This year's TechPoint Summit was filled with inspiring stories, new
ways to innovate and many developers reaching out with their
product and to others products as well. One positive side that
has arisen in response to the down turn of our economy is
the strong urge for new development and innovation within
the world of Technology. The drive and excitement needed
to fuel this was filling the air
during The TechPoint Summit and events leading up
to it! When
speaking to innovators, developers and...Read More »
When considering entering into a partnership or making a private
investment in an early stage company, beware of the “idea
guy”. This is a title sometimes used by entrepreneurial
minded individuals who don’t contribute to the growth of the
company through development, sales or management but develop
concepts (ideas) for products or services for some market
opportunity.
From my experience, idea guys often have little ability to manage cash flow or people. Without the proper partners in...Read More »
From my experience, idea guys often have little ability to manage cash flow or people. Without the proper partners in...Read More »
As stated in Part 2 of
this series, a business’ capital strategy is both
directed by the market strategy and leadership
team required to carry out the strategy as well as
directing to the market strategy and team. A
solid capital strategy is based on understanding where you are and
where you need to go.
The first step in developing a capital strategy is to know your revenue projections. If you had the money and team you need, what can you sell and when? In developing a market strategy the...Read More »
The first step in developing a capital strategy is to know your revenue projections. If you had the money and team you need, what can you sell and when? In developing a market strategy the...Read More »
In the matrix of developing a good business model a business will
have:
Most entrepreneurs are good at spotting a market opportunity but are weak in developing the opportunity into a market strategy, leadership (developing the correct team) and capital strategy, yet each is pivotal in business...Read More »
- A well developed market strategy;
- The correct leadership team to carry out the market strategy; and
- A capital strategy capable of funding the market strategy and team through growth.
Most entrepreneurs are good at spotting a market opportunity but are weak in developing the opportunity into a market strategy, leadership (developing the correct team) and capital strategy, yet each is pivotal in business...Read More »
Over the last three weeks I have visited the west coast twice and
Toronto once to help clients work through funding rounds and
strategic acquisitions. I also visited with two angel
investment groups which I work with. The primary purpose of
each trip was to help clients develop and realize their capital
strategy for growth. While most of these entrepreneur clients
are in technology fields, others include a tax planning firm and a
Bollywood project out of Toronto.
It does not matter what world...Read More »
It does not matter what world...Read More »
The following is a guest post by a fellow Gravity Ventures member and
friend, Dr. Tony Ratliff:
Learning to Pitch Before You Start Raising Capital
By Dr. Tony Ratliff
It only took about six months of deal flow and a handful of “pitches” before I realized that most entrepreneurs are really, really bad at “selling themselves” and “pitching” their ideas and companies to investors.
I cringe every time I listen to a great start-up idea or read a well-written business plan, and then watch in horror as...Read More »
Learning to Pitch Before You Start Raising Capital
By Dr. Tony Ratliff
It only took about six months of deal flow and a handful of “pitches” before I realized that most entrepreneurs are really, really bad at “selling themselves” and “pitching” their ideas and companies to investors.
I cringe every time I listen to a great start-up idea or read a well-written business plan, and then watch in horror as...Read More »
I don't often re-post articles in full glory, but I couldn't resist
with this one. This is a great article from the OMMA (a
magazine of online media, marketing & advertising).
There are some great quotes from quite a few movers and
shakers in the Indiana technology area. As a technology legal
counsel located in Indianapolis, it warms my heart to see this kind
of great press for the area. Personally, I think all
technology firms should move or open offices here.
Big hat-tip to Jay Baer for...Read More »
Big hat-tip to Jay Baer for...Read More »
Determining a valuation for a pre-revenue company is a difficult
process. A Harvard VC formula does not make sense at this
stage as available P/E ratios essentially compare apples to
oranges, cash flow projections are too untrustworthy to use a DCF
method, and there is no such thing as a true market comp.
Investors must rely on qualitative factors in connection to
valuation formulas to determine how much they think the thing is
worth. Some qualitative factors include:
• Is the...
Read More »There is a new Seventh Circuit Court of Appeals opinion that is likely to have a significant impact on SaaS providers. In Digitech Computers, Inc. v. Trans-Care, Inc. (link here), the 7th Circuit focuses on a SaaS agreement for Digitech to provide certain management software licensing components for Trans-Care (an ambulance and medical transportation service). The Court ultimately upheld a breach of contract claim in favor of Digitech, significantly reduced Digitech’s damages award, and...
Read More »Angel investment groups tend to quickly dismiss investor
presentations that cover complicated products and markets.
They tend to lean towards investment opportunities which they
easily understand the market – often even if it as a worse
valuation or lower expected return than other more complex products
or markets.
This is a problem for those more complex technology companies. If this is your company, don’t fret. They key of any angel investor group presentation is NOT to get them to commit...Read More »
This is a problem for those more complex technology companies. If this is your company, don’t fret. They key of any angel investor group presentation is NOT to get them to commit...Read More »
A tech entrepreneur friend recently told me that the concept of an
“evangelist” in tech companies is all but dead. Honestly I
don’t know if it was ever as alive as people thought, but I liked
where he was going with this. I’ve talked to a number of
aspiring entrepreneurs who view their role in their development
stage company as that of an evangelist. Practically what this
often means is that the person has a entrepreneurial idea but no
ability to either develop it, sell it or run the...Read More »
The Alerding Castor Hewitt faithful braved the chill and the rain
of Saturday, April 16th to participate in the 2011 Susan G. Komen
Race for the Cure. We're proud to announce that the team
surpassed its goal of raising $1000 to assist the Komen
Foundation's mission to end breast cancer forever and had a
fantastic time walking in downtown Indianapolis.
We'd like to send a big 'Thanks!' to those who donated to the team's efforts and share a special 'Way to go!' with the team members, along with...Read More »
We'd like to send a big 'Thanks!' to those who donated to the team's efforts and share a special 'Way to go!' with the team members, along with...Read More »
All securities offerings fall into one of three classes:
1. Registered,
2. Exempt, or
3. Illegal.
Private offerings of securities are just that – “private”. The key for any private offering is that the offerer may only solicit investors through private methods. There are all sorts of rules around what constitutes private solicitations and to whom the solicitations can be made, but in general "private" means that which is not public. If a business attempting a private offering makes a...Read More »
1. Registered,
2. Exempt, or
3. Illegal.
Private offerings of securities are just that – “private”. The key for any private offering is that the offerer may only solicit investors through private methods. There are all sorts of rules around what constitutes private solicitations and to whom the solicitations can be made, but in general "private" means that which is not public. If a business attempting a private offering makes a...Read More »
Very
interesting article from CNet regarding the proposal to be made by
Senator Dick Durbin (D-Ill). The article can be found
here. Basic point of the article is
that Senator Durbin wants to add sales taxes to on-line sellers
like Amazon and iTunes (although I would note that I think
iTunes already has a tax component) for all purchases. The
idea being that brick and mortar stores in a given state shouldn't
have to foot the bill for these new-fangled on-line
superstores. They should have to...Read More »Last night I lectured on this topic to my entrepreneurial capstone
class at Purdue. It is possibly the most basic question for
any startup looking to raise capital, but it is often not
approached correctly. In my experience most entrepreneurs
take a wild guess at their number.
The correct approach is to look at your cash flow projections and determine it from there. For a new startup the goal is to get to breakeven and beyond. For later stage companies the projections may address strategic...Read More »
The correct approach is to look at your cash flow projections and determine it from there. For a new startup the goal is to get to breakeven and beyond. For later stage companies the projections may address strategic...Read More »
Agreement titles are funny things. In their best use they
quickly describe the general subject matter of the contract.
For most situations a simple title is helpful. E.g.,
"Services Agreement" helps differentiate between a contract for
services and one for goods. That is helpful. Many
contract titles are more descriptive (e.g., "License Agreement",
"SaaS Agreement" or "Software Service Level Agreement" to describe
the technology nature of the agreement).
Where a client is using form...Read More »
Where a client is using form...Read More »
I've had several conversations with concerned
entrepreneurs over the last year about changes in the accredited
investor standards under the Dodd-Frank Act. In January the SEC
proposed amendments based on Dodd-Frank to the accredited
investor standard which subtracts the net equity value of an
investor’s primary residence from that investor’s net worth
determination.
Example: Currently if an investor has $800k net equity before
equity in primary residence and $300k in net equity in the...
In the words of Schoolhouse Rock, “three” is the magic
number. That is not what I am talking about. Every
business model has some number milestone that must be met to ensure
a basic level of success for the business. This can be number
of customers, revenue, user seats, market share, marketers’
requirements, sales reps, break even...
Good market research can predict this number. Unfortunately, most business plans either ignore the number or use wild a** guesses (WAGs) to predict the number....Read More »
Good market research can predict this number. Unfortunately, most business plans either ignore the number or use wild a** guesses (WAGs) to predict the number....Read More »
I have said it a million times since learning the lesson myself in
a failed entrepreneurial effort a couple of years ago, the CEO of
any entrepreneurial venture must understand the importance of
managing cash flows and how to use cash flow analysis for the
strategic growth of the company.
Trust me, I am all into the Six Sigma approach of throwing a couple of innovators together, rolling out a v1 product as quickly as possible, and slowly scaling the company from hobby phase to a successful...Read More »
Trust me, I am all into the Six Sigma approach of throwing a couple of innovators together, rolling out a v1 product as quickly as possible, and slowly scaling the company from hobby phase to a successful...Read More »
The first caveat is that I'm sorry I haven't posted anything
recently. Work here at Alerding Castor Hewitt has been going
like gangbusters and yours truly has been up to his distinguished
eyeballs in work. Trust me, however, I'm now dutifully
committing myself to continue providing insight and humor as your
Indiana Internet Litigation guru.
Second caveat is that this post actually has nothing to do with privacy litigation, software litigation or really any other technology law issues. ...Read More »
Second caveat is that this post actually has nothing to do with privacy litigation, software litigation or really any other technology law issues. ...Read More »
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