9. Valuation p2, Ethics & Midwest Venture (Jeffrey Carter)

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Jeffrey Carter (part 2) where we finish the discussion on Valuation and also address ethics, and the Midwest Venture Environment.

Itunes:  http://bit.ly/1qL2Uce

 

Direct-audio:  http://bit.ly/1s1sebY

 

SoundCloud:  http://bit.ly/1HnmAez

Guest Links:

Key Takeaways:

I wanted to highlight a few quotes:

1- On communities: “Communities are not built by politicians, they’re not built by investors, they’re built by entrepreneurs. They lead the community, the build the community. They’re taking most of the risk and they’re doing the dirty work.”

2- On advice to new investors: “Get your hands dirty. Don’t be afraid. As a trader you can paper trade, but it’s not the same thing. If you want to angel invest, the best thing to do is make some investments, because it helps you learn.”

3- On successful angel investing: “Angels don’t do well as a lone-wolf. They do better in packs. You can get picked-off in later rounds by VCs if you’re a lone wolf. You can get watered out of a cap table. You’re better off in a pack.” The last thing I wanted to recap had to do with Exit values. While Jeff’s example, was specific to the midwest, I don’t think it matters where you are, if you are investing in startups that have modest exit potential. So, if you’re investing in a company where your top exit value will be $50-80M… you can’t take VC money and you really can’t even involve VCs. Need to look at investing and exits in a different way. Jeff mentioned that John Huston, current head of the ACA, has an approach to do this… so we will have to get him on the show to fill us in on it.

Tip of the Week: Pro-rata as a Right, Not a Privilege

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