Many exits happen at much lower than expected values. Even a three or four fold increase in company valuation may not produce positive returns for the early risk-taking investors. Angel investors and first-round investors are taking it on the chin all too often. Here’s how to stop it.
Archive for the ‘Business Blog’ Category
Better Terms = Better Outcomes
May 12th, 2014 
Mike 
Posted in Business Blog, posts 
Tags: dilution, down round protection, Shareholders Agreement, term sheets 
Comments Off on Better Terms = Better OutcomesMaking the Business Case
March 9th, 2012 Mike Thinking about starting a business? Why? Can you explain what the business opportunity is and how you will make money? I hear hundreds of pitches every year from budding entrepreneurs. Their main challenge is making the business case.
The Importance of a Shareholders Agreement
December 31st, 2011 Mike Shareholder Agreements are important because they define how a company will be governed. They are especially important when one shareholder or a group of shareholders controls the company by having more than 50% of the votes. A shareholders agreement gives minority shareholders certain rights.
Business Basics – Negotiating a Term Sheet
September 7th, 2011 Mike A “Term Sheet” is a document that summarizes the terms of an investment. It’s usually proposed by the investor(s) and spells out what they want in order to proceed with an investment. I’m not sure why it’s not called a “Terms Sheet” since there are many terms in it. Perhaps that came about because the […]
Posted in Business Blog Tags: angel round, investment agreement, term sheet, valuation, vesting, writing a term sheet, wutif No Comments »Shares vs Stock Options
May 30th, 2011 Mike This article discusses the tax issues around issuing shares vs granting options to employees of both public and private Canadian companies. There are major tax implications that are unknown to most people – including the politicians who are trying to encourage entrepreneurship.
The Valuation Question
March 1st, 2011 Mike What’s my baby worth? Figuring that out is the biggest challenge entrepreneurs face when attracting investors. Many negotiations break down over this issue. The good news is that there are contractual mechanisms that can be used to resolve any disparities.
Posted in Business Blog, posts Tags: angel investor, dilution, seed investors, start-up capital, valuation No Comments »Business Basics – Introduction
January 1st, 2011 Mike Over the years, I’ve written a number of articles to assist entrepreneurs, especially tech entrepreneurs, with an understanding of business matters. On the Simon Fraser University Website, much of this can be found at www.sfu.ca/~mvolker/biz. These articles are in the process of being updated, with new ones added, and will gradually start showing up on […]
Posted in Business Blog, posts Tags: Business Basics, entrepreneurship, start ups Comments Off on Business Basics – IntroductionBusiness Basics – Better Boards Build Better Businesses
Mike Good corporate governance – having an active board of directors – is essential in building a good company. Assembling a capable board should be done sooner than later. Why?
