Tag: Winning Angels

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Harvesting (7th Fundamental of Early-Stage Investing)

The last step of any investment deal is a successful exit – Harvesting. Notice that this statement says nothing about profitability, but rather the ability to walk away from a given deal. In the aviation industry, specifically pilot training, there is a proverb that says “any landing you walk away from, is a good landing.” Most landings are smooth and uneventful, but this statement technically includes crash landing an airplane and surviving the crash. In this regard, harvesting is the same way, ideally, one would like a nice, uneventful, and profitable exit, but should not discard the real possibility of a negative exit. David Amis and Howard Stevenson describe harvesting as, “the endgame of early-stage investments, the financial score by which you will measure your success” (p. 287, 2001). With this thinking in mind, below are some brief descriptions and highlights regarding positive and negative harvesting scenarios. Continue reading “Harvesting (7th Fundamental of Early-Stage Investing)”

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Negotiating (5th Fundamental of Early-Stage Investing)

Negotiating is perhaps the most romanticized aspect of partaking in an investment opportunity. The idea of meeting room negotiations is widely portrayed as the climax of movies, in TV advertisements, and other media outputs. However, David Amis and Howard Stevenson suggest that it is often the shortest stage because many winning investors simply do not negotiate (p. 225, 2001). On the other hand, they also acknowledge that “Negotiation will almost certainly bring improved terms” (p. 228, 2001). Unlike other fundamentals of early-stage investing, negotiating is not a spectrum of choices. Negotiating starts with a choice between actually negotiating and not negotiating at all. Both are valid options and deserve further analysis to better understand the intricacies of negotiating early-stage investment deals. Continue reading “Negotiating (5th Fundamental of Early-Stage Investing)”

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Structuring (4th Fundamental of Early-Stage Investing)

While some fundamentals are open to interpretation, early-stage structuring seems to have a more specific foundation. The principles behind structuring early-stage investment deals are to keep it simple, comprehensive, yet unrestrictive for future funding rounds. Regardless of the structure employed, it is important to consider its implications on future funding rounds. A simpler structure will speed up negotiations as the venture transitions from the angel round to VC funding. Below you will find some structuring highlights and links to helpful resources. Continue reading “Structuring (4th Fundamental of Early-Stage Investing)”

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Evaluating (2nd Fundamental of Early-Stage Investing)

The best way to approach evaluating early-stage investment deals (or any deals for that matter), is to think of it as an ongoing process. The idea behind evaluating investment deal is to cover all bases to determine its potential and suitability to an angel investor’s portfolio. A thorough evaluation of an investment deal will lead to an investment opportunity or a rejection. Both of these outcomes have important takeaways and are worthy of further analysis. There is no scientific formula for evaluating investment deals; however, there is plenty of steps that can be taken to assess an opportunity objectively. Continue reading “Evaluating (2nd Fundamental of Early-Stage Investing)”

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Mid-Year Update

Dear Readers,

Over the upcoming weeks I will be adding new materials to My Entrepreneurship Blog; mostly regarding entrepreneurial feasibility and early stage investing. I will be reviewing David Amis and Howard Stevenson’s book Winning Angels: The 7 Fundamentals of Early Stage Investing. This is an exciting opportunity to look at entrepreneurship from a different perspective. Also, I am working on a couple of intriguing interviews relevant to the discussions at hand. Overall, a lot of materials and tools that will certainly spark important conversations. Stay tuned!

Best regards,

-Jose F. Saavedra