How to draw a Personal Budget that worksWritten by Abdallah Khamis Abdallah
Many people spend their little income haphazardly without any planning and end up getting broke before month-end. They then borrow to make ends meet and end up with more problems that they fail to repay their debts promptly. However, this is not a prudent way of managing your personal financial affairs. Planning your personal financial affairs through prioritization of needs and budgeting income and expenses is best way to achieving success in managing your financial affairs. It is important first to assess your financial needs in short, medium and long term. What are your financial objectives? What do you want to achieve in course of time? Do you have any targets? What are your short. medium and long term needs? List all of them down. Next categorize income and expenses on a monthly basis. Then prioritize expenses into most important, important and most important. You can use any other weighting or prioritization formula that works best for you. After this assess costs based on consumption per month. Put figures to expense items. Then write down your income sources and amount you earn per month from them. List income on left and expenses on right. Add up income amounts against expense amounts and find difference to determine surplus or deficit.
| | Attract more Venture Capital by Avoiding Angel Round ConflictWritten by Mike Sage
A venture capitalist reveals what you need to know By Mike Sage Founder of Capital Now and author of Capital Now Complete Free Trial copy available at http://www.venturecapitalguru.comThe use of friends, business associates and Angels as sources of financing often appears attractive as a relatively uncomplicated, readily available capital source. For startups, they are often only form of capital available. Yet, care must be taken to ensure that this early round of capital does not interfere with long-term financing. Angel financing is typically a one-time source, in which investors have unrealistic return expectations. Typically, these sources are not professional investors with diversified and balanced portfolios. They can hardly be blamed for nervousness over inevitable ups and downs of your company's development cycle; however, as friends or previously successful entrepreneurs themselves, you can be sure that they will make their advice and concerns well known to company. Part of problem some of you encounter is that you tend to over-value company for Angel round. Then you are placed in uncomfortable position of explaining to people who often do not understand venture capital that they have to take what they would consider to be a valuation "haircut." We've encountered entrepreneurs that say, "We've just raised a $10 million pre-money valuation, and now we're going to go out and get a $15 million valuation." Then we learn they only raised $500,000 at $10 million pre-money valuation. That's not a solid basis for a $10 million pre-money valuation. Yet there are some of you who mistakenly believe it is a solid valuation and potentially put company in jeopardy to fail in next financial round. Angel Round Strategy Here's one option to consider when trying to value your company for a seed-round investment. Avoid it altogether; after all, it doesn't make sense and can only present a potential liability down road. Instead of offering equity, offer debt that can be converted into equity at some point in future. This is a much more secure financial instrument, which will provide a lien on assets to Angels if business does not progress. The lien would be released upon a debt-to-equity conversion that could take place at first round of a venture capital investment. The conversion price can based on pre-money value paid by a VC, adjusted with a discount based on how much time passes until conversion.
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