The Investing King - Review
Summary and Analysis of Blankenship’s Book:
Why We Wrote This Book for Investors and Entrepeneurs...
Along with designing and building America’s top startups, Ross Blankenship has also written extensively about his experience in creating next generation companies (many of the best startups which are featured here).
Co-Authors of "The Investing King," Ross Blankenship and Eugene Chung, decided to write a book about investing and startups because they wanted to prove that literally anyone could become an angel investor or venture capitalists, if given the best tools to succeed.
Published in January 2018, the book on investing in startups summarizes the journey of Ross Blankenship from entrepreneur to venture capitalist and things he's learned along the way such as:
How to raise funding and capital for your startup.
How to best structure your startup legally, financially, and operationally.
How to achieve the highest valuation for your startup.
And for future investors, the book's valuable lessons include:
Examples of startups that became major success stories, and why they became forces in their industries.
How to spot the next billion-dollar startups.
How to get started investing, including red flags and caveats before you begin.
How to understand startup financials, valuations, and investments, no matter if you're a beginner, intermediate or advanced investor.
Within this review page for The Investing King, you'll find the key definitions, terms, concepts and documents and examples that shaped the book. These will allow you to get started as an angel investor, venture capitalist or entrepreneur, and hopefully help you make better investing decisions as you begin your journey.
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Startup Definitions, Terms and Concepts to Learn:
Definitions & Concepts for Startups
Ambivert – Ambiverts possess a combination of both introverted and extroverted personality types, and is the most ideal for a successful business.
Articles of Incorporation – A set of formal documents filed with a government body to legally document the creation of a corporation.
Blankenship Startup Valuation Method - a method for calculating the valuation of a startup that uses five key elements: people, product, process, traction and financials.
Brand Culture – Brand Culture is when a company is recognized for its “brand name” and has a community of evangelical followers who are interested in that company and its products.
BUILD – An acronym that explains potential problems startups may face as they build their founding team and expand by hiring new employees.
Bylaws and Board of Directors’ Documents – A set of documents that cover the name of the company, founding members, the Board of Directors, committee type, officers, meetings, conflicts of interest and amendments.
CAPTURE – An acronym explaining how the presence of a great process allows for a company to gain traction, which will ultimately have a positive impact on the growth of a startup.
Convertible Notes – Convertible notes are structured as loans with the intention of converting the loan into equity.
Economics and Control – The economics of a deal revolve around the startup’s structure before the acquisition of capital and how equity is split between the initial founders. Control refers to who is in charge of the startup through every growth stage.
ELEVATOR – An acronym that helps determine whether a product has the traits needed to be successful.
Growth Hacker – The Growth Hacker is a storyteller who can craft a good narrative for the company and tell that story to the general public through the use of social media and the Internet.
Hacker – The Hacker is the core engineer, responsible for coding and building the product.
Hustler – The Hustler’s main focus is to bring in many consumers in the most cost-effective way possible
IRS Employer Identification Number – The IRS Identification Number is used to identify a business entity and is also known as a Federal Tax Identification Number.
Lifetime Value (LTV) – The Lifetime Value is a prediction of the net profit attributed to the entire future relationship with a customer.
Liquidation Preference – The liquidation preference determines the payout order in a liquidation event, such as the sale of the company.
Minimum Viable Product (MVP) – The MVP is a functioning demo of a product and its key features.
Open-sharing phenomenon – The idea and strategy used by businesses where people share a product, such as a Netflix account, with others.
Option Pool – An option pool is when stock is set aside so it can be given to employees.
PACED – An acronym that describes characteristics (Passionate, Ambivert, Calculated Risk Taker, Erudite, and Dedicated) of successful founders.
Subscription Purchase Agreement – The Subscription Purchase Agreement is an official document that outlines when a company is selling shares to an investor at a certain price, and an agreement by the investor to pay that price.
Term Sheet – This is an unofficial document that outlines the material terms and conditions of a business agreement.
Total Addressable Market (TAM) – This relates to the revenue opportunity that is available for profit.
X-Factor – A noteworthy, special quality that makes a product unique and better than the products already on the market.
Documents & Examples for Startup Investors / Entrepreneurs
Clients of Angel Kings’ web design and development group also receive help with the following:
Startup Formation Documents:
Articles of Incorporation
Certificate of Incorporation
Employee Offer Letters
Founder Collaboration Agreement
Startup / Shareholder Investment Documents:
Accredited Investor Verification Form
Investor Rights Agreement
Letter of Intent (Non-Binding)
The JOBS Act - Overview
Shareholder Capitalization Table (Examples)
Stock Purchase Agreement (Binding)
Term Sheet for Startups