Why the Series A “Crunch” is Good for the Startup Ecosystem

We’ve all seen the numbers. Measured by any metric: dollars invested, numbers of participants, and average deal size, seed funding is through the roof. Not only are rising numbers of startups setting up and getting seed funding, but the proportion of startups that raise seed funds from outside investors has also increased. Funding Trends There were 1,843 seed deals in 2013 versus 1,749 in 2012 and 1,065 in 2011. From 2010-2013, the median deal size of seed financings went from $800,000 to $1,3 million, as the number of startups raising “seed” financing of at least $3M spiked from 309 to 843. Over the same period, the number of traditional VCs who invested in seed rounds nearly doubled. AngelList, Funders Club, incubators, accelerators, micro and corporate VCs, and dedicated seed funds have all played a role. Newer funding vehicles introduced in the last few years, such as Series Seed Preferred that …
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What Startup Businesses And Wall Street Have in Common

This guest post was contributed by Adam Quinton, CEO and Founder of Lucas Point Ventures. During a conversation with my friend and former colleague Roseanna DeMaria, we discussed how relevant our former careers on Wall Street seem to be in the startup world. Roseanna is an expert in organizational design and transformation, a top leadership guru, and a passionate educator. Startup Businesses: identifying the value proposition While true of any business, but especially for startups and on Wall Street, a strong value proposition is critical for success. As Roseanna noted, it exists on multiple levels: a) The value created by the business model itself b) The value delivered by the talent running the business and c) How the culture/business DNA fosters a mindset around value creation These three are usually inextricably linked and driven by business’ leadership — in a startup context that almost always means the founders. They determine how …
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5 Mistakes to Avoid Making With Your Executive Summary

I get questions from startup founders about executive summaries all the time. They range from “what should I include?” to “how long should it be?” to “where can I get help writing one?” I answered some of those questions in a previous post, Crafting Your Executive Summary, so I won’t rehash them here. But I do want to highlight 5 things that are guaranteed to make you stand out — and not in a good way. Here’s what not to do when crafting your executive summary Don’t outsource the job — While it may be tempting, with everything that you have to do, to try to find someone else to write your executive summary, you really need to do this yourself. An executive summary needs to be a compelling statement of why investors should invest in you and your startup. Doing it yourself will force you to think through your …
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83(b) Elections: A Tool For Managing Startup Taxes

This guest post was contributed by Daniel Peters and Stefan Smith, Partners at Locke Lord LLP. Entrepreneurs founding startup companies are often unaware of a potentially significant tax liability that can rear its ugly head with respect to stock issued to founders and employees. Emerging business founders often acquire their stock through a restricted stock purchase arrangement providing for time-based vesting. However, this common structure may set the stage for an unwelcome and unexpected tax bill down the road. An 83(b) election can, in the right circumstances, provide a relatively simple and effective way to avoid the tax. Startup Equity An emerging business will commonly issue equity to its founders and early employees in the form of restricted stock subject to a vesting schedule that incentivizes those individuals to remain with the company during its critical early years. Unless and until it vests, restricted stock is normally subject to forfeiture …
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Starting Up: How to Set Up Your Startup Infrastructure

How do you put on a professional face, presenting yourself and your business in the best possible light while you’re busy building critical startup infrastructure? In case you missed our webinar, How to Look Professional When You’re Just Starting Up: which featured Jesse Freese, HR and Business Consultant at TriNet, Blair Golson, Launch Director at Cross CampusLA, and EGFS’ Chief Financial Officer Sirk Roh, here’s a hit list of what to do now to win business, attract clients and talent, and generally set yourself up for future growth. First off, what do we mean when we say startup infrastructure? We literally mean everything from technology, to systems to talent, to the actual bricks and mortar of your workspace, plus the service providers you choose to partner with. Having the right systems and infrastructure in place to make decisions nimbly will enable you to minimize risks and easily recover from mistakes. …
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5 Ways Startups Can Retain Employees

This guest post by David Cheng was originally published on ZenPayroll. One of the biggest challenges business owners face in a growing economy is retaining their top employees. Numerous studies show that hiring a new employee to replace an existing worker costs about 20% of an employee’s annual salary. This is why so many companies, in particular those in Silicon Valley, highlight the value of incentives as a way to hang on to their best employees. It’s not just good for company morale; it’s good for the bottom line. At a minimum, perks should help retain employees. The best companies, however, create incentives that embody the company’s culture and inspire employees. We did the research and uncovered 5 tips to make incentives meaningful in your business.   1. MAKE IT PERSONAL For employees, the recognition is as important as the reward. When you tailor your incentives to match the employees …
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Startup Fundraising: The Right Mindset

You know the steps to startup fundraising: Target potential investors Get warm introductions Set up tons of meetings Get serious with a handful of prospects Make your pitch Negotiate your terms Sign term sheets Voila, you’re funded! While this seems straightforward, in reality the process is much more fraught. In the best case, getting funded can take months, and in the worst, you might end your quest without a single signed term sheet. Oh, and have I mentioned that it’s a full-time job? Physical endurance is one thing, but how do you prepare yourself for the mental and emotional toll? Here are my 3 tips to get you from searching to funded while staying sane! 1. Startup Fundraising: Planning The more you organize in advance, the better your chances of startup fundraising success. What’s involved here? I’m talking about strategic preparation. Develop a high level project plan and detailed workflow …
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7 Things To Do Before You Sell Your Startup Business

Originally published in readwrite. Startup acquisitions often don’t go as planned—because the founders don’t know what to expect and how to ensure they’re getting the right deal. While getting acquired is something many young startups hope, dream and sometimes even plan for, the actual deal doesn’t always follow the script. One reason startup acquisitions often don’t go as planned is that the founders may not know what to expect and how to ensure they’re getting the right deal. That’s especially true if it’s an early exit—before the company has fully matured. So we asked seven young founders from the Young Entrepreneur Council (YEC)—many of whom have been through the acquisition process—to share reasons why an early-stage exit might not work out, along with their best advice for making sure things do go as planned: 1. Prepare Records And Documents When there are different perspectives on how a startup business should …
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Micromidas Case Study

Transforming a College Project into an Industry Leading Bio-Tech Company Micromidas Case Study

Enplug Case Study

Managing Key Accounting Functions for Rapidly Growing SaaS Startup Enplug Case Study