Joe Meyer’s Post

Title: "Invest, Adapt, Thrive: Powering SME Success Stories" Every small-to-medium-sized business \SME\ has a unique narrative, a compelling success story. Some are born of innovation, others from sheer tenacity, but all are underscored by strategic investment and funding. Consider the tale of a small tech startup that secured early-stage funding. This financial boost enabled them to innovate, scale, and eventually secure a prominent position in the global technology market. Their journey wasn't merely about funds; it was about the confidence that investment infused in them. Similarly, a local retail store capitalized on a small business loan to expand their operations online. As they adapted to e-commerce, they revolutionized their business model, reaching customers far beyond their geographical limitations. Their story isn't just about survival, but about thriving in a rapidly evolving market through smart investment. In another inspiring instance, a family-owned restaurant embraced an angel investment to expand their footprint. They adapted their traditional business model, introducing a franchise system that propelled their growth. Their success story isn't just about expansion; it's about understanding the transformative power of strategic funding. These narratives highlight the crucial role of investment and funding in shaping SME success stories. But they also underscore another essential factor: the courage and willingness to adapt. As businesses navigate the ever-changing economic landscape, embracing change and leveraging strategic funding opportunities can fuel their growth and development in unprecedented ways. Investing in an SME isn't just about providing necessary capital. It's about fostering innovation, encouraging resilience, and enabling businesses to adapt and flourish. It's about believing in their vision and fueling their journey towards success. As we continue to support and celebrate SMEs, let's remember that every investment we make, every funding opportunity we provide, contributes to a new chapter in their success story. And in doing so, we not only champion their growth but also contribute to a vibrant, diverse, and resilient economy. #InvestInSMEs #AdaptAndThrive #FundingSuccess

A recent review of our portfolio pointed to a strong indicator of performance: quality of investor updates   The companies with better the investor updates (insight, regularity and analytics) on average performed better after we invested   So what is driving the quality of these investor updates and why is it correlated with business performance?   1 - Founders think like investors when they're not fundraising   It’s easy to get stuck in the weeds as the CEO of a startup — fundraising is often a chance to be pulled up to 30k feet and view your business from an outsider’s perspective   A founder who is able to carve out time beyond growing and firefighting to consider this perspective will fare better in the next fundraise and eventually at the time of exit   Investor updates and board meetings are a great chance to revisit that lens   2 - Founders understand the quantitative drivers of their business   Many founders pull up in fundraising and present a set of metrics to prove their traction The best performing founders manage their business to these metrics every day   My fav example: many CEOs only look at cohort analysis when they are presenting to investors in fundraising, and look at Shopify’s simple repeat purchase metrics the rest of the time   They don’t internalize why cohorts are so important, they just pull together the analysis that investors ask for   To do this analysis quarterly (or more) for investor updates requires a level of conviction and understanding that these metrics ultimately drive value   That conviction and understanding typically leads to better performance   3 - Founders want to be held accountable to performance   It’s fun to share wins and get responses back that say “LFG, crushing it!” But without context and KPIs these updates are generally hype and fluff   Our best performing companies have a culture of accountability to their budget and benchmarks   They want the scoreboard on display at all times, even on the bad days, because that is motivation and context for the pursuit to the top of the mountain   The best performing CEOs are not afraid of showing weakness and sharing setbacks, and as a result the investors have much greater trust in their updates on how the business is performing   4 - Founders care about their investors   Creating great investor updates and board materials is a TON of work (I know this from our own quarterly updates and LPAC decks)   Committing the time to do this consistently requires a real care for your investor base I’ve found the most successful founders go the extra mile for their investors because they recognize the importance of relationships are great at building them   These are the kind of people that other people root for, bet on and want on their team The same kind of people who thrive come fundraising, hiring, business development and acquisition time

To help Black-owned businesses identify best funding sources available, we asked CEOs and business leaders for their insights. Several options available for Black business owners to secure funding for their businesses. Read More: https://lnkd.in/gSU55ubk #BlackBusinessMonth

🌱Ever wondered what fuels the growth of some of your favorite startups? It's Growth Equity! 💼 But what exactly is it and how does it work? 🤔 Dive into our latest blog post to unravel the mystery behind this powerful financial tool. Let's grow together! 🚀 #GrowthEquity #FinanceExplained http://ow.ly/YcsM30sCpcA

If you have already launched your business chances are good that you have already implemented a fixed split that is causing some angst among the founders. You now need to unwind your fixed split so you can get on the right track with your equity. This will require you to retrofit the Grunt Fund. Retrofitting a Grunt Fund is fairly easy as long as everyone is willing to cooperate. #startup #business #startupbusiness #dynamicequitysplit #founderequitycalculator #equitycalculator #equitysplitcalculator #startupcompany #startupequity #startupequitycalculator

Board service in exchange for equity is a viable option for start up projects - whether these be a new restaurant, a mobile car washing company, or a music production project. Most entrepreneurs and/or artists are not familiar enough with this strategy to take advantage of it. Starting a new business from the ground up is rarely easy both in terms.of time and cash required. Both are usually in short supply at the start. Inviting an expert to help in running the business, procure financing, set up and maintain accounting records, or help make connections at a high level in exchange for equity can help take an idea to launch and beyond. Anyone you might consider inviting in to help in exchange for equity will first want to see your financial records or at the very least a capitalization table to see what is available and what is at risk. Here is a sample capitalization table https://lnkd.in/g3jYPbp7 Beware, however, that offering a board seat in exchangebfor equity can be a lengthy process that should involve a due diligence process on both sides. So start a conversation early. To learn more about how an agreement for board service and expertise running your company can help launch your startup, visit https://lnkd.in/em9BtHn.

🚀 Founders, Preparing for Series A? Here's What VCs Look For! 📊 As you gear up for your Series A funding, it's crucial to understand what investors examine in your financial sheets and metrics. Here’s a quick rundown to help you get investor-ready: 1. Income Statement 📈 Revenue Cost of Goods Sold (COGS) Gross Profit Operating Expenses Net Income Earnings Per Share (EPS) 2. Balance Sheet 🏦 Assets: Cash, Accounts Receivable, Inventory, PPE (Property, Plant, and Equipment), Intangible Assets Liabilities: Short-term Debt, Long-term Debt, Accounts Payable, Other Liabilities Equity: Common Stock, Retained Earnings, Additional Paid-In Capital 3. Cash Flow Statement 💸 Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase/Decrease in Cash 4. Capitalization Structure 🏗️ Equity Breakdown: Founders, Employees (via stock options), Investors Types of Equity: Common Stock, Preferred Stock, Convertible Notes, SAFE (Simple Agreement for Future Equity) Cap Table: Detailed list of shareholders and their ownership stakes 5. Expense and Revenue Projections 🔮 Detailed Revenue Projections: By product line, customer segment, geography, etc. Expense Projections: Operating expenses, capital expenditures, marketing budgets, R&D costs Getting these documents and projections in top shape will not only impress potential investors but also give you a clear roadmap for your growth journey. Good luck, and may your Series A round be successful! 💪✨ P.S. Don’t forget to get them audited. #Startups #VentureCapital #SeriesA #Fundraising #Entrepreneurship #FinancialPlanning

I want to talk about an important economic term that may be included in a term sheet. And that is the Pay-to-Play Provision. What is the Pay-to-Play Provision? The Pay-to-Play provision outlines the conditions under which existing investors are required to invest additional funds in order to maintain their ownership stakes in a company. It is a significant clause in a term sheet, especially relevant during challenging times like a down round financing – a round in which the valuation of the company is lower than its previous valuation. So how does the Pay-to-play provision work and how can it be relevant to your startup? Let's say your company has raised a round from an VC firm at a #10 million valuation. Now, imagine your company is facing financial challenges, and you decide to raise additional funds to stay afloat through a down round financing - let's say at a #5 million valuation. Assume that you have a Pay-to-play Provision already included in the term sheet. Now, because you're trying to raise this fund at a reduced valuation, new investors may not be willing to participate. However, the Pay-to-Play provision ensures that your existing investors are committed to supporting your company during tough times. They are obligated to invest more funds in proportion to their current ownership stakes to maintain their percentage ownership. That is, if your first investor owns 10% of the company, the Pay-to-Play provision mandates them to invest more money to retain their 10% ownership stake in the new round, even though the valuation has decreased. Why is this important? This provision is vital because it does not only infuse crucial capital into your but also sends a positive signal to potential new investors. The commitment of existing investors, demonstrated through the Pay-to-Play provision, can instill confidence in others considering investment. It shows that despite challenges, the current investors believe in the company's potential for recovery and growth, making it more attractive to prospective investors. So that's it, the "pay-to-play" provision. #venturecapital #investing #businessfunding

Determining the cost of a co-founder's share involves deciding on the equity allocation for each co-founder in the early stages of a business. There is no one-size-fits-all answer to this question, as it depends on various factors such as the nature of the business, the skills and contributions of each co-founder, the level of risk involved, and the negotiated terms among the founding team. Here are some considerations when determining the cost of a co-founder's share: Contributions: Evaluate the skills, experience, and contributions that each co-founder brings to the table. Consider factors such as industry expertise, technical skills, business development capabilities, and any resources contributed (financial, intellectual property, etc.). Risk and Time Commitment: Assess the level of risk and time commitment each co-founder is making to the venture. Co-founders who are dedicating more time or taking on greater risk may be allocated a larger share of equity. Market Standards: Research industry standards and benchmarks for equity distribution in similar businesses or startups within the same sector. This can provide insights into common practices and help ensure that your allocation is competitive and fair. Vesting Schedule: Consider implementing a vesting schedule, where co-founders earn their equity over time. This encourages long-term commitment and aligns the interests of the co-founders with the success of the business. Future Contributions: Account for potential future contributions. The initial equity distribution may not account for changes in responsibilities, roles, or additional contributions that co-founders may make as the business evolves. Investor Expectations: If you plan to seek external funding, consider how potential investors may view the equity distribution. Investors often look for a well-balanced and motivated founding team, and an excessively skewed equity distribution can be a red flag. Legal and Tax Implications: Consult with legal and financial professionals to ensure that the equity allocation is structured in a way that complies with legal requirements and minimizes tax implications. Open Communication: Transparent and open communication among co-founders is crucial. Discuss expectations, motivations, and concerns to reach a consensus on the equity distribution that everyone feels is fair and reasonable. It's common for co-founder equity to be divided based on a combination of these factors, and negotiations may be necessary to reach an agreement that all co-founders find acceptable. Keep in mind that the specifics will vary from one business to another, and there is no universal formula for determining the cost of a co-founder's share. The key is to establish an equitable distribution that aligns with the unique circumstances and dynamics of the founding team and the business.

A thorough foundation for learning the basics about #privateequity. If you are considering #selling your #smallbusiness, start with this primer