Venture capital Flashcards
1
Q
Models
A
- Dilution model: venture capital folks get a percentage of your company while you get money from them – ho do they make money from it?
- Shark Tank model: similar but different
- Money offered in Shark Tank’s negotiations is much less than usual in other venture capital schemes, the items discussed often do not involve patents (some do), and at least on TV, the “due-diligence” is not apparent, although it may well occur after sessions and behind closed doors
- State-to-state differences
2
Q
Funding (1st round)
Venture capital
A
Series A
- Lasts about 2 years
- ~$500k to $5 million
- ~ 40% of company
Series B: more
- not necessarily same investors at this point
- > 50% of company owned by investors
- They can impose their own CEO
Series C: manufacturing (~15 mil)
- by this time may end up with multiple people who have a piece of the action
- initial investors go from 100% ownership to 5%
- company goes from $2k to millions
Since the 1990s
3
Q
1st round funding
Shark Tank
A
~ $200k
Deals made subject to final examination
