Tag Archives: VC

Vesting of Founders’ Shares – Basic Concepts

© Juli jk5854 / flickr, CC BY-NC-ND 2.0

© Juli jk5854 / flickr, CC BY-NC-ND 2.0

In my last blog post, I presented some ideas for determining the split of a startup’s shares among the founders. Another question that should be addressed in this context is the vesting scheme for founders’ equity: basically, what happens when a founder leaves the company earlier than expected?

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How Digital Business Models are Truly Special – Funding Options

In two previous articles, I discussed that digital business models are characterized by a cost structure with low marginal cost, and the implications of low marginal cost: more freedom in business model design, sales growth driving margin expansion, and potentially high valuations. The potential for high valuations makes digital business models especially attractive for venture capital (VCs).

On the other hand, digital business models often require upfront funding, and because of their cost structure, that funding typically can be obtained from VC-type investors only.

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Corporate Venture Capital in Germany – Impressions from the 8th Technology Day in Munich

On March 19, the annual Technology Day of the Munich Network took place for the 8th time. This event is one of the key events for the German VC scene. In line with a recent trend in Germany, this year’s conference focused on Corporate Venture Capital (CVC) and accelerators (conference program – in German language).

My background is in the IT industry, where – at least from a global perspective – CVCs traditionally are not the dominant force, since there is a lot of capital available from independent venture capital firms. Therefore, it was quite a surprise for me to see how important CVCs have become in other industries and in the German venture funding scene.

Here are some highlights I took away from the conference.

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How Digital Business Models are Truly Special – Implications of Low Marginal Cost

In my previous blog post I highlighted that digital business models have a fundamentally different cost structure than most traditional models – with a key difference being the low cost of revenue. Low cost of revenue in turn means low marginal cost, i.e. once everything is up and running, it doesn’t cost much more to serve additional customers.

Extremely low marginal cost has very interesting implications. Continue reading

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