One Thing: Day 382: Going Public / The Social Network
Day 382: Going Public / The Social Network
I hope you had a good weekend.
Gotta say I’m in a really good place right now.
But this place has really great drink specials.
Speaking of drinking…
Here’s how my Sunday night conversation went after I watched the Oscars.
Female Officer: You’re staggering
Me: You’re pretty damn cute yourself.
We just laughed and laughed and laughed…
I Need Bail Money.
In other news…
Some people will never accept you because your drive triggers their demons.
Your ONE COACHING THING Today Is:
I spoke to my mentor and we’re talking about the pros and cons of me doing an ICO or an IPO (going public)… and essentially, let’s just say, playing at a higher level.
I have a background in licensing / franchising and I’ve therefore read/written/reviewed more monster-sized contracts than I care to think about.
I was doing a little ‘ Karl Bryan Review ’ ongoing public over the weekend and there were some common terms that I came across and that I thought would be of value for you and your high-end coaching clients.
Accelerator: These help start-up founders scale up and the norm is having the people running the Accelerator invest in the businesses they’re helping.
*We essentially have a ‘Business Coaching Accelerator’ where we help our successful business coaches scale up and successfully build teams of 10 to 100 business coaches under them…
We provide vendor financing to allow them to grow and manage their cashflow.
**If you know of a LEGIT business coach that is interested in building a TEAM of coaches (lightweights need not apply) send them our way.
Dilution: This is a reduction in the percentage of ownership that occurs as the company issues and sells more stock (equity in the business) to raise new rounds of funding.
When the number of outstanding shares increases… each of the shares become less valuable.
*If you’re coaching founders you should make sure they have an ‘anti dilution’ clause to protect themselves so they don’t end up like Eduardo Saverin who sued his best friend Mark Zuckerberg for allowing Peter Theil to dilute Saverin’s shares but not Zuck’s LOL.
If you’ve seen The Social Network… this situation was central to the entire movie.
Protective Provisions: These are veto rights that allow investors who hold preferred stock to block actions, they don’t approve of, like selling stock, taking on debt or approving mergers.
Pre and Post Money Valuation: Pre-money and post-money differ in the timing of valuation.
Pre-money is the valuation the business receives excluding a new round of investment being realized.
Post money is the pre-money valuation PLUS the latest capital injection / money raised. If a company has a Pre Money $10 million dollar valuation and then raises $2 million…
The Post money valuation would be $12 million.
The start-up founder would negotiate with the investors on the Pre Money valuation and these negotiations would factor in the long-term potential of the business and whether convertible notes will be calculated in the Pre or Post money valuation.
Convertible Notes: A powerful and common tool used for start-ups with limitless potential but unclear path ahead. Think of these as short terms loans (aka debt) that have the ability to convert into stock (equity) at a later stage if a further equity round is raised.
The convertible note will normally get the stock (equity) at a discount to what others would be paying in the current raise.
Drag Along Rights (DAR): DAR allow a majority shareholder to mandate the others to accept an offer of purchase.
Blocking Rights: means the right or ability (direct or indirect) of an owner to veto, delay, impair, interfere with an action proposed by the company and are usually only granted via preferred stock financing.
Most Favored Nation (MFN): An MFN clause ensures previous investors receive the benefits of any more ‘investor friendly’ terms that are negotiated.
MFN clauses should be reviewed very carefully to avoid experienced investors to cherry-pick better terms and create an unfair advantage.
Pro Rata Rights: These provisions automatically allow an investor to participate in future raises so they can keep the same percentage ownership in the company they invested in.
Experienced investors will sometimes also ask for a “super pro rata right” allowing them to buy more than their ‘pro rata’ shares of future raises in order to increase the percentage of the company they own.
There is plenty more to know about going public…
But knowing these terms will help you THINK at a higher level and also help your high-end coaching clients where these questions may come up:
Do you know anything about going public…
Well now you know some of the KEY things you should explain and for them to know.
Even the most complex business models are reasonably straightforward when all is said and done.
You heard it here first.
Obsessed with your business coaching success,
Karl Bryan aka King Karl
PS. You’re high-end coaching clients are not overwhelmed… you just haven’t managed to get them focused yet.
PPS. Marriages break up from lack of money… over lack of love X 100.
Business failures lead to destruction, addiction, depression, anxiety, suicides, and unfortunately, far more.
As good business coaches we save marriages, save families, save kids from self-destruction… we save lives!
A true-life of purpose.
PPPS. If you’re looking for a proven system to follow for your coaching…. I created business coaching software and high-end step-by-step training to support it…
It’ll teach you ‘How to find any small business owner $100,000 in 45 minutes without them spending an extra dollar on marketing or advertising.’
Imagine finding your annual $12,000 to $50,000 coaching fees BEFORE you started coaching your new clients?! And a proven coaching system created for you to follow with your new coaching client.
Reply to this post if you want to start following a proven coaching system.
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Entertaining, Informative, Uncensored, Unedited:
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Karl Bryan gets clients for Business Coaches...period. He is the Founder and Editor-in-Chief of The Six-Figure Coach Magazine and Chairman of Leader Publishing Worldwide, home of the largest private community of Business Coaches (24 countries and counting) in the world.
His goal is straight forward… to help serious coaches/consultants get more clients.