Background In situations where companies are considering an investment form an institutional investor, the concept of liquidation preference will be certain to come up. The investor will want certain privileges and protections in exchange for making an investment in a start-up or early stage company. These privileges and protections can take many forms but the…

In a recent report, the Kauffman Foundation noted that bank debt was the main source of outside capital for start-ups. More specifically, small banks appeared to be best at servicing this market need. personal savings was the number one source of capital for entrepreneurs. In descending order, capital came from the following top 5 sources:…

The Federal Trade Commission recently announced a settlement of charges against a man running a crowdfunding campaign on Kickstarter. The FTC, in its first case involving crowdfunding, alleged that Mr. Chevalier used deceptive practices in offering investment in a game called the Doom That Came to Atlantic City. Apparently he raised the approximately $122,000 via…

Fads come and go and some need to go. Convertible notes are one such fad. The idea sounds great to a startup. All you have to is issue debt to investors and if you cannot pay it back at maturity your debt converts into equity. You do not have to make any payments until maturity….

The Los Angeles Business Journal Reports that UCLA Anderson Forecast shows that the tech sector is hot in several parts of Los Angeles County. The author highlights some of the challenges to more rapid growth: 1. Business friendliness 2. High cost of living 3. Inadequate human capital http://labusinessjournal.com/news/2015/jun/03/anderson-tech-sector-hot-could-be-hotter/?page=1&

Courtesy of Seedkicks, this post on the Founder Institute site goes into the 3 ways to acquire backers before you launch your crowdfunding campaign: 1. Identify influencers 2. Design your landing page to collect emails 3. Create a teaser video https://www.fi.co/posts/16051

Lisa Suennen published a great post about due diligence from her own perspective that of a healthcare VC. The post pulls back the curtain on what VCs look at when contemplating an investment in your company. The post also includes a link to her presentation on the topic. Great allusion to the 12 steps being…

Tech.co reports on a Stanford study that suggests that allowing team members to work from home can boost productivity. In addition, the at home cohort was happier and had half the quit rate of the office cohort. Sorry Marissa Mayer. What do you think? http://tech.co/stanford-study-letting-employees-work-from-home-raises-productivity-2015-04

Colorado’s governor signed an equity crowdfunding bill into law Monday. The bill allows intrastate equity crowdfunding of up to $5,000 for non-accredited investors. Under the new law companies have to disclose their business concept and risk factors to investors, and commit to spending 80 percent of crowdfunding money inside Colorado. More and more states are…

Recent articles and news coverage have demonstrated that there is a lot of confusion about what crowdfunding is and is not. To shed some light on this topic let’s look at the history of crowdfunding. History Crowdfunding as a concept and practice has been around since the late 19th century. Some might argue that it…

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