If you’ve been following along with me over the course of these 8 weeks, you’ll know that understanding structuring was a little challenging for me. Well, now I can add another topic to the “misunderstood” bin! You see, initially I was under the impression (thinking like an entrepreneur) that business longevity was the name of the game. Looking at other small business owners around, I assumed that those who gain the fanbase also gain durability and the permanence that comes along with it (think your favorite hometown restaurant that has been around for years with the same owners). However, I failed to recognize that having an exit strategy that is indeed lucrative, is in many cases one of the best ways to distinguish whether a venture has truly been successful.


     As Amis and Stevenson noted in their book Winning Angels, “in some cases a company will develop a strong following which is attractive to an industry competitor or a strategic partner. The brand name and customer base will have value in and of themselves.” This was easier to understand after reading my fellow colleague’s blog on this exact same topic. Shout out to Elaina Hamilton for further elucidating this concept for me. In her blog, she examined the natural hair beauty company, Carol’s Daughter, whose owner said it was always her intention from the beginning to sell the organization. As Andrew Blair stated in the book, “the exit has to be engineered as carefully as the deal itself.” When Lisa Price initially started the company in Brooklyn, New York in 1993, she knew then that her end goal would be to sell the business. Although she probably didn’t know to whom, through creating a valuable company, with notable investors (she was featured on Oprah where she gained notable financiers such as Will and Jada Pinkett Smit, Jay-Z, Tommy and Thalia Mottola, and former Interscope Records Chief Steve Stoute just to name a few) and outstanding products; Price was able to sell the organization to L’Oreal USA where it remains profitable and is surely still adding shmoney to Price’s bank accounts.


     Obviously, Price like many other entrepreneurs had an idea of what she wanted from her business from its inception. But now everyone is this ingenious. Amis and Stevenson suggest that investors, “help the entrepreneur to begin identifying opportunities for life after their company.” With this in mind, these individuals can plan for their exit and not be disheartened about the thought of someone else potentially becoming the CEO and subsequently managing the business altogether. Another story which helped me to understand how consequential selling can be was a Forbes article which highlights a company Ander Michelena and his associate Jon Uriarte started after noting a need in the market for a ticket selling business in Spain and Latin America. These individuals came up with a company that would later be acquired by StubHub for some $190 million dollars (a 70x plus multiple for the investors involved). As Forbes revealed, “With that kind of cash, you can now choose to do other things – start a company with a much bigger exit or become an investor yourself.” 


     In any event, as this section closes it provided an outstanding quote from one of my favorites Mr. JFK. Regardless of your aspirations as an entrepreneur or investor “only those who dare to fail greatly will ever succeed greatly.” I think I can now remove this topic from the “misunderstood” bin.



Amis, D., & Stevenson, H. H. (2001). Winning angels: The Seven Fundamentals of Early-Stage Investing. London: Financial Times Prentice Hall.

Cremades, A. (2018, November 07). This Entrepreneur Sold His Company For $190 Million After Leaving His Corporate Career. Retrieved June 28, 2020, from https://www.forbes.com/sites/alejandrocremades/2018/11/06/this-entrepreneur-sold-his-company-for-190-million-after-leaving-his-corporate-career/

Hamilton, E. (2020, June 26). Winning Angels: Harvesting. Retrieved June 28, 2020, from http://elainahamilton.com/category/ent-640-50/

P. (2020, June 20). Carol’s Daughter. Retrieved June 28, 2020, from https://en.m.wikipedia.org/wiki/Carol’s_Daughter


     In reading the section aptly named, supporting, in Winning Angels by David Amis and Howard Stevenson, I have come to understand yet another critical component of the 7 fundamentals of early stage investing. Supporting is just what you would deem it to be. Although the section delves into further aspects of support, at its foundation, it is how the angel investor will collaborate with the entrepreneur to ensure a successful venture. While some investors prefer to have more of a hands-on approach and assist with everything from early stage decisions to the hiring and subsequent firing of key positions, there are those who would rather supply the funds and simply sit back and wait on their return. Additionally, somewhere in the middle are the individuals who desire more of a coaching role to better facilitate the entrepreneur with the establishment and routine maintenance of the business. As Amis and Stevenson have noted, “angel investors follow participation roles that are a combination of the needs and wants of the entrepreneur, the company, and themselves.” After learning about the various functions that investors can play, I would rather have someone with more of a coaching responsibility to assist me in making decisions that can ultimately make or break the organization. Winning Angels notes, “the best two ways to figure out how to contribute are to ask the entrepreneur what they want and to do a lot of deals so you (the investor) know what they need.”


     Further along in the supporting section, an excerpt is taken from David Berkus’ book Better than Money, where he remarks, “experience alone is a powerful but very inefficient teacher. She tends to give the test first, then teach the lessons later…It usually takes more than one bad break to bring down a business.” If investors and entrepreneurs are continually monitoring the progress or lack thereof, they can make strategic assumptions that can be used to analyze the sustainability of the organization. Amis and Stevenson observe that investors should, “schedule a meeting each month with the entrepreneurs, usually for a half-day or so. At this meeting, all aspects of the company are examined, plans are re-assessed and modified, and opportunities to support the entrepreneur are identified.” With this transparency, the business is better equipped to outlive many of the initial hurdles and continue its quest for success.


     Despite the fact that entrepreneurs and investors alike will characteristically operate with the best intentions for the organization in mind, there is always the possibility of failure. Amis and Stevenson suggest, “entrepreneurs should handle their potential failure as they would any other potentiality in their business, that is professionally and with contingency plans. Handling failure right will maintain their reputations and many of the investor relationships.” With this methodology in mind, entrepreneurs can, “live to fight another day.” As David Berkus so eloquently puts it when he analogizes landing a plan to failing, essentially, he states, “the only thing to remember then is that any landing you can walk away from is a good landing, cause you’ll live to fly again tomorrow.”


Rest in Peace John Witherspoon


Amis, D., & Stevenson, H. H. (2001). Winning angels: The Seven Fundamentals of Early-Stage Investing.London: Financial Times Prentice Hall.

Berkus, D., & Kelley, B. (1994). Better than Money!: Resource Capital Concepts to Make Your Software Business Fly High! Santa Barbara, CA, CA: Synergy Communications Press.

K [Kyle]. (2012, May 18). Friday Gun Talk. https://www.youtube.com/watch?v=MFwz2ESjfBQ.



Let us never negotiate out of fear. But let us never fear to negotiate.”-John Fitzgerald Kennedy

     When reading through the chapters associated with negotiating in Winning Angels by Amis and Stevenson, I was reminded of this extraordinary quote from Kennedy which sets the precedent for me on the art of negotiations. As Amis and Stevenson put it, “the whole idea of negotiation is that both sides be better off after making the deal.” And, I couldn’t agree more. For me, whether undertaking the role as the entrepreneur or the investor, it is critical to understand every aspect of the deal so that my partners feel they are being legitimately compensated accordingly for their time, efforts and any money they’ve invested in the venture. I want to ensure that anyone who is associated feels that they are treated impartially and will subsequently want to do business should future opportunities arise. That’s the way it’s supposed to be, right?

     Although I understand that emotions have to be separated from business, I will always put a certain degree of feelings into anything I’m doing because I am passionate about my work. Because of this I want to assure my partners that their voices will also be heard, understood, and utilized in the decision-making process. Amis and Stevenson assert, “Just as you seek to advance the full set of your interests, the other side(s) will be doing the exact same thing. You should make assessing the full set of their interests a central part of your negotiation strategy.” They also go on further to note that in most cases, “A way to move stalled negotiations forward is to look behind conflicting positions to understand deeper interests.” In my opinion, when business partners are willing to go the extra mile to satisfy their colleagues it makes for a more gratifying experience once everyone’s interests are recognized, examined, and aligned to see how they can be structured to form the best deal for the venture to be viable, not just in the present but the future as well.

     Amis and Stevenson note, “By giving the entrepreneur their own proposed terms, it should be hard for them to regret it later.” They further expound on this idea perceiving that, “Connecting ownership to performance is a productive way to let them have their pie if they can do a great job baking it.” Although these business relationships should be built on a foundation of trust and integrity, as my colleague Trip Cogburn pointed out, this is not always a possibility. When business partners begin to collaborate on a deal, if they are unfamiliar with each other, this trust has to be earned and this task will not be completed in a day (that saying about Rome is fitting here). With that in mind it is crucial to negotiate intuitively and intelligently to build this relationship and consequently garner the trust that will be essential in making the important decisions down the road that will propel the organization to new levels of success. Amis and Stevenson remind their audience that, “aggressive negotiating does not foster trust.”

     In the event the negotiations cannot be completed objectively, hiring an attorney is always a judicious way to guarantee that the interests of everyone involved are protected and endorsed. If for some reason, the entrepreneur or investor is against this approach then you probably shouldn’t do business with them in the first place. I’ll leave you with yet another sound quote from my ole’ friend John (love this song), “You cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.” And honestly, who would want to?


A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/804139-we-cannot-negotiate-with-people-who-say-what-s-mine-is

A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/24920-let-us-never-negotiate-out-of-fear-but-let-us
Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.


     Out of each of the lessons we have studied throughout the course in our supplementary reading material Winning Angels by Amis and Stevenson, structuring is probably the most challenging for me to comprehend thus far. While it was somewhat easy to understand sourcing and evaluating; a tad bit more difficult to grasp the process of valuing; structuring is a whole nother’ beast!!! At the very least, structuring is how entrepreneurs and investors arrange the investment deal so that both parties (in some cases) can recoup the fees that have been poured into a venture. Sounds easy enough, right? Well, not so fast smarty-pants!!!

     Although I don’t have any prior knowledge of structuring deals, I know that one day (soon) I will be in a position to be able to do such things and I want to make sure that I’m not being handed the short end of the stick. As Bill Sahlman states in the book, “With respect to the whole deal valuing, negotiation and structuring you have to have had a lot of experience of good and bad deals to know what’s really important in the transaction.” As a novice, I would only hope to have knowledgeable and trustworthy investors like Sahlman to ensure that I’m making the right decisions not only for myself but also for the business and those who have invested their capital to back my dreams. As Amis and Stevenson put it, “Winning investors make sure the entrepreneur is going in the right direction.” Following the advice of other angel investors, the authors suggest making a monthly report to provide transparency and accountability an integral part of the investment agreement so that stakeholders are consistently aware of what’s going on with the organization. While investors may not have the time to hold the entrepreneur’s hand through every single decision, they can be made aware of these decisions through monthly reporting to better ascertain how the company is progressing and what may need to transpire to ensure future successes.

     Whereas structuring seems easy enough, it’s when you get into how the financiers would like to receive an ownership stake that things start to get tricky. For instance there is common stock and preferred stock (click here) for a better understanding of both! And, as if that’s not confusing enough, there are even convertible preferred stocks (click here, again)! Not to say, I told you so…but I told you.

     Amis and Stevenson advise that, “in structuring, simplicity is best to maximize the chances of entrepreneurial success.” They go on further to expound that, “complicated structures create more work and less flexibility down the road.” It is certainly important to note that here is an area where seasoned investors can unquestionably take advantage of inexperienced entrepreneurs. While we have previously discussed how dishonest entrepreneurs can prove detrimental to an organization, it is critical to recognize that acquisitive investors are equally as damaging. As angel investor Berkus (whom I’m starting to like more and more) states, “In my structures, I have kept them clean because I want to have a trust built between the entrepreneur and me. So I almost always start my investment strategy with a common stock investment and usually try to form it with the founders at founders value….”

     Whether being financed or in a position to invest, I certainly want to model after my man Berkus. I mean surely there’s a way to find common ground so that both parties can feel that they are not being conned. As we’ve discussed previously, this all goes back to the initial relationships that have to be established with trust and confidence in all who are partaking in the deal. Additionally, clear expectations of what each member should bring to the table need to be asserted as well as what each stakeholder will anticipate in return for their time, efforts, and in most cases their dough!



     Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

    Hayes, A. (2020, February 25). Preferred vs. Common Stock: What’s the Difference? Retrieved June 10, 2020, from https://www.investopedia.com/ask/answers/difference-between-preferred-stock-and-common-stock/

     Mitchell, C. (2019, June 25). Convertible Preferred Stock Definition and Example. Retrieved June 10, 2020, from https://www.investopedia.com/terms/c/convertiblepreferredstock.aspHayes, A. (2020, February 25). Preferred vs. Common Stock: What’s the Difference? Retrieved June 10, 2020, from https://www.investopedia.com/ask/answers/difference-between-preferred-stock-and-common-stock/


     Prior to this section on valuing, I had very little knowledge about what computations were performed to determine the exact value of an organization. I mean, I know these figures weren’t merely pulled from the sky, but I genuinely had no idea regarding how these calculations were completed. In Winning Angels by Amis and Stevenson, there is a section devoted to explaining several methods utilized to capture the value of a business so that investors can better ascertain the investment that needs to be made initially as well as the returns that should be anticipated in the future.

     Amis and Stevenson note that there are several techniques that are employed to assess the value of a business. My particular favorite was the Berkus method, where Dave Berkus has created his own methodology for evaluating start-ups that he has applied since 1993. Having a consistent approach, I think is key, and will allow the investor a more complete overview of what to potentially expect from the venture financially. As Amis and Stevenson note, Berkus “identifies a clear relationship between price and tangible aspects of the opportunity” to provide a reasonable start-up valuation. For example, for a sound idea, prototype, quality management team, quality board and roll-out sales, each respective category would receive a dollar amount. These amounts would range from $0-2 million; and, when totaled together gives the entrepreneur and future investors a practical figure of what the deal/organization is worth. While there are certainly “cons” to this process such as the semantics behind “quality” as well as the definition of each element, Berkus as well as Amis and Stevenson note that it is a reliable appraisal technique that generally closely calculates value.

     One particular valuation technique that I also liked from this section was the idea of the Pre-VC method. Here, the entrepreneur and the investor avoid all value negotiations and strictly focuses on completing the deal at hand. While this did sound somewhat bizarre, it also reminded me that if these individuals are indeed in a professional relationship where trust and integrity are paramount, then the value of the business and any further negotiations about its worth can undoubtedly be held off until these calculations can be accomplished in a more accurate manner by a professional. As Amis and Stevenson pointed out, “many winning investors focus more on finding good people to work with, letting the more involved contracts and negotiations come later with additional rounds of capital. They believe that the first focus should be on their relationship with the entrepreneur, and not what they can get out of him.” Here, I think back to an example from the book about Jeff Bezos attempting to raise capital for his start-up Amazon. Though many believed that Amazon was not worth the initial investment and subsequently decided not to capitalize on the deal, Amazon has since gone on to be worth $160.47 billion and, “The e-commerce giant has come a long way from its inception as an online bookseller to a retail giant that is disrupting everything from the assumed supremacy of big-box stores like Walmart to grocery store and delivery service models.” Not to mention, Bezos is now the wealthiest man in the world with a net worth of 113 billion, even after a divorce where he transferred $36 billion worth of Amazon stock to his ex-wife. Yes, billion with a B!!!

     So, what are your thoughts? What methods would you use to “value” a deal/organization? Be careful…I mean, you wouldn’t want to pass up on the next Bezos, now would you?



     Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

     Anderson, J. (2019, November 19). How Much Is Amazon Worth? Retrieved June 03, 2020, from https://www.gobankingrates.com/money/business/how-much-is-amazon-worth/

     Forbes The Richest in 2020. (2020, March 18). Retrieved June 03, 2020, from https://www.forbes.com/billionaires/

     In the second portion of Winning Angels by David Amis and Howard Stevenson the authors have moved from sourcing to examine another equally critical component in the angel’s investing chain…This time we’re discussing evaluating. Evaluating is just what you would suspect, it’s where the investors are able to further assess a deal to determine whether it would be a worthwhile investment for themselves and/or their syndicate. As my colleague Dustin Brown pointed out in his blog post on sourcing, the reality television show Shark Tank is a popular illustration of what Amis and Stevenson are exploring in Winning Angels. While the sharks are certainly able to source thousands of deals (As of May 19th, 2019 there have been 222 episodes, 895 pitches, 499 deals, $143.8 million worth of invested capital, and nearly $1 billion in company valuations! Click here for a more in depth look into the analytics associated with the show), it is notable to discuss that after these deals are “sourced,” they have to be evaluated further to determine if the organization in question has a product that can be monetized, scaled, and will provide a significant ROI for those interested in assisting with the risks associated with financing.

     While watching Shark Tank, I am oftentimes on edge as if I’m presenting the deal myself in front of the sharks! I cringe every time I hear a shark say the infamous words, “And for that reason…I’m out.” But, these chapters on evaluating have enlightened me and provided me with a more understanding perspective as it pertains to why exactly these sharks step away from the deal. As Amis and Stevenson put it, “given the potential time drain, the best angel investors are careful and strategic in their approach to evaluation.” This makes total sense and can be seen in every instance when the sharks collect information about a deal and entertain the prospect of financing entrepreneurs in their newly established ventures. If the deal does not correspond to an industry where the sharks have experience, they will typically give adequate reasoning and respectfully bow out to allow their associates the opportunity to formulate an arrangement with the entrepreneur without any further interference. Here, it does get interesting when more than one shark offers capital as well as their expertise since, “the quality of the stakeholders says a lot about the quality of the investment opportunity, as well as the likelihood that it will meet future challenges successfully.” For example, on Shark Tank, Mark Cuban is undeniably the most prolific dealmaker with 151 deals completed in the first 10 seasons. He is also undoubtedly one of the most well-known with his ties to several successful ventures, most notably being the owner of the Dallas Mavericks! Unquestionably having Cuban’s stamp of approval as well as business expertise to validate and further a deal says oodles for the budding entrepreneur looking to pave their path to success.

     Most importantly when it comes to evaluating, Amis and Sims note that, “rather than judge entrepreneurs or their business plans as winners or losers, it is most productive to look at the investment opportunity as an interconnected combination of 4 elements: people, context, business opportunity, and the deal. The right combination, which is often manageable means a high-potential opportunity. A bad combination, or the lack of any single element, is a recipe for failure.”


     Amis, D., & Stevenson, H. H. (2001). Winning angels: the seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.
     Crockett, Z. (2019, May 19). Shark Tank deep dive: A data analysis of all 10 seasons. Retrieved May 31, 2020, from https://thehustle.co/shark-tank-data-analysis-10-seasons/