Jordan Benjamin ??的动态

I heard from a former employee of a VC backed company that was acquired, and they didn't get anything for the equity they owned. It's something I hear quite a bit: "I had equity, the company had an exit, but I didn't get anything, how is that possible?" First, early stage equity is a lottery ticket. It's nice to have a ticket, zero should be the expected outcome, but every once in a while you might get some $$ back. Here's how your equity could go to zero when there's an exit (oversimplified): -- Founders raise VC money, and when they raise VC money they negotiate terms -- One key term is called a liquidation preference -- This means that the return they get gets paid back before other shareholders, in particular before common shareholders (which is you). -- It can come in the form of a 1x, 2x, or whatever is negotiated (1x is common but in riskier deals the VCs want higher than 1). -- If the VC negotiates a 2x preference on their $20M investment, this means they are guaranteed to get $40M back before those behind them in line get anything. -- So say a company raises $20M, has a $40M exit with 2x liquidation preference (on the entire $20M) for the investors - those investors are going to essentially get everything! -- If it sells for $45M, the remaining $5M (over $40M) is split among the common shareholders -- Even founders, if they are only holding common shares, could be left without anything! * to whom this concerns - You really don't stand a chance

I heard from a former employee of a VC backed company that was acquired, and they didn't get anything for the equity they owned. It's something I hear quite a bit: "I had equity, the company had an exit, but I didn't get anything, how is that possible?" First, early stage equity is a lottery ticket. It's nice to have a ticket, zero should be the expected outcome, but every once in a while you might get some $$ back. Here's how your equity could go to zero when there's an exit (oversimplified): -- Founders raise VC money, and when they raise VC money they negotiate terms -- One key term is called a liquidation preference -- This means that the return they get gets paid back before other shareholders, in particular before common shareholders (which is you). -- It can come in the form of a 1x, 2x, or whatever is negotiated (1x is common but in riskier deals the VCs want higher than 1). -- If the VC negotiates a 2x preference on their $20M investment, this means they are guaranteed to get $40M back before those behind them in line get anything. -- So say a company raises $20M, has a $40M exit with 2x liquidation preference (on the entire $20M) for the investors - those investors are going to essentially get everything! -- If it sells for $45M, the remaining $5M (over $40M) is split among the common shareholders -- Even founders, if they are only holding common shares, could be left without anything! -- You really don't stand a chance in that case. There are a TON of resources and blog posts about this from people that know more than I do, and it's important to educate yourself. Feel free to post any questions in the comments and I'll do my best to answer. Oh, and by the way, make it a point in the next week or two to ask this question of your current organization. Detailed comp / salary information for 1000s of companies (free resource): https://bit.ly/43YydWb ??

The number one reason to reconsider raising VC early is not dilution. In fact, dilution is number 5 on my list. Here are the four that come before it. 1. Making promises to external stakeholders slows pivoting. It's not that VCs discourage pivoting. It's that when you've raised on a plan, it will mess with your head to tell your VCs that the plan was all wrong. 2. Opportunity cost of time spent raising. For most CEOs, raising is a 20 hr/week job, minimum. Is there more leverage in some other use of that time? 3. Small exits are off the table. Small tuck-in acquisitions, which can be very lucrative for founders if they're just getting started, are off the table once you raise. 4. Liquidation preference. Investors eat first. The bar gets much higher for you, the founder, to make money on an exit. 5. Dilution

Preparing a VC-Backed Company for an Exit Event Excited to share insights on navigating exits for private companies! ?? Achieving liquidity through M&A exits requires preparation and strategic oversight. Founders and managers must ensure internal alignment among stakeholders before embarking on the sale process. Timing is key—keeping a close eye on market conditions and managing burn rates can maximize value. Starting early with the proper mix of financial and legal advisers, being on top of legal housekeeping, and diligently negotiating the term sheet can simplify the process and lead to a very rewarding outcome for all parties involved. Read More Here: https://bit.ly/4dcbZnT #MandA #StartupSuccess #BusinessStrategy Branded Hospitality Ventures

???IPO Market Still in a Holding Pattern – What Founders Need to Know??? A few high-profile IPOs in 2023 sparked optimism, but as?PitchBook?highlights, the real challenge remains?valuation expectations. Many companies that would have gone public pre-2022 are still on the sidelines, unwilling to accept the lower valuations that today’s market demands. For early-stage founders, this delay has ripple effects: ??Extended timelines for liquidity?– Investors may push for secondary sales or recapitalizations. ??Pressure on late-stage fundraising?– Down rounds are becoming more common, and structured financings are on the rise. ??Changing acquisition dynamics?– With fewer IPO exits, M&A can become a more attractive (or necessary) path. If you’re navigating these shifting waters—whether preparing for a long IPO runway or considering strategic alternatives—having a legal partner who understands?fundraising, cap table strategy, and exit planning?is more critical than ever. Feel free to reach out and chat to learn more! #startups #IPO #fundraising #M&A

Day:14 The Business Fundraising Cycle ?? The journey of raising capital for a business is an exciting and evolving process. Here’s an overview of the fundraising stages: 1. Idea/Concept Stage: Personal savings or funds from family and friends. 2. Seed Stage: Initial capital raised from angel investors, crowdfunding, or early VC firms. 3. Early-Stage (Series A, B, C): Funds raised for growth, marketing, and scaling, primarily from venture capital. 4. Expansion Stage: Capital raised for rapid scaling, often from private equity or institutional investors. 5. Pre-IPO Stage: Preparing for an Initial Public Offering (IPO), including private placements or secondary offerings. 6. IPO: The company offers shares to the public for the first time, raising significant capital. 7. Post-IPO & M&A: Follow-up capital raising through offerings or mergers and acquisitions for continued growth. The fundraising journey involves different investor types at each stage, with the ultimate goal of growth, expansion, and going public. #Finance #BusinessFundraising #VentureCapital #PrivateEquity #IPO #StartupGrowth #CapitalRaising #BusinessStrategy #Entrepreneurship #Investment #Day14 - Manish Kumavat

The Startup Journey: From Idea to IPO Every great company starts with a idea, but what happens next? The journey through VC funding has stages of growth, risk, and opportunity. Whether you are at the Pre-Seed looking for validation or getting ready for your IPO, understanding where you stand and what investors expect is key. Pre-Seed/Seed (Very High Risk): It’s all about proving your business thesis and market fit. Family member, Friedns, AngelInvestors, and early VC invest in you and your vision for corporation. Its All about credibility! Early Stage (High Risk): Growth, growth & growth, venture capitalists want to see how your company can stand out from competitors and maintain a lasting advantage. Growth strategies and profitability need to be within reach.It’s make or break time! Late Stage (Moderate Risk): Now Focus shifts to efficiency and profitability. With hedge funds and private equity firms stepping in, it’s about maximizing growth and impact.You’re nearly there! IPO/Exit (Moderate Risk): Time for the grand finale. Whether it’s an IPO, acquisition, or merger, you’re delivering shareholder value and getting ready for the big leagues. Investors are looking for strong returns and smooth exits. Keep your investors engaged and aligned with your vision at every stage. Communication is KEY to getting the right kind of funding and scaling successfully! ?? Pawel Maj #privateequity #venturecapital #cfa #ca #caaspirants #cfalevel1 #investment #connections #business #finance #investmentbanking

A capitalization table (cap table) is a document or spreadsheet that outlines the ownership structure of a company, including equity ownership, valuation, and dilution. We see ‘broken’ cap tables all the time and, more often than not, companies make mistakes in their shareholder registers or employee share plans because of that. These mistakes can sometimes cost businesses millions of pounds. And, for the record, if you’re curious about what kinds of cap table management errors we see in the hundreds of companies we help, you can read all about it?here. #founders #equity #debt #fundraising #Capital #investment #Invetors #startups #earlystage #laterstage #IPO #PreIPO #M&A

Interested in getting in early on the next big thing? Pre-IPO investing offers the potential for high returns, but also comes with risks. So is it worth it for the average investor? Here we break it down. https://hubs.la/Q02zZ70P0 #privatemarket #privatestock #preIPO #investing

I am excited to announce the release of part one of my PE series for?MarketScouts?on Substack! What you'll learn: 1. The role of private equity in shaping IPO strategies 2. Advantages and potential pitfalls for investors 3. Case studies of PE-backed IPOs and their performance If you're interested in the intersections of private equity and public markets, don't miss out on this insightful read. Check it out now, and let me know your thoughts! Thank you, Vas Musca, for your guidance.