Worthworm Wisdom

Insights for entrepreneurs & investors

Posted by admin on 2014-03-31 15:20:40 | 0 comments

In the early 1980s, before federal laws allowed institutional pension funds to invest in venture-capital funds, venture capital looked more like angel capital does today. It was early-stage, high-risk capital. A typical venture capital fund might have had $4 million, and its managers would consider individual investments of $500,000 to $1.5 million. In response to the influx of pension fund money, many venture capital funds have grown to a size of $100 million to $200 million. They are looking at sectors like information technology and health care for larger investments, … Continued

Posted by admin on 2014-01-21 02:35:05 | 0 comments

Many startups turn to pitch events and shows like Shark Tank when seeking funding. If you’re considering going that route, Worthworm helps you answer critical questions like, “What is my business worth?” and avoid getting eaten alive. Here are some of the common questions we’ve received from ventures heading into the tank or on the stage. What kind of venture does Worthworm work best for? Worthworm focus on early stage ventures that are: 1. Seeking angel investment 2. Of a quality, nature, and maturity (seed stage to early revenue, generally) … Continued

Posted by admin on 2014-01-15 03:36:00 | 0 comments

Worthworm uses a blend of questions from some of the most popular valuation methods, including the Venture Capital (VC) Method. This methodology calculates a valuation using the venture’s anticipated value and ROI. Learn more about it in our Valuation Methods Spotlight on the VC Method. Choosing valuation methods is one of the many confusing challenges of startup funding negotiations. There are several popular methods, each with its own approach to determining how much a venture is worth. Previously, we’ve discussed the Berkus Method and the Scorecard Method. Now, let’s take a look at the … Continued

Posted by admin on 2014-01-07 03:41:01 | 0 comments

Recently Worthworm’s founder, Paul Jackson, was interviewed in order to get to know what makes him tick and hear the story behind his impetus for starting this venture. Learn more about Paul’s background, how he came up with the idea for Worthworm and his plans for the company. Worthworm’s founder, Paul Jackson, may not seem like an entrepreneur at first glance. Paul has a background in angel investing, aerospace engineering, and most recently in business engineering. Although he comes from a different world, Paul discovered an overlap between his individual passions … Continued

Posted by admin on 2013-12-31 03:43:27 | 0 comments

There are so many terms and concepts thrown around in the business funding world that it could use its own dictionary. One particular area where there seems to be confusion is the different types of investors. Many entrepreneurs use “angel investor” and “venture capitalist” (or “VC”) interchangeably because they consider both to be sources of funding. However, these two types of investors are actually quite different, and these differences may clarify which one is the best fit for your needs. The principal difference between angel investors and venture capitalists is … Continued

Posted by admin on 2013-12-03 03:51:40 | 0 comments

The life of an angel investor may seem glamorous from the outside, but behind the scenes, it’s often fraught with stress and pressure. Entrepreneurs usually feel that they are the ones putting themselves on the line in funding negotiations, but investors have equal amounts of anxiety – some related to similar issues the entrepreneur is concerned with, like business valuations, and others that are unique to the investors’ role, like whether they will get their money back. Whether this is one of your first angel investments or you’ve funded numerous … Continued

Posted by admin on 2013-11-26 03:54:27 | 0 comments

Valuation is part art, part science, and at Worthworm, we’ve developed a sophisticated analytic engine to provide a credible pre-money valuation (PMV) that entrepreneurs and investors can feel confident sharing and defending. Take a look under the hood, and learn about the three modules that drive Worthworm’s analytics: the Input Question Module, Comps Module, and a Real-Options Technology Module. Determining how to value a business is part art, part science, and at Worthworm, we’ve developed a sophisticated tool to provide a credible pre-money valuation (PMV) that entrepreneurs and investors can feel confident … Continued

Posted by admin on 2013-11-22 03:57:17 | 0 comments

While we often speak of best practices to pitch angel investors, what we don’t often hear about is direct advice from them on realistically valuing a business, what irks them the most, what their likes and dislikes are, and what irritates them enough to end a meeting. Worthworm has a vested interest in making negotiations between entrepreneurs and angel investors more successful, so we recently conducted a survey of investors across the country to examine their attitudes and expectations. Interestingly, our research found investors are keen to make more investments in 2014, while … Continued

Posted by admin on 2013-11-14 04:07:50 | 0 comments

Worthworm uses a blend of questions from some of the most popular valuation methods, including the Berkus Method. It’s one of the most well-known and widely respected methodologies (especially for technology startups) and uses both qualitative and quantitative factors to calculate a pre-money valuation. Learn more about it in our Valuation Methods Spotlight on the Berkus Method. Choosing a valuation method is one of the many confusing challenges with valuing early stage companies. There are several popular methods, each with their own approach on how to best determine how much a … Continued

Posted by admin on 2013-11-12 04:11:27 | 0 comments

In Part 2 of this series, we’ll share results from the second part of our Angel Investment in America Report. In mid 2013, Worthworm commissioned research firm OnePoll to conduct a survey of U.S. angel investors in order to learn more about their past investments and their outlook on the future. Read on to see the results from the second part of this survey. In Part I of this series, we shared results from the first part of our Angel Investment in America survey that Worthworm conducted in mid 2013. We … Continued