Common Deal Mistakes Archives - The 411 On Startups (tm)

The Pre-money vs. Post-money Confusion With Convertible Notes – Feld Thoughts

Jul

2015

The other day, Mark Suster wrote a critically important post titled One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes. Go read it – I’ll wait. Or, if you just want the paragraph, it’s: “If this note converts at a price higher than the cap that you have been given you agree that in the ...

Concerns of a note holder | Vincent Jacobs

Jul

2015

What angels may worry about when investing in convertible notes Much has been written about the advantages and disadvantages of raising funding using convertible notes versus equity, both for startups and for investors. At Kima Ventures, we often choose to invest using convertible notes due to the speed, simplicity and cost of the transaction but, ...

Angel Worst Practices — 10 Ways to Ensure You Lose Money – Forbes

May

2015

. . . . . . here’s my list of the worst angel investing practices, with a tip of the hat to John Huston and the Ohio Tech Angels, who have used this teaching method for many years. Avoid these 10 mistakes or your angel investments could be losers right out of the gate: Put ...

Angel No More: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

May

2012

Kevin Hartz is sitting this one out. Sure, Hartz is busy with his day-job as CEO of online ticketing startup Eventbrite, but it’s not a time management thing that keeps him from his usual angel-investing habit. It’s more a money management thing. Hartz doesn’t like to invest his when there is so much sloshing around ...

Study Indicates Follow-on Funding Gives Lower Returns for Angel Investors

Apr

2012

In 2007, Professor Rob Wiltbank reported in Returns to Angel Investors in Groups that angel investors made follow-on investment in about 30% of their invested companies. It was surprising for me to learn that follow-on investments correlated with lower returns, that is, angels that made follow-on angel investments saw returns of 1.4X their investment, while ...

How To Be an Angel Investor — Harvard Business School Working Knowledge

Aug

2008

If you want to become good at early-stage investing, you need to learn how to size up the fundamental elements of an opportunity. Many investors use checklists or think of evaluation as a process of judging an entrepreneur, or an idea, or a particular set of facts. Based on our experience in doing over 100 ...

Marketing is not the dark side

Aug

2008

Angels are a little different from venture capitalists because an angel uses his wife’s money and is only good for about $100K. Venture capitalists use other people’s money and invest millions. As an angel, I try to invest in companies whose president is marketing oriented. That doesn’t mean the person has to have a marketing ...

M/E Ratio – Evidence for upstream Marketing investment

Aug

2008

The Marketing/Engineering Investment Ratio™ (M/E Ratio™) was developed for the first annual MIT Enterprise Forum Spring Workshop, “How To Create a Successful New Business.” This new metric separates the functions of marketing from promoting and selling, and installs marketing (market research) concurrently with engineering.