Private Deal MasterClass
A: Before You Make your First Private Deal
To prepare for your first private deal, start by watching the Private Deal Masterclass, and research companies, understand your risk tolerance, and determine your investment strategy.
B: The Type of Deals You Can Invest in
Chris details the levels of deals such as Reg-CF, Reg-A, and Reg-A+ that are open to everyone regardless of income or net worth.
Risk, Reward And What's Right for You.
Investors to be cautious and selective when investing in equity crowdfunding, allocate a specific portion of their portfolio to speculative holdings, and diversify their investments in different sectors.
A: The Value Behind Valuations
Explore the topic of startup valuations through two scenarios and emphasizes the significance of considering the investor type and the company's expected earnings when targeting valuations, while also warning against investing in startups with unjustifiable high valuations and urging caution against deceptive valuations.
B: Three Ways to Value a Startup
Multiple evaluation models and knowledge of "EBITDA multiples" in different industries can help investors determine the worth of startups, while understanding a sector can increase confidence in investment decisions.
C: Tranches as a Valuation Tool
Tranche analysis is key for managing risk and allocating capital and a method of dividing a pool of assets into smaller, more manageable pieces with different terms and characteristics, such as maturity date, interest rate, and risk level.
Why More Startups Are Turning to the Crowd
Understanding the details of startup valuation and its impact on investors. Venture capitalists may suggest a lower valuation to get better terms for themselves, but founders can use their own judgment and research to determine the company's worth and turn to regulation crowdfunding to raise money at a higher valuation while keeping control.
D: Rolling Closes as a Valuation Tool
This approach offers flexibility, builds momentum for the offering, and minimizes the risk of over-commitment for both the issuer and investors.
B: Pre-Seed Rounds
In this module, Chris highlights the challenges of starting a company, the role of pre-seed funding from friends and family, the importance of early backers and founder investment, the growing trend of seeking retail investors, and the transition to series-round funding.
C: Series Rounds
In this module, Chris discusses the impact of regulation crowdfunding, making private investing more accessible, and highlights the benefits of equity crowdfunding for investors and startups, with a focus on Series A funding rounds and the opportunities for investors at different stages of a company's growth.
A: Overview of Seed Rounds
Chris explains that individual investors can participate in the Alpha Round or seed funding round, the earliest stages of a company's development, through equity crowdfunding, which allows early access without the risks of the pre-seed round reserved for insiders, and he promises to provide more information on pre-seed rounds in the next module.
B: Convertible & SAFE Notes
Convertible notes and SAFE notes in startup investments, emphasizing the preference for convertible notes with defined terms or guaranteed equity through priced rounds.
C: Price Rounds
The concept of priced rounds as an alternative to notes for startups, explains the capitalization table and the option of debt, provides an example of a company offering bonus shares, and hints at the next segment discussing how to obtain shares.
D: Preferred & Common Stock
Chris explains the process of converting notes into equity and obtaining shares upfront, discussing the advantages of preferred and common stock for investors. It also shares a personal example of investing in Vulcan Augmentics through WeFunder and receiving preferred shares that may convert to common stock in the future.
E: The Secondary Market
The advantages of investing in secondary markets for private equity shares, particularly through Forge Global, while noting the requirement of being an accredited investor, and mentions the Deal Hunters Alliance as a platform targeting early-stage companies with lower minimum investment thresholds.
B: Going Public: Perks, Pitfalls & Profit Potential
Module 9B explores the process, challenges, and potential benefits of startups transitioning from private companies to conducting Initial Public Offerings (IPOs), while emphasizing that IPOs are not common and most startups do not reach that stage.
C: Other Exits
This Module explores common exit scenarios for equity-crowdfunding investments, emphasizing the challenges faced by startups, the importance of due diligence and pivoting, and the potential returns or losses investors may encounter.
D: Getting Your Shares
The goals of investors, including the preference for a company to go public or be acquired, emphasizing the role of transfer agents in facilitating communication, transactions, and returns for investors.