Hot answers tagged capital
5
Ruby,
For some background, have a read of
Josephs recent answer on the myths of startups, specifically his point on ownership.
my blog post on sharesplit guidelines
there is an ownership calculator written by @AlainRaynaud which might help you play through senarios
There was a great post on the dilution effects on founders but after a few google ...
2
Definitely put all agreements with anyone in writing and have these reviewed by your attorney and strongly recommend that any and all of your investors engage their own counsel to review the agreements.
These agreements need to cover a broad range of circumstances and topics - corporate governance, what happens if someone offers to buy some of your stock, ...
1
Ok, here is my take and there might be others. At the start it's a little fuzzy still but later rounds get more solid. There are also differences on which coast your on within the US.
Angel / Friends & Family - These are people that are well off in the Angel world. They're independently wealthy and can invest in a startup. Most of the time these are ...
1
You're on the hook, tax-wise, for this money. You may be able to offset it with deductible expenses, but if you don't have enough of those before the year end - you'll have to pay taxes (possibly also SE taxes) on the difference. You have to remember that not every business expense is deductible, some aren't, some have to be capitalized or amortized.
LLC is ...
1
Assuming that you never put anything new into the business, then any profit you made in the current tax year is taxed as income, and the rest is all long-term capital gains. (But, see caveat below).
The easy part is that going from a disregarded entity to a partnership doesn't change the amount of tax you pay -- you had some basis in what you contributed, ...
1
When you are raising money through a private placement memorandum you need to qualify the investor. This qualification process should be documented in a "Investor Questionnaire". Completion of the Investor Questionnaire comes prior to presenting the PPM. The investor questionnaire includes documentation of their qualification as an accredited investor.
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1
Why do you think you need to "free up equity?" This idea is, well, non-standard. If new money needs to go into the s-corp, new shares are issued. Everyone is appropriately diluted by the new issuance. Unless you have a situation where the company can't issue new shares because of overly strict protective provisions or can't amend the articles because the ...
1
You're bound to feel at a disadvantage, because this is clearly the first time you've gone through the process, and you have no idea whether you're being given good, impartial advice, or whether the firm you have hired to produce the IM are giving themselves an easy life at your expense - plus a big side-order of upside at no risk.
So in the first instance, ...
1
Unfortunately VC investment follows fads. Your kind of company was hot 5 or 6 years ago. Right now, VCs are licking their wounds from other companies that needed to raise $100M in future rounds that never materialized. I don't think they're in the market any more for that kind of company.
If you can build a business plan that doesn't require the $100M ...
1
"The project team is made up of very qualified process engineers, managing directors, mergers & acquisitions specialists etc who together have completed a significant level of baseline assessments."
If this is all true, you should easily be able to raise the $500k. If you mean MDs and M&A execs, from IBs, they'll all be paid millions of dollars, so ...
1
It is clearly best for the entrepreneur to get as much money in the door as possible, to maximize runway. But if you're having trouble closing the amount of money you want, there's no harm in setting up a trenched deal (i.e. triggers).
The advantage for the investor is that they are putting money in at series A prices, but a portion of it is at a lower ...
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