Business Life Cycle Stages of a Start-up

The business life cycle model uses 4 stages start-up, growth, maturity, and decline to define the different phases a business will experience in its lifetime. Each stage comes with its own characteristics and problems to solve, and the business must determine which stage has been reached in order to be able to plan and forecast effectively.

Business Life Cycle Stages of a Start-up November 22nd, 2017Team
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Enterprise Value vs Equity Value

Enterprise value (EV) and equity or market value (MV) are two different terms used in the determination of the value of a business. Enterprise value is the value placed on the net operating assets of a business by all stakeholders, whereas equity value is the value placed on all assets of the business less its net debt by equity holders.

Enterprise Value vs Equity Value November 14th, 2017Team
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Series A Cap Table Modeling and Convertible Notes

When a business outgrows the funding provided by angel investors it might seek more substantial investment from a Series A funding round. The Series A round is often a trigger for the conversion of convertible loan notes and an increase in the stock options pool. The Series A capitalization table is used to show the effect on the percentage ownership of a business following these changes.

Series A Cap Table Modeling and Convertible Notes October 4th, 2017Team
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Angel Investors Cap Table Modeling

When a business has outgrown funding from family and friends it might seek more substantial investment from business angels to fund for example product development, prototype production and market research. The angel investors cap table is used to show how the current shareholders, including the founders, are diluted by the introduction of this seed investment.

Angel Investors Cap Table Modeling October 3rd, 2017Team
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Pre-Seed Investors Cap Table – Startup

When a business is in its early stages and has perhaps developed an idea but does not yet have a working prototype of its product or traction and revenue, it often needs to be funded by outside investment capital from family and friends or other pre-seed investors. The pre-seed investors cap table can be used to demonstrate how the founders are diluted by the introduction of this outside investment.

Pre-Seed Investors Cap Table – Startup September 27th, 2017Team
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Stock Option Pool – Effect on Cap Table

A stock options pool is created by a startup business in order to set aside sufficient shares to enable it to build up, incentivize and retain a team of key personnel. The effect of the stock options pool is to dilute the existing shareholders.

Stock Option Pool – Effect on Cap Table August 24th, 2017Team
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Pre-Investment Cap Table for Startups

The startup cap table is a record of who owns what percentage of the equity of a startup business. Prior to any investment it simply represents the ownership of the founders and any equity awarded to the team including employees, consultants, and advisers.

Pre-Investment Cap Table for Startups September 15th, 2017Team
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Angel Investor Funding for Startups

Angel funding is used to provide a startup business with equity investment to fund growth. The angel investor is seeking higher returns for the risks involved and tries to limit the initial valuation placed on the business in order to maximize their equity percentage.

Angel Investor Funding for Startups May 30th, 2017Team
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Bootstrap Finance and Financial Goals

The availability of finance for a startup business determines its ability to expand and grow. By using bootstrap finance the growth will be slower but the value of the business needed to meet the personal financial goal of the entrepreneur will be smaller.

Bootstrap Finance and Financial Goals March 22nd, 2017Team
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Working Capital Financing Strategy

A business needs to finance its working capital requirements using a combination of short term and long term funding sources. Permanent working capital is best financed with long term funding such a equity or long term loans, whereas temporary seasonal working capital is best funded by short term loans or overdraft facilities.

Working Capital Financing Strategy December 7th, 2016Team
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