Attract more Venture Capital by Avoiding Angel Round Conflict

Written by Mike Sage


Continued from page 1
For example, let's assume that an Angel investor group provides a convertible loan inrepparttar amount of $1,000,000, and one year later a VC buys 2,000,000 shares of stock at $1 per share. The Angels could then haverepparttar 112553 option to convertrepparttar 112554 $1,000,000 loan into shares at a price discounted fromrepparttar 112555 $1 price thatrepparttar 112556 VC paid. Assuming further thatrepparttar 112557 discount is 20%,repparttar 112558 Angels would then convert this loan into 1,250,000 shares of stock at 80 cents per share. This strategy avoidsrepparttar 112559 problem of applying an improper valuation too early inrepparttar 112560 life ofrepparttar 112561 company. Using debt instead of equity for Angels will provide an equitable solution for all investors and help you avoid a major headache. The Angel is protected, assuming that a future investment takes place, because they see an increase inrepparttar 112562 value of their investment. The venture capitalist is pleased becauserepparttar 112563 Angel did not buy stock at an abnormally low price relative torepparttar 112564 valuationrepparttar 112565 VC is applying. And you are content because you have your money and your investors are happy.

Copyright ©2004 by CTC Publishing, All Rights Reserved. Mike Sage, Founder of Capital Now (http://www.venturecapitalguru.com), has been an early stage venture capital investor with two major funds as well as an entrepreneur starting businesses. Mike can be reached at mike@venturecapitalguru.com.

Mike Sage, Founder of Capital Now (http://www.venturecapitalguru.com), has been an early stage venture capital investor with two major funds as well as an entrepreneur starting businesses. Mike can be reached at mike@venturecapitalguru.com.


Building a Relationship---the key to raising venture capital

Written by Mike Sage


Continued from page 1

Today,repparttar investment climate for venture capital is more treacherous than ever as exogenous events inflamerepparttar 112552 anathema to investing---uncertainty. Even duringrepparttar 112553 best of times, a severe lack of knowledge and preparation causedrepparttar 112554 average entrepreneur to struggle with raising venture capital.

If you are able to attract a potential venture capital investor you still need to learn a whole new language and mindset to make it through due diligence and negotiate issues concerning valuation,repparttar 112555 term sheet andrepparttar 112556 final investment agreement. Naturally, your ability to make it through these hurdles will be greatly influenced byrepparttar 112557 strength of your budding personal relationship withrepparttar 112558 VC. Fortunately, professionals are more available at this stage to help mediate if you are able to make it that far.

It is indisputable,repparttar 112559 majority of entrepreneurs who successfully raise venture capital and exploit all it has to offer, learn both to masterrepparttar 112560 venture capital process andrepparttar 112561 venture capital relationship.

The advantage of conducting a capital campaign prepared withrepparttar 112562 help of an expert who can quickly convey and execute on these critical relationship concepts will enable you to break fromrepparttar 112563 heard and optimize your efforts for attracting venture capital. Most ofrepparttar 112564 time they operate in an unofficial capacity and are therefore rare and difficult to find. The best are VCs who have chosen to reduce their investment activities and are willing to work with entrepreneurs.

This is where Capital Now excels. First there is no better source for learning about how to relate with a VC than from a real VC. Our comprehensive manual: Capital Now Complete isrepparttar 112565 foundation of knowledge coveringrepparttar 112566 venture capital process and how a VC thinks as only a VC can tell it. It explains allrepparttar 112567 details for how to screen, contact, meet, talk and negotiate with a VC. A special section featured throughoutrepparttar 112568 book called Investor Thoughts, conveys my specific comments about what your VC is thinking through every step ofrepparttar 112569 process. Then you haverepparttar 112570 opportunity for Mentoring with me to help you with your individual needs and circumstances.

Our clients have benefited by getting throughrepparttar 112571 doors of premier venture capital firms and achieving successful outcomes in less time for less money with less distraction from their business.

Entrepreneurs who successfully raise venture capital learn both to masterrepparttar 112572 venture capital process andrepparttar 112573 venture capital relationship. There is no better way to learn how to do it than to learn from a VC.

Copyright ©2004 by CTC Publishing, All Rights Reserved. Mike Sage, Founder of Capital Now (http://www.venturecapitalguru.com), has been an early stage venture capital investor with two major funds as well as an entrepreneur starting businesses. Mike can be reached at mike@venturecapitalguru.com.



Mike Sage, Founder of Capital Now (http://www.venturecapitalguru.com), has been an early stage venture capital investor with two major funds as well as an entrepreneur starting businesses. Mike can be reached at mike@venturecapitalguru.com.


    <Back to Page 1
 
ImproveHomeLife.com © 2005
Terms of Use