Archives / January, 2013

Reid Hoffman – New VC Blogger (Essayist)

Reid Hoffman, founder / executive chairman of LinkedIn and partner at Greylock has started blogging. Well – he’s started writing long form essays on a blog that my understanding is will come out about once a month. The first post is If, Why, and How Founders Should Hire a “Professional” CEO. It is outstanding and I expect…

What Is The Appropriate Time Horizon Of A Financial Model for VC’s?

Q: When building a financial projection model for a pitch to VC’s, should you include future rounds of funding in the model or simply show what measurable goal you are trying to achieve with the current round you are seeking? A (Brad): It depends on the stage of the company. But first, it’s important to understand…

What Are Qualified Conditions Of Debt Conversion?

Q: On page 105 of the second edition of Venture Deals under Debt Conversion Mechanics, you state: “Therefore, having outstanding debt (that doesn’t convert) can be a bad thing if an entrepreneur ever gets sideways with one of the debt holders”. I infer this to mean that convertible debt cannot bring about the same bad results….

One Of Our Investors Just Closed Shop. What Should We Do?

Q: What is the best path to take if a VC which has invested in my company closes down, but we have not exited and are still operating profitably ? What happens to the LLC entity that was formed at the time of investment?  Do we ask the VC for our shares back or buy…

Where Can I Find Information on Starting Salaries for a SaaS Startup?

Q: Where can I get some good starting salary information for a SaaS startup?  I need the information for CEO, CFO, CIO, CINO, Director of Sales. How much should the starting salaries vary for a startup with $5 million vs $10 million gross revenue? A (Brad):  First of all, you can find a great deal of…

Issues with Equity Misalignment

Q: In our startup we have 4 founders, two of whom are not full time.  We’ve all put in a good sum of cash thus far.  The two founders with the least equity happen to be the two tech founders.  Some of us feel that we made a mistake when allocating shares in the beginning…