefits of liquidation preferences and other preferred terms. For […]
Question: Have you heard of cases where companies buy back shares from a VC, much like buying back shares from a founder? Our Take: Yes, but the situations usually aren’t pretty. If the company has the cash to buy back shares from the VCs (at their cost or above), then the company is doing well […]
Question: What are the risks associated with funding an Angel round without a PPM? Assume the round is under $250k. Any resources you’d recommend looking at or people to talk this through? Our Take: Few deals these days (at any size) have PPMs written for them. The costs (legal, accounting and management time) just don’t […]
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