Paulhoff's Favorite Links on funding from Diigo

Convertible Note

Tue, 30 Oct 2007 16:36:35 -0000

Highlights and Sticky Notes:

convert the total amount of the note into equity when an institutional investor (such as a Venture Capitalist) makes an investment.

The cost of borrowing is lower for the seller, with convertable notes, since the buyer has the option of converting it into stock.

onvertable notes are a way for companies to raise capital without having to use their assets or give up ownership in their company.

Tags: funding

Posted by: paulhoff

UniQuest

Mon, 24 Sep 2007 18:32:21 -0000

Highlights and Sticky Notes:

niQuest bears all costs of commercialising an innovation, including patent searches, patenting and other legal costs.

Tags: funding uniquest

Posted by: paulhoff

Innovation Investment Fund Program (IIF) (Round Three) - Frequently Asked Questions

Mon, 24 Sep 2007 18:04:19 -0000

Highlights and Sticky Notes:

. The calculation to measure a fund's underperformance will only be utilised after year three of
a fund's life. Provisions relating to underperformance will be included in a fund's governing
documents and will be subject to consideration by the Program Delegate.

How long do successful Fund Managers have to make investments?

A. A licensed fund will have five years after the granting of a licence to make new investments.
    Investment after that time must only be follow-on investments unless approval is granted by
    the Program Delegate under specific circumstances. The Program Delegate's decision will be
    subject to advice from the IR&D Board.

What is the level of carry for current funds established under the IIF Program?

A. Current funds take 20 per cent carry from the 90 per cent profit allocated to private
investors. As with previous rounds, this will be negotiable between the fund manager and
private investors for the current round of the program.

Can a parallel fund be set up to invest along side a fund established under the IIF
    Program Round Three?

A. Yes. Applicants should ensure that parallel funds have adequate resources to ensure
    operational requirements are met. As well, appropriate conflict of interest provisions would
    need to be put in place between the funds.

Funds established under the IIF Program will be managed by private sector fund managers.
    Each fund manager will be licensed by the Australian Government and will be subject to
    conditions regarding investment activities and fund operations specified in licence agreements
    and associated investor documents. Fund managers will be responsible for making
    investment decisions and will invest in companies throughout Australia.

Tags: funding iif nicta

Posted by: paulhoff

Innovation Investment Fund Round 3 (IIF3) Now Open -- 9 November 2006

Mon, 24 Sep 2007 17:58:42 -0000

Highlights and Sticky Notes:

$200 million in the 2006 Federal Budget

each successful applicant will receive a licence of up to $20 million to establish a fund, to be matched by a minimum, dollar-for-dollar investment by the private sector.

We’re expecting two new licences every year for five consecutive years to maintain the impetus in developing companies by addressing capital and management constraints, with the first two to be announced in 2007," Mr Macfarlane said.

Tags: funding iif nicta

Posted by: paulhoff

Innovation Investment Fund Program (Round Two) - Eligibility Criteria

Mon, 24 Sep 2007 17:55:22 -0000

Highlights and Sticky Notes:

A licensed fund must invest in eligible investee companies

Tags: funding iif nicta

Posted by: paulhoff

Innovation Investment Fund (Round One and Two)- Interim Evaluation - Fact Sheet

Mon, 24 Sep 2007 17:53:30 -0000

Highlights and Sticky Notes:

support the provision of early stage capital, including seed, start-up and early expansion stages, to new technology based firms; to facilitate the creation of a self-sustaining, early stage technology based venture capital market; to develop experienced early stage venture capital fund managers; and to establish a revolving or self-funding program.

IIF is providing $358.4 million to achieve these objectives, of which the Australian Government is contributing $220.7 million and the private sector $137.7 million

delivered through nine private sector venture capital funds

one very successful exit from the internet search company, LookSmart.

Tags: funding iif nicta vc

Posted by: paulhoff

VentureBeat » What motivates an investor to say “yes”

Tue, 11 Sep 2007 21:58:03 -0000

Highlights and Sticky Notes:

Venture investments by their very nature require a leap of faith (none more than ours) that only comes when an investor becomes aspirational – when he or she wants the investment to make sense (even though statistically deals never do make sense).

three things come together for the investor

They personally believe in the entrepreneur

they have a sense (and it’s often just a gut feeling) that the idea could be very big

have a personal interest or background in the industry that gives them a leg up the diligence curve.

So my advice, if you’re an entrepreneur trying to raise money, is focus on these three levers. If you’re not the evangelist, ‘people person’ type, find someone who is and make them your front person.

convincingly convey a sense that yours is a big idea then go looking for investors who love the stuff you do.

Avoid the trap of pitching anyone who will listen. It’s exhausting and demoralizing.

carefully from among those with an expressed affinity for your sector – they’ll be the ones with a tendency towards the aspirational.

Tags: funding pitch venture

Posted by: paulhoff

Startup Company Lawyer

Tue, 31 Jul 2007 01:07:41 -0000

Highlights and Sticky Notes:

I think that if there is a bridge loan after a Series A financing, the investors should receive the same level of representations and warranties that the previous Series A investors received.

Tags: bridge funding terms vc

Posted by: paulhoff

Venture Hacks — Should you raise debt or equity?

Sun, 22 Jul 2007 18:01:25 -0000

Highlights and Sticky Notes:

5% per month or every two months

Tags: funding return valuation venture

Posted by: paulhoff

Charles River Ventures’ Angel Experiment: First Nine Investments

Tue, 15 May 2007 11:16:58 -0000

Highlights and Sticky Notes:

When Charles River Ventures announced its Quick Start program last year to provide a few hundred thousand dollars to startups on an expedited basis, it caused minor ripples in the Angel funding market.

CRV is doing very well overall. They say their 2000 fund will return 2-3x to limited partners, an excellent return by any measure, particularly given the 4 year nuclear investment winter from 2000-2004.

Tags: early stage funding vc venture

Posted by: paulhoff

Early Stage VC Investing

Tue, 15 May 2007 10:42:38 -0000

Highlights and Sticky Notes:

Early-stage investors are moving down the road and investing more and more of their funds in later-stage companies.

In 1996, 42% of all venture dollars were invested in Series A. Ten years later, that figure is down to 20%. Meanwhile, the percentage of money invested in Series B or later has risen from 56% in 1996 to 73% in 2006 (note that seven percent of capital deployed in the first half of 2006 went to restart financings – another post in itself but also a clear sign that the aftermath of the bubble is still with us). Later-stage investments alone have risen over the last 10 years from 33% of venture dollars invested to 49%.

time-to-exit has lengthened considerably over the past decade, and not everyone has the ability to be patient and wait for the liquidity event to occur.

given the large size of many venture funds, it’s just not a viable model for them to invest $2 million in a first-round financing and commit 10-15% or more of a partner’s time working with that company over the five-to-seven years it may take to reach a liquidity event.