VC Cafe
OCTOBER 31, 2022
Many companies are now having to resort to tough measures in order to stay afloat, including layoffs, down rounds and tough terms from current investors. If the answer is yes, then a down round is likely the best path forward. Why you shouldn’t worry about raising a down round ( source ).
Both Sides of the Table
JUNE 22, 2011
New investors hate down rounds. Those with strong business models suddenly stand out when the tide goes out. They will enter the “triage phase&# of the market where they figure out which of their existing deals will survive. Many good companies will not get funded. Vultures will start circling looking for deals.
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VC Cafe
FEBRUARY 27, 2024
Carta reports that 20% of the rounds in 2023 were down rounds, but I believe the actual number is much higher. For that and other reasons (like cash preservation) VCs moved to focus more on earlier stage, and many funds that typically invest in A started deploying more into seed rounds.
ReadWriteStart
JUNE 1, 2020
In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. For these businesses, it is imperative to get funding from the start without which the company cannot be set up. It might be tempting to do so.
crowdSPRING Blog
MAY 10, 2013
It’s difficult to fake corporate culture | Business Insider – [link]. How a 1-Page Business Model Will – and Won’t–Help Your Lean Startup | by Kevin Dewalt – [link]. The critical metrics for each stage of your SaaS business | by Lars Lofrgren – [link]. They can make your business better.
Steve Blank
APRIL 26, 2022
For the common shareholders (employees, advisors, and previous investors), a cram down is a big middle finger, as it comes with reverse split – meaning your common shares are now worth 1/10th, 1/100th or even 1/1000th of their previous value. (A A cram down is different than a down round.
Lightspeed Venture Partners
OCTOBER 7, 2012
As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. Some partial answers came up, including spending on a new version of the product with additional features, and excessively high inventories relative to actual sales in holiday 2011.
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