Official website of Dave Berkus
- A lesson: How NOT to define your competition! 12/19/2024We investors see this all the time. An entrepreneur pitches using a deck with no slide for competition. When asked (as we always do), the response is “This is new. We have no competition.” Niet! No! Unh unh. Professional investors laugh when they hear an entrepreneur come out with that one. That statement has killed […]
- Would you pay a high achiever more than yourself? 12/12/2024Here’s a case study for yourself: Recently I was asked to review an offer letter for a senior director of business development. The CEO was concerned that he was offering far too much in the form of incentive compensation, with bonuses that could greatly exceed the base salary if all the bonus items were achieved. […]
- How little information can you give to investors-lenders? 12/05/2024Every investor or lender wants regular information from companies taking their money. And most of us are frustrated by the lack of regular communication – unless the company needs more money. On the other side, entrepreneurs and CEOs usually have a natural fear of giving too much information to investors and bankers after the initial […]
- Warnings about investor limitations! 11/27/2024Some businesses just can’t fit within the angel capital or friends and family model for raising funds. Sooner or later, you may need to seek venture capital and accommodate the needs of the venture community in negotiating the terms of an investment. What VC’s can and cannot do First, VCs in general cannot invest in […]
- The Berkus Method: Valuing an Early-Stage Investment 11/21/2024How do you value pre-revenue companies? Last time we examined ten different ways to value companies already in revenue, usually beyond the early stage. Now we tackle the more difficult and subjective task of placing a value upon those startups that don’t fit into that mold. For those of us who’ve invested in early-stage companies, […]
- How will a buyer value your business? 11/14/2024Let’s explore a number of methods to value your business. Many buyers use a combination of methods, throwing out those that do not fit the appropriate form of business. Corporate Valuations Using Various Methods There are at least ten recognized ways to value a business. Some are inappropriate for young businesses or those engaged in […]
- How much of my business do I have to give to an investor? 11/07/2024If you’re looking for growth capital, this one’s for you. We’ll cover what information you’ll expect to provide, your range of expected values and amounts of investment to expect. All to help you set your expectations. OK? Financial History and Projections Let’s start with the basics. If you are a going business with a track […]
- How to increase your valuation by reducing risk 10/31/2024Why reduce investor risk? In the creation of a young company, there are five principal risks to be addressed by the entrepreneur. Professional investors will probe these five risk areas and make the decision to invest based upon comfort with each. So, it is important for the entrepreneur to identify, address and mitigate each of […]
- What is a “Dirty Cap Table?” 10/24/2024First, how does it happen? When you seek professional investors, whether organized angels or venture capitalists, one of the early questions you are asked is “How have you financed the business so far?” Investors love to see entrepreneurs who have used their own money to ignite their businesses. But often, entrepreneurs turn to others for […]
- Would you sign a personal guarantee? 10/17/2024Is the guarantee still required today? More than ever, the banks and lenders today require personal guarantees from entrepreneurs, and even from CEO’s of funded businesses. Starting and running a small or growing business can be a challenge to the most confident and optimistic entrepreneur. And the process of borrowing money or financing asset purchases […]
