What Theranos taught investors about commercialization in health care

Matthew McCooe’s piece deconstructs the effects of the Theranos fallout, translating what is easily viewed as an obstacle into a horizon of opportunity for investors. The lesson here points to the need to find better ways to protect investment bets, and in bioscience, research reproducibility is key. By exemplifying the critical importance of research verification, Matthew offers specific bioscience investment …

Funding Your Startup: Lessons Learned (and Advice on Avoiding Missteps)

Funding Your Startup: Lessons Learned (and Advice on Avoiding Missteps) Skipping your workout. Losing touch with a good friend. Getting sucked into Facebook/Instagram/Fantasy Football when you’re supposed to be practicing your board presentation. Hey, we all do stuff we regret. Yes, even whip-smart tech entrepreneurs stumble from time to time. Take funding, for example. A recent financing survey by The …

3 charts that show the effect of venture fundraising on founder ownership

3 charts that show the effect of venture fundraising on founder ownership Raising money inevitably dilutes the stakes of company investors, employees and founders, but the idea is that a growing valuation results in a net positive, as it increases the value of everyone’s now-smaller slice of the pie. That’s how we end up with billionaire founders like Bill Gates, …

Lenders: Do You Have These Critical Environmental Due Diligence Items on Your Checklist?

Lenders: Do You Have These Critical Environmental Due Diligence Items on Your Checklist? Environmental issues rarely result in liability for secured lenders thanks to legal protections laid out in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and similar state laws. Still, lenders shouldn’t ignore potential environmental hazards. Contamination can hamper a borrower’s ability to repay the debt and …

Deciphering Term Sheets

Deciphering Term Sheets An entrepreneur’s first dose of “reality” about the venture capital community often comes when a potential investor generates and delivers a term sheet for a proposed investment. Until that point, platitudes typically abound as the investor talks glowingly and enthusiastically about how much he or she believes in the startup. The entrepreneur’s excitement grows as he or …

“Oops, I Broke a Covenant”

In an earlier article, I wrote about how important having a “cash runway” is to a new company and that it is a favorite measure for lenders to use in gauging the ongoing financial health of a borrower. In fact, lenders may include a covenant, or contract term, related to a company’s cash runway in the credit agreement. Common covenants …