In our last post, we discussed the basic features of venture debt as an alternative source of funding for startups. This time we turn to the benefits and risks of this type of financing. How Can An Entrepreneur Benefit From Venture Debt? You might consider venture lending as an alternative source to venture capital or...
With venture capital difficult to obtain, more startups are looking at venture debt to finance either growth or equipment purchases. Venture debt involves a specialized financial institution extending a loan to a startup. Traditional commercial lenders are hesitant to give loans to startups because they usually do not have tangible assets. Unlike a venture capitalist,...
In another sign that the secondary market for private company stock is going strong, Elevation Partners will soon complete its third large transaction in the past year. This time, Elevation will buy $100 million of Pandora stock. In June 2010, Elevation purchased five million shares of Facebook common stock for $120 million. Back in November...
Congratulations. You have convinced several angel investors to fund your startup. Do the angels get common stock or preferred stock? What's the difference between common stock and preferred stock? Why does it matter? This deal term has implications for future funding rounds and your relationship with the angel investors and venture capitalists. Common versus Preferred:...
Palo Alto Corporate Attorney Douglas Y. Park discusses three reasons for lower venture capital returns: (1) Weak IPO market, (2) VCs making fewer early stage investments, (3) Fewer VCs have operational experience.
What do venture capitalists like in 2010? Not cleantech. But they are optimistic about more big IPOs and mergers and acquisitions coming through. An article in the New York Times discusses the technology sectors that VCs are bullish on. VCs are excited about startups developing applications for the Android, less so for iPhone application companies....
Will the smart grid develop through proprietary intellectual or open innovation? To what extent can both contribute to the smart grid's growth? The answers to these questions will have a huge influence on how the smart grid works and what it ultimately does for energy efficiency. In this post, I offer a few thoughts on...
In this post, I continue to examine how small businesses and startups can avoid common misconceptions about intellectual property. This time, I turn to patent issues that small and emerging companies must consider to maximize the value they create and capture from their intellectual property. As noted in the previous post, these misconceptions come from...
Small businesses often worry about protecting their intellectual property. Yet, they also hold misconceptions about how to strategically manage their intellectual property. The New York Times recently cited five common misconceptions that small businesses often make concerning their intellectual property. To remain competitive, small business owners need to make smart investments in their intellectual property...
The venture capital industry is downsizing toward smaller and fewer funds. What should the remaining VCs do? What should new VCs do? The answers will have a large influence on entrepreneurs, innovation, and wealth creation. Venture Capitalists Who Raise Money Now Will Win Later In the current environment, raising money is tough, not just for...