December 18, 2013 - On the short list of items one must put together when pitching a startup is the financial model - the Excel workbook which contains formulas and variables predicting revenues and expenses and, ostensibly, a business model that could produce a big exit for the founders/shareholders.
November 14, 2013 - In my day-to-day role helping to run the Square Roots program for Square 1 Bank, one of my most important responsibilities is to be a connector. Often, this manifests itself in introductions between a company and a potential investor or service providers. From time-to-time, I’ll meet a job seeker who wants to break into the startup world. I usually ask a series of questions to understand exactly what the person wants to do, and then attempt some mental matching with companies that may be a fit for their profile and talents.
October 29, 2013 - It's no secret that building a company is hard work. While entrepreneurial ventures can be full of excitement and energizing in many respects, they are still work and run the risk that the strain could burn out employees. Well known (and well funded!) startups will experiment with various perks like ping pong tables, catered lunches and flexible work hours in an attempt to keep employees happy while providing attachments above and beyond a paycheck. Happy teams lead to happy customers!
October 16, 2013 - In my prior post, I gave an overview of the theory behind financial covenants in venture debt deals and some basic examples of the types of covenants used by lenders. With this post, we will take a deeper look at what happens when a covenant is violated, and the pros and cons of venture debt deals with covenants.
October 1, 2013 - There is no way to talk about venture debt without bringing up the notion of financial covenants. The simple mention of the word “covenant” evokes a connotation of doom and fear in the hearts of many entrepreneurs and equity investors alike. This dread is perhaps caused in part by horror stories of overzealous lenders using a covenant trip to invoke remedies (read: sweep cash or foreclose on assets), which led to the demise of a company.
September 18, 2013 - In my first two posts on Understanding Venture Debt, I provided a general overview of different types of venture debt facilities and a brief look at the banks and funds that are actively involved in the space. With this post I hope to shed some light on one of the less-obvious, but highly important, aspects of the venture debt landscape: the “implicit contract” between venture capitalists and venture lenders.