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Browse: Home / Growth Equity

Growth Equity

Unicorpse and The Moral Hazard of Making Unicorns

Unicorpse and The Moral Hazard of Making Unicorns

By Derek Pilling on January 8, 2016

I’m sure that many more thoughtful than me has written about the moral hazard of venture capital. In economics, moral hazard occurs when one person takes an unreasonable risk because someone else will bear the burden of the negative consequences. In the age of unicorns, the moral hazard in venture capital has never been greater. Moral hazard […]

Posted in Business, Featured Posts | Tagged Company Building, Entrepreneuriship, Growth Equity, lessons learned, moral hazard, Raising Capital, unicorn, unicorpse, venture capital

Kindred Disciplines: Growth Equity and Growth Hacking

Kindred Disciplines: Growth Equity and Growth Hacking

By Derek Pilling on January 14, 2015

Growth hacking is now a mainstream term in tech circles, particularly those that are consumer-focused. Growth hackingdefinitions abound, but generally emphasize a data driven, creative and flexibly opportunistic approach to customer acquisition. Many would argue that growth hacking is simply a new term for an old concept – marketing. While the functions, tools and skills […]

Posted in Entrepreneurship, Featured Posts | Tagged CAC, customer acquisition cost, Customer retention, Customer Success, Growth Equity, Growth Hacking, lifetime customer value, LTV, product market fit

We Sell the Ultimate Commodity – Money

We Sell the Ultimate Commodity – Money

By Derek Pilling on May 1, 2014

Last month I participated in a panel discussion at Denver University organized by Maclyn (Mac) Clouse. Mac is a long-time educator and supporter Denver’s entrepreneurial community. I was joined by Peter Adams, Executive Director of the Rockies Venture Club. Mac’s setup for the discussion was “dangerous” because he offered both Peter and I the opportunity […]

Posted in Business, Entrepreneurship, Featured Posts | Tagged DU Finance Forum, Growth Equity, lessons learned, Mac Clouse, Peter Adams, Raising Capital, restrictive covenants, Rockies Venture Club, value-add, venture capital

Founder Liquidity and Growth Equity

Founder Liquidity and Growth Equity

By Derek Pilling on March 13, 2014

I’m seeing more and more growth equity financings come to market with an over-sized component of the financing allocated to existing shareholder liquidity. I’ve seen enough of these transactions to consider it as a trend and to wonder what is motivating it. Founder Liquidity in Context Whereas liquidity isn’t typically a feature of venture financings, it is […]

Posted in Entrepreneurship, Featured Posts | Tagged founder liquidity, Growth Equity, investment bankers, Raising Capital, risk, venture capital | 1 Response

Finding harmony between advice and self-interest

Finding harmony between advice and self-interest

By Derek Pilling on January 31, 2014

I just wrapped one of those calls where I had the opportunity to give advice to an entrepreneur that runs counter to my short-term interests. In this case, it is a story of a first-time entrepreneur who has built a $7 million revenue business and is wrestling with the decision whether to take growth capital […]

Posted in Entrepreneurship | Tagged Entrepreneur, exit, Growth Equity, lessons learned | 1 Response

What is an entrepreneur to do when restrictive covenants become restrictive

What is an entrepreneur to do when restrictive covenants become restrictive

By Derek Pilling on January 27, 2014

Restrictive covenants are standard features of venture capital, growth equity and private equity transactions although each investor type has its own standards. Restrictive covenants are the actions a company cannot take without investor approval. A short list of typical restrictive covenants includes: A sale of a Company or sale of a majority of the Company’s […]

Posted in Entrepreneurship, Featured Posts | Tagged Growth Equity, lessons learned, restrictive covenants, venture capital, Working with Invesors

Basics of Unit Economics Analysis

Basics of Unit Economics Analysis

By Derek Pilling on January 22, 2014

When an investment passes our first-screen at Meritage Funds, the first deep-dive we typically do is on the unit economics of the business. Unit economics are the fundamental financial building blocks of a business. If you can pin down the unit economics, you can determine contribution margins, break-even points and perform ROI calculations all of which […]

Posted in Business | Tagged average customer lifetime, capital expenditures, churn, contribution margin, Economics, Growth Equity, Investment Selection, marginal operating costs, Raising Capital, unit economics

Growth Equity Investors are Hedgehogs; VCs are Foxes

Growth Equity Investors are Hedgehogs; VCs are Foxes

By Derek Pilling on January 21, 2014

Growth equity is increasingly being recognized as an investing discipline that is separate and distinct from venture capital. That being the case, how does one distinguish between a venture capitalist and a growth equity investor. In my mind, growth equity investors are hedgehogs; venture capitalists are foxes. Allow me to explain. Ever since I read […]

Posted in Entrepreneurship, Featured Posts | Tagged Good to Great, Growth Equity, growth equity invetors, growth stage businesses, Jim Collins, venture capital, venture capitalists

Image credit: GigaOM

One Surefire Way to Screw up Your Lifestyle Business

By Derek Pilling on September 2, 2011

Some businesses are designed – maybe even destined – to be owner operated. Industry parlance often refers to these businesses as lifestyle businesses. Wikipedia has a nice definition. They are typically small, profitable, generate cash and enable their owner-operator to sustain a well-above average lifestyle. In some circumstances, they may even make their owner-operator filthy […]

Posted in Entrepreneurship | Tagged Entrepreneur, Growth Equity, Investment Selection, Investor, lessons learned, lifestyle business, Raising Capital

An Entrepreneur’s Growth Equity Conundrum: Should I sell stock or sell growth?

An Entrepreneur’s Growth Equity Conundrum: Should I sell stock or sell growth?

By Derek Pilling on November 12, 2010

Two times in the past year, I’ve been close to making an investment in two separate micro-cap growth equity opportunities only to have the opportunity go sideways deep into the process. The two businesses share a lot in common; they are similar in size, profitability, and growth prospects. Both are capital-intensive; the first being asset […]

Posted in Entrepreneurship, Featured Posts | Tagged business, Entrepreneur, Entrepreneurship, Growth Equity, Investor, Private equity, startups, vc funding, venture capital, venture funding

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