Emerging Enterprise Center Blog - Commentary and Analysis For Entrepreneurs and Startups

I recently met with a potential new client. The two entrepreneurs have a great business concept, and some real “traction” (a word upon which I have commented before) in the form of actual repeatable sales. This is one of those good ideas that, once described, seems so simple and obvious that it makes you wonder why you didn’t think of it. The margins aren’t software margins, but they are close, and the addressable market is deep into the hundreds of millions.  Like everyone else, they need money to support execution on the plan. They don’t need much: $1 million initially and perhaps another $3... More

Antidilution has been the topic of a prior post and is kind of a tough topic.  I find I have to go over the concepts carefully with entrepreneurs. Some entrepreneurs tend to think of dilution as purely a matter of percentage ownership. Although ownership dilution is important particularly as it relates to voting control, investors are typically more concerned with financial dilution. Financial and ownership dilution are related but different concepts. Ownership dilution is easy to explain, if Easy Company has 1,000,000 shares issued and outstanding in the hands of stockholders, and you own 500,000 of these, you own 50% of Easy Company. If Easy Company... More