Presented by @michelgeolier
In case you are a founder and were wondering how to…
Build a unicorn and walk away with nothing
Forbes’ Heidi Roizen concocted a great story showing entrepreneurs why terms matter more than valuation.
“Liquidation preferences, participation, ratchets – even the very term preferred shares (they are called ‘preferred’ for a reason) are things every entrepreneur needs to understand. Most terms are there because venture capitalists have created them, and they have created them because over time they have learned that terms are valuable ways to recover capital in downside outcomes and improve their share of the returns in moderate outcomes – which more than half the deals they do in normal markets will turn out to be.”
Check out the full story here - it’s a bit old but still very relevant.
In the news
Self-funded design tool company Sketch raised $20m Series A
Started in 2008 and profitable since day one, Sketch has never raise outside capital thanks to its 1m paying customers. Last week, the European company announced its first outside round - led by Benchmark - to accelerate its growth.
“There wasn’t much of a negotiation. We were like, ‘What do you guys want to do? Let’s do it.’" Chetan Puttagunta, general partner at Benchmark Capital.
Product Hunt launches a festival for “no-code” product makers
Good news for founders without programming skills.
This time round, we're celebrating the incredible products that can be made without any code. Get your creative juices flowing and start making your own beautiful tools—maybe even in a doc.
Zoom = Unicorn + Profitable
And everyone is amazed.
The billion-dollar company has already eked out $7.5 million in profits in 2019, after losing $3.8 million in 2018 and pretty much breaking even the year before, only losing $14,000.
Founder-controlled tech companies
Ahead of its IPO, Lyft seems to follow the path of other large tech companies with super-voting structures that give their founders control.
Per the WSJ: Lyft’s founders […] together own roughly 7% of Lyft, but will have nearly 50% voting control […]. The men will own shares that will receive 20 votes each, compared with one vote per share for common stockholders. That will give them significant influence over major decisions at the company, ranging from the election of directors to whether to sell one day.
Join our next event
I am gathering 10 founders to share their experiences and thoughts on how they financed their business and what lessons they have learnt from bootstrapping or raising venture capital. If you are an entrepreneur and want to join, shot me an email at mereo.community@gmail.com and briefly explain why you would like to join. Only 5 seats left.
Where? Wayra Deutschland, Kaufingerstr. 15, 80331 Munich.
When? Friday, March 29th at 9am.
Thank you for reading and please tell a few friends about Mereo if you feel like it.
Best,
Michel