A marketplace can be defined as any 3rd party that connects supply (seller) and demand (buyer) while an e-commerce business—by definition—takes transactions online. In both types of businesses, the total flow of transactions, or the gross transaction value, does not go directly to the company. An e-commerce or marketplace business may only take 15

For the entrepreneurs out there: venture capitalists invest in people. Once you understand how to pitch a company, even if investors think your idea isn’t a home run, they’ll be confident enough in you to offer some advice and you can continue to build a relationship that could last a lifetime. All from a successful pitch.

I would just say that, in my experience, if you really want to go into venture capital…don’t let people tell you that you can’t do it. Make your own path and just go. Like, just do things. Just start down the path. Maybe you don’t know where you’re going to end up or if you’ll get there necessarily, but just start doing things that you think will h

Now we can understand post-money valuation as the value of a company, immediately after the latest amount of venture capital is invested.

A venture capital firm invests under the premise of an upside scenario, this is to say that if the firm invests in 10 companies through the fund, they only expect one or two companies to hit a home run (an 8-10x return or more), and couple solid returns ( >1x), while the other six or seven companies may fail (no return) or simply return the amou

If a company’s cash flow is unpredictable or they have not yet established a solid brand, equity financing can serve the purpose of reaching that particular milestone allowing the business to focus directly on growth and expansion. If a company needs to buy new equipment tied to revenue like a data center, new inventory, or seasonal labor to meet d

The process works like this: private equity firms look for companies with a high free cash flow, great management and strong consistency in sales. When a firm becomes interested, they execute an LBO in order to purchase a company and then transfer that debt, or money owed, to the target company. They will then use the free cash flow of the company

In the 1980s, if a technology company needed to build a factory or buy several pieces of equipment, companies preferred to take out loans instead of giving equity away for something that was not directly linked to hitting the next milestone.

If we really break down venture debt, it allows a company to accelerate towards the next milestone with the application of quick cash, and increases the likelihood of actually reaching that milestone, all while minimizing the equity dilution that would inevitably occur with another round of equity financing.