The Arithmetic of Deals

Let’s start with a few basics about how corporations work from a structure perspective, and the mechanics of investments. [Note: the same concepts apply to LLCs, but the vocabulary is different.] When you form your company, you will issue the initial shares of stock to the founding team.  For the sake of simplicity, let’s say that

Deal Structure – Purchase Option Buyback

By Frank Demmler Last week’s column may have hit a responsive chord.  I got a record number of e-mails by orders of magnitude (3 as compared to the usual 1). Nonetheless, raising money without giving up equity is a popular topic. Last week’s column started: Many first-time entrepreneurs, when discussing their fund raising needs, often close

Why Investors don’t want to Invest in your Deal

By Frank Demmler Note:  I’ve known and worked with Steve Czetli for 20 years. I am an admirer of TechyVent as an important and respected communications vehicle to the entrepreneurial/high technology/funding communities.  In a recent conversation, he and I agreed that fund raising remains a largely mysterious process for first-time entrepreneurs and angel investors.  We