Get Started for FREE
Sign up with Facebook Sign up with X
I don't have a Facebook or a X account
 Your new post is loading...
Your new post is loading...
Scoop.it!
A major chunk of investments in startups is done either by Venture capitalist firms or by Angel investors. Therefore, it becomes essential for entrepreneurs to understand the difference between them. To read more click on image or title. $ Via Marc Kneepkens 
No comment yet.
Sign up to comment
Scoop.it!
By Farhad Manjoo. Fledgling companies are increasingly delaying initial public offerings of stock, which can keep the risks — and rewards — limited to venture capitalists and hedge funds. Not long ago, if you were a young, brash technologist with a world-conquering start-up idea, there was a good chance you spent much of your waking life working toward a single business milestone: taking your company public.Though luminaries of the tech industry have always expressed skepticism and even hostility toward the finance industry, tech’s dirty secret was that it looked to Wall Street and the ritual of a public offering for affirmation — not to mention wealth.But something strange has happened in the last couple of years: The initial public offering of stock has become déclassé. For start-up entrepreneurs and their employees across Silicon Valley, an initial public offering is no longer a main goal. Instead, many founders talk about going public as a necessary evil to be postponed as long as possible because it comes with more problems than benefits. Read more, click image or title. Via Marc Kneepkens
Richard Platt's insight:
Silicon Valley’s sudden distaste for the I.P.O. — rooted in part in Wall Street’s skepticism of new tech stocks — may be the single most important psychological shift underlying the current tech boom. Staying private affords start-up executives the luxury of not worrying what outsiders think and helps them avoid the quarterly earnings treadmill. - It also means Wall Street is doing what it failed to do in the last tech boom: using traditional metrics like growth and profitability to price companies. Investors have been tough on Twitter, for example, because its user growth has slowed. They have been tough on Box, the cloud-storage company that went public last year, because it remains unprofitable. And the e-commerce company Zulily, which went public last year, was likewise punished when it cut its guidance for future sales. Scott Kupor, the managing partner at the venture capital firm Andreessen Horowitz, and his colleagues said in a recent report that despite all the attention start-ups have received in recent years, tech stocks are not seeing unusually high valuations. In fact, their share of the overall market has remained stable for 14 years, and far off the peak of the late 1990s. - That unwillingness to cut much slack to young tech companies limits risk for regular investors. If the bubble pops, the unwashed masses, if that’s what we are, aren’t as likely to get washed out.
Scoop.it!
In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists. It's easy to dislike angel and venture capitalist investors. For entrepreneurs looking to raise capital for their start-up businesses, these early-stage investors can be awfully hard to find, and when you do find them, it's even tougher to get investment dollars out of them. To read the full article, click on the title. Via Marc Kneepkens
Richard Platt's insight:
In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists
|
Scoop.it!
Cybersecurity companies have had an easy time raising money in Silicon Valley over the last few years. But investors are starting to ask about profit and sustainability. SAN FRANCISCO — A funny thing happened to Orion Hindawi while he was raising $120 million for his cybersecurity start-up last month: Investors asked him about profits. A year ago, Mr. Hindawi raised $90 million, followed by an additional $52 million this year from the Silicon Valley venture firm Andreessen Horowitz. Investors were willing to place a $900 million valuation on his company, called Tanium, without so much as a glance at revenue or profit margin. This time, not so. As he made the rounds with investors like Institutional Venture Partners and T. Rowe Price, Mr. Hindawi said, he was asked to show sales and profit margins. “A lot of the funders we spoke with are starting to get really scared,” he said. “This time the questions were, ‘Is this a sustainable business? Do you guys actually make money?’ ” Via Marc Kneepkens
Richard Platt's insight:
Cybersecurity companies have had an easy time raising money in Silicon Valley over the last few years. But investors are starting to ask about profit and sustainability. A funny thing happened to Orion Hindawi while he was raising $120 million for his cybersecurity start-up last month: Investors asked him about profits. A year ago, Mr. Hindawi raised $90 million, followed by an additional $52 million this year from the Silicon Valley venture firm Andreessen Horowitz. Investors were willing to place a $900 million valuation on his company, called Tanium, without so much as a glance at revenue or profit margin. This time, not so. As he made the rounds with investors like Institutional Venture Partners and T. Rowe Price, Mr. Hindawi said, he was asked to show sales and profit margins. “A lot of the funders we spoke with are starting to get really scared,” he said. “This time the questions were, ‘Is this a sustainable business? Do you guys actually make money?’ ”
Scoop.it!
Were you one of the first to identify Uber as a game changer? What about being one of the first to use Amazon or Google in the early days? If you had.. Were you one of the first to identify Uber as a game changer? What about being one of the first to use Amazon or Google in the early days? If you had invested in Uber (now valued at $40B) in 2011, you would currently be sitting on a 600x return. Unfortunately, unless you were already very wealthy, securities laws would have prevented you from being able to invest in the these companies. Early adopters have historically been prevented from crossing the threshold from customer to investor. However, a fundamental shift in the relationship between consumers and companies has been set in motion by new SEC regulations set to go into effect on June 19th. Most early adopters interested in supporting private companies have been limited to rewards-based crowdfunding. This type of crowdfunding has proven to be a poor substitute for true early stage investing. Rewards-based crowdfunding websites such as Kickstarter allow individuals to pre-order products or donate towards something that they want to exist in the world. These “backers” do not get shares or equity in the company. Although these backers take on significant risk, they do not get any significant upside. The story of Oculus VR is apt. Nearly two years after its celebrated rewards-based crowdfunding raise, Oculus was acquired by Facebook for $2B. Oculus’ early Kickstarter backers felt angered and betrayed. Though they had a sense of ownership in the company, they reaped no benefits from the transaction. Meanwhile, the institutional and accredited investors who invested in Oculus after the Kickstarter campaign (and in large part because of the Kickstarter campaign) made a large amount of money in a short period of time. $300 in equity in Oculus at the time of the Kickstarter campaign would have been worth approximately $45,000, a 145x return. Successful technology startups owe it to their early adopters to let them participate in the company’s financial success. These are the people who realized the company’s potential before the public and provided the momentum to turn that potential into a reality. Read more: click on image or title. Via Marc Kneepkens
Richard Platt's insight:
Here are some of the key takeaways:
|
Read and Heed