Figuring Out The Term Sheet Terminology
An entrepreneur looking for funding from investors has to understand a whole new terminlogy related to the investment terms. We thought it would be useful to give you basics of the most important ones, along with examples or further real-life implications. By the way, it is not uncommon that the other side (for example less experienced Angel Investors) are also not familiar with these terms, so this list can be useful for both sides of the table.
Have any words or phrases to suggest? Let us know in the comments!
Accredited Investor (US+UK): A high-worth individual allowed by their government to make risky investments in private equity.
Angel: A high-worth individual who invests in startups. Generally speaking, Angels are less afraid to take greater risk, and usually invest with their own money.
Common Stock: The unit of ownership of the company typically owned by the founders. Common Stock is also the lowest level of financing. If the company goes into bankruptcy, money is only repaid back to common stockholders once the liquidation money is first paid to debt and preferred stockholders.
Convertible note: A form of financing where the company is lent money which acts like debt, unless… Continue reading
Crowd-Investing: Your first IPO
With LinkedIn, Groupon, and other tech companies in the news for going public, you can now pay attention to their IPO process and see the similarities to your crowdfunding strategy on Venture Bonsai. The motivations for IPO’s and crowdfunding are the same, and both involve drumming up demand, picking a price, and issuing securities to a large number of investors. Once your company makes it to an IPO (of course, if you decide to turn down all the acquisition offers) you will feel confident and in control, because hey, you’ve done this before.
The American IPO Process
1. Initiation
The IPO process is initiated by appointing roles to outside entities whose job it is to make the process run smoothly. Here, the company will decide on its underwriter and registrars.
2. Pre-Issue activities
The company now prepares its forms and documents. One such document is called the Prospectus, which is a part of the Due Diligence process, and contains all the facts an investor needs to make an educated investment. This document also fills a marketing role because the SEC limits the company’s marketing activities while it’s in the IPO process.
3. Filing the documents
The company then files its… Continue reading
In Crowd-Investing It Matters To Value Your Company Right
Valuing early stage startups is not an exact science. Angels and VC’s try to use criteria based on the strength of the management team, potential revenues, competitors, and potential exits in order to determine the valuation of their investments. But valuations can also be driven by demand from investors or fear of missing out on an opportunity.
When a company is getting funded, the starting point of its valuation is usually given by its investors. By naming a price first, founders risk giving their investors a bargain, or out-pricing them high enough to lose credibility. In crowd-investing you probably will not have professional investors driving your valuation, so we’ll take a look ways to tackle this issue yourself.
Self Valuation Steps
As you’re picking a valuation, it’s important to balance your needs against your investors’ needs. To entrepreneurs, a higher valuation means more money exchanged for less ownership of their company. But to investors, valuation is the key determinant of their investment’s return. Investors are putting money into your company based on the premise that the valuation of their shares will increase, and a higher valuation means less bang for their buck.
It may not even be great for your… Continue reading
In Crowdfunding, The First $100K Is Always The Most Difficult
We’re happy to announce that AppGyver Inc. has successfully closed its first crowdfunding investment round, totaling 100,000 USD. As all the investors were from Europe, the burden related to SEC regulation did not cause any trouble.
As far as we’re aware, this is also world’s first real crowd investing round! This is also a great milestone for Venture Bonsai as it has now been proven that the whole end-to-end process works well.
Lessons Learned
As this was the first of its kind, we learned a few things in the process that companies like AppGyver should pay more attention to.
Lesson #1: Get Your Papers Ready!
The first point regards preparing the paperwork. The round was started on February 9th but some of the must-have documents, such as the Shareholders’ Agreement, weren’t actually ready until late April. As one of the requirements for the investors is to sign (electronically) the Deed of Adherence to the Shareholders’ Agreement, nobody could really invest until that was completed. AppGyver also used its own set of documents (which is perfectly fine of course) but one must also keep in mind that Venture Bonsai offers, free of charge high-quality documents for companies to use. Even if… Continue reading
Press Release: New Crowd Investing Service Venture Bonsai Launched
NEW CROWD INVESTING SERVICE VENTURE BONSAI LAUNCHED
Venture Bonsai is a new tool for startups running Crowd Investing investment rounds. This means raising money from many parties in small chunks instead of a few larger investments. Venture Bonsai enables versatile pre-investment communication between the investor prospects and the entrepreneurs, combined with social media mechanisms. Venture Bonsai is first of its kind to offer a complete tool set for all parties to manage the whole investment process.
Supporting growth companies is largely seen as important for Europe and its future. However political intentions alone do not help, it is positive action that’s required. That is the idea behind Venture Bonsai, founded by experienced serial entrepreneurs with the courage to implement real and useful tools using private funds.
“Venture Bonsai is the first startup funding tool accessible to any private investor. It allows anybody to become an angel investor with investments just as small as 5000 euro, opening up the opportunity to invest in the next Googles or Facebooks”, says Antti T. Hannula, Chairman of the Board. “I’ve been an entrepreneur for quite many years, and it is amazing what you can achieve nowadays with relatively small investments, for example 100,000 euros.… Continue reading
COMUNICADO: Se lanza el nuevo servicio de inversiones en grupo de Venture Bonsai
COMUNICADO: Se lanza el nuevo servicio de inversiones en grupo de Venture Bonsai
Venture Bonsai es una nueva herramienta para iniciadores que utilizan las rondas de inversión Crowd Investing. Con ello se consigue dinero de muchas partes en pequeñas cantidades en lugar de menos inversiones de tamaño mayor. Venture Bonsai permite una comunicación versátil antes de inversiones entre los prospectos de los inversores y los empresarios, combinados con mecanismos para medios sociales. Venture Bonsai es el primero de su clase en ofrecer un set complete de herramientas para todas las partes y su gestión de los procesos de inversiones totales.
El apoyo al crecimiento de las compañías es considerado como importante para Europa y su futuro. Aún así, solo las intenciones políticas no ayudan, por lo que es necesaria una acción positiva. Esa es la idea detrás de Venture Bonsai, que se fundó por medio de empresarios en serie experimentados con el coraje de implementar las herramientas reales y útiles utilizando fondos privados.
“Venture Bonsai es la primera herramienta de fondos de inicio accesible por cualquier inversor privado. Permite a todo el mundo convertirse en un inversor ángel con inversiones de tan solo 5.000 euros, abriendo oportunidades para invertir en… Continue reading
Press Release: Lancement du nouveau Service Venture Bonsai pour les Investissements participatifs
Lancement du nouveau Service Venture Bonsai pour les Investissements participatifs
Venture Bonsai est un nouvel outil pour les jeunes pousses organisant des rounds d’investissements participatifs. Cela signifie recueillir des fonds auprès de plusieurs parties en petits montants au lieu de plusieurs investissements plus importants. Venture Bonsai permet une communication facile entre les perspectives de l’investisseur et les entrepreneurs, associée aux mécanismes des médias sociaux. Venture Bonsai est le premier de ce genre à proposer un ensemble complet d’outils afin que toutes les parties puissent gérer tout le processus d’investissement.
Soutenir les sociétés en pleine croissance est largement considéré comme important pour l’Europe et son avenir. Cependant, les intentions politiques seules ne sont pas suffisantes, c’est l’action positive qui est nécessaire. C’est l’idée à la base de Venture Bonsai, créé par des entrepreneurs expérimentés créateurs d’entreprises en série qui ont le courage d’implémenter des instruments véritables et utiles en utilisant des fonds privés.
<< Venture Bonsai est le premier instrument de financement des jeunes pousses accessible aux investisseurs privés. Il permet à n’importe qui de devenir un investisseur providentiel avec des investissements aussi peu importants que 5000 euros, en ouvrant la possibilité d’investir dans les prochains Google ou Facebook, >> a déclaré Antti… Continue reading
Press Release: Neuer Crowd-Investing-Service "Venture Bonsai" auf dem Markt
Neuer Crowd-Investing-Service “Venture Bonsai” auf dem Markt
Venture Bonsai ist ein neues Tool für Existenzgründer, die Investitionsrunden im Rahmen von Crowd Investing anstreben. Crowd Investing bedeutet, statt einigen wenigen grossen Investitionen kleinere Mengen an Kapital von mehreren Parteien zu sammeln. Venture Bonsai ermöglicht vielseitige Kommunikation zwischen den Investoren und den Unternehmern in der Vorinvestitionsphase, kombiniert mit Social-Media-Mechanismen. Venture Bonsai ist dadurch, dass er einen kompletten Tool-Satz für alle Parteien zur Verwaltung des gesamten Investitionsprozesses bietet, der erste Service seiner Art.
Die Unterstützung aufstrebender Unternehmen wird für Europa und seine Zukunft weitgehend als sehr wichtig angesehen. Politische Absichten allein helfen jedoch nicht, es bedarf aktiver Unterstützung. Das ist die Idee hinter Venture Bonsai, das von erfahrenen Serienunternehmern gegründet wurde, die die Courage besassen, echte und nützliche Tools mittels privater Gelder zu realisieren.
“Venture Bonsai ist das erste Finanzierungs-Tool für Existenzgründer, das für jeden privaten Investor zugänglich ist. Mit Investitionen in Höhe von lediglich 5000 EUR ist jedermann in der Lage, ein Unternehmensengel zu werden. Ein jeder hat die Möglichkeit, in das nächste Google oder Facebook zu investieren”, erklärte Antti T. Hannula, Aufsichtsratsvorsitzender. “Ich bin seit vielen Jahren Unternehmer, und es ist wirklich erstaunlich, was man heutzutage mit relativ kleinen Investitionen, wie… Continue reading
LEHDISTÖTIEDOTE: Uusi suomalainen kasvuyritysten rahoitukseen keskittynyt Venture Bonsai Internet-palvelu avattu
UUSI SUOMALAINEN KASVUYRITYSTEN RAHOITUKSEEN KESKITTYNYT VENTURE BONSAI INTERNET-PALVELU AVATTU
Venture Bonsai on uusi suomalainen kasvuyrityksille suunnattu netissä toimiva työkalu, jonka avulla yritys voi kerätä pääomarahoituksen pienissä erissä useilta sijoittajilta. Palvelu mahdollistaa potentiaalisten sijoittajien sekä yrityksen monipuolisen kommunikaation ennen sijoituspäätösten tekemistä, yhdistäen tähän myös sosiaalisesta mediasta tuttuja mekanismeja. Venture Bonsai tarjoaa ensimmäisenä maailmassa myös käytännön työkalut niin kasvuyrityksille kuin sijoittajillekin koko sijoitusprosessin läpiviemiseksi.
Kasvuyritykset ja niiden tukeminen nähdään laajalti tärkeänä yhteiskunnallisena asiana. Pelkät kauniit puheet eivät kuitenkaan riitä, vaan tarvitaan myös toimintaa. Venture Bonsai palvelun taustalla onkin kokeneiden yrittäjien näkemys tarvittavasta ratkaisusta kuten myös uskallus lähteä toteuttamaan konkreettista työkalua yksityisin varoin.
“Venture Bonsai on ensimmäinen todellinen kasvuyritysten rahoitukseen keskittynyt työkalu, mahdollistaen yksityissijoittajille esimerkiksi 5000 euron sijoitusten tekemisen helposti ja luotettavasti kasvupotentiaalia omaaviin uusiin kasvuyrityksiin”, sanoo hallituksen puheenjohtaja Antti T. Hannula. “Itse pitkään yrittäjinä olleena tiedämme miten pienelläkin, esimerkiksi 100.000 euron pääomarahoituksella, pystyy nykyisin tekemään pieniä ihmeitä. Toisaalta ilman tuota puuttuvaa summaa saattaa koko hanke jäädä tekemättä”, Hannula jatkaa. Alkuvaiheessa vain eurooppalaiset yritykset voivat kerätä palvelulla rahoitusta, ja toisaalta sijoittajat voivat olla mistä vaan Euroopan maasta.
Venture Bonsain perusidea on mahdollistaa kasvuyrityksille tuote- ja yritysprofiilin rakentaminen sekä näihin liittyen pitää Twitter-tyylisesti tästä yrityksestä kiinnostuneet mahdolliset sijoittajat ajan tasalla yrityksen etenemisestä. Sijoituskierroksen ollessa… Continue reading