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Why Start-Up Entrepreneurs Never Hit Their Numbers, and What They Can Do About It




[guest post] By Frederick J. Beste, III There is a dichotomy in the world of entrepreneurship which is almost beyond belief: Every start-up entrepreneur believes that he is going to exceed his projections, yet None of them even reach them. I know, I know, one should be very careful in using absolutes like “every” and [...]

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Does Crowdfunding Work for Early Stage Growth Companies?




I guess crowdsourced funding or “crowdfunding” – as it seems to be known – has reached mainstream now that The Wall Street Journal (article), Knowledge@Wharton (article), TechCrunch (article) and The Economist (article) have all written articles on the topic.  The earliest article I found regarding crowdfunding was a Times article from 2008, so the concept [...]

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Weighing In On The Debate Over Standardized Financing Documents




The topic of standardized angel or venture financing documents is is an old topic, for sure.  Most recently, Brad Feld weighed in on this issue back in March 2010 by valiantly offering to take on the task of drafting standardized financing documents, but following a post by his partner Jason Mendelson (along with probably millions of emails [...]

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Apparently, Early Stage Investors Aren’t Endangered – Quite The Contrary!




You may recall my earlier post from a few weeks ago entitled “Are True Early Stage Investors An Endangered Species?“  After laying down some background, I took the position that super-angel funds and incubators/accelerators (e.g., Y Combinator, TechStars, DreamIt), had the best chance of solving the early stage funding gap and that capital efficiencies and [...]

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Dodd-Frank Bill Signed by Obama: Aspects of Individual Accredited Investor Tests Altered




On July 15, 2010, the U.S. Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act“).  On July 21st, President Obama signed this legislation into law.  As you may recall from my previous post on this issue, much concern surrounded this Act because of the proposed changes to the “accredited investor” qualifiers [...]

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Are True Early Stage Investors an Endangered Species?




I think we can all agree that early stage investing has changed significantly over the past 10 years and I don’t see it reversing any time soon.  And by “changed significantly” I mean it is increasingly difficult to raise the $100K – $2M necessary to move from the pre-seed stage (where you likely raised $10-$100K from friends and [...]

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Technically Philly: How DormNoise Founder Jay Rodrigues Raised $500,000 From His Dorm Room




Editor’s Note:  This post originally ran on Technically Philly and is re-purposed here with permission. Two years ago, DormNoise Founder and CEO Jay Rodrigues was fed up with Facebook before it was the cool thing to do.   As the Rhode Island-native was graduating high school and transitioning to life as a student at Wharton, he saw all [...]

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Senators Try to Take Bulldozer to Early Stage Financing Landscape




As many of you know by now, Sen. Chris Dodd (D-CT), Chair of the Senate Banking Committee, introduced the following bill on April 15, 2010 - “Restoring American Financial Stability Act of 2010.”  This bill is currently being debated on the Senate floor.  The primary purpose of the bill, and the greater bulk of its 1,410 pages, is devoted to [...]

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Understanding Liquidation Preferences




A liquidation preference is exactly what it sounds like, priority treatment for certain stockholders upon the liquidation, sale, merger, IPO or dissolution of a company.  It is a typical Series Preferred Stock right in venture financing transactions.  As I’ve stated in earlier posts, I believe that liquidation preferences are a top negotiating priority at the term sheet stage (I actually believe that this provision [...]

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Scotty, We Need More Traction! Capt’n, What’s That Mean?




The lexicon and jargon of the venture world is a frequent topic of articles and posts.  It changes year-to-year, or with each up and down cycle.  In the mid to late 90′s the buzzwords were ”eyeballs,” “paradigm shift,” “new economy,” “bricks-and-mortar” and the ever present “synergy.”  During the latter half of 2009 up to the present [...]

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