Business 101 for startups by Fred Wilson
Cap Tables (short for capitalization tables) are spreadsheets that show how much everyone owns of the company. You can get a stockholder ledger from your lawyer that will list all the stockholders and show how many shares or options they have, but I don’t consider that a cap table.
For the past 25 years, I’ve used a simple form, mostly…
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Last week’s post on valuation brought a couple questions about EBITDA. The first of which is how do you pronounce that acronym? The answer to that question is e-bit-dah. The second of which is what does it mean? The answer to that is Earnings Before Interest Taxes Depreciation and Amortization.
The way I like to think about EBITDA…
Last week on MBA Mondays, I talked about valuing an internet marketplace business. In that post, I talked about using 1x gross marketplace transactions and 20x EBITDA as multiples to determine value. In the comments, I was asked about multiples for other sectors. That’s a good question so I figured I’d show how to calculate…
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Today on MBA Mondays, I am going to walk you through some math that our team does when looking at a venture investment in a company that is starting to scale its business.
Let’s assume we have a portfolio company. I will call it fit.sy. It is a marketplace for fitness experiences. We invested in it last…
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We are coming to the end of the Financing Options series. This is the final post in the series. Today we are going to talk about working capital financing.
For those of you not steeped in finance and accounting matters, I suggest you go back and read the Balance Sheet post before reading on. Working…
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Today’s post in the financing options series on MBA Mondays is about Bridge Loans. Bridge loans are so called because they are a “bridge” to something else. They are short term loans intended to fund a company to an anticipated event in the future.
Bridge loans exist in many sectors outside of the startup world.…
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Today on MBA Mondays we are going to cover yet another topic in the Financing Options series, financing capital equipment like servers, routers, switches, computers, etc.
Equity capital is expensive. Every time you do a raise, you dilute. It makes sense to look for places where you can use other less expensive forms of capital…
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It’s Monday, time for MBA Mondays and the next post in the Startup Financing Options series. Today we will talk about Venture Debt.
If there were two words less likely to be found together, it would be venture and debt. Startups are not credit worthy enterprises. They have little to no assets and no cash…
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Today on MBA Mondays Startup Financing Options series, we are going to talk about the financing option that I specialize in โ preferred stock.
Almost all venture capital firms and many angel and seed investors will require the company they are investing in to issue them preferred stock. The vast majority of equity dollars…
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MBA Mondays are back after a one week hiatus. Today we are going to talk about convertible debt. Convertible debt can also be called convertible loans or convertible notes. For the purposes of this post, these three terms will be interchangeable.
Convertible debt is when a company borrows money from an investor or a group of investors and…
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