VC Cafe

JANUARY 30, 2023

SAFE note), shareholder agreements, company formation and governance documents (e.g. articles of incorporation, bylaws, shareholder agreements), employment contracts, patents and trademarks, contracts with providers, SEC filings, licenses Business documents – client contracts, pipeline (can be redacted: i.e

Technical Review 79

Technical Review Due Diligence Cap Table Startup 79

Steve Blank

APRIL 8, 2010

They collected information that justified their assumptions about the problem, opportunity, market size, their solution and competitors and the their team, They rolled up a 5-year sales forecast with assumptions about their revenue model, pricing, sales, marketing, customer acquisition cost, etc. It was an exquisitely crafted plan.

Business Model 332

Business Model Business Plan Customer Cap Table 332

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a cap table simulator to help level the playing field.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Hunter Walker

AUGUST 23, 2023

I can vouch for his genuine optimism Hunter Walk: You got to work with a number of different VCs on your cap table for Anchor. Pre-revenue when Anchor was “just” a product company you were all brilliant iterators and relentless explorers. Who was the best one and why was it Homebrew?

Founder 115

Founder Angel Investor Cap Table Distribution 115

Both Sides of the Table

SEPTEMBER 12, 2013

But as sweet as that success has been (we invested pre-revenue in a small team) today my even more important news was the further expansion of our partner ranks. He had made some structural mistakes in NextMedium that meant the Cap Table and leadership team was a bit wacky. I’ve known Hamet for 5 years. Relationships.

Partner 340

Partner Los Angeles South Africa Cap Table 340

This is going to be BIG.

JANUARY 18, 2024

They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. This is a business and the goal should be to get the best people at every position, regardless of their position on the cap table. Can they lose this money? I get that you want to play baseball but do that on your own time.

.Net 88

.Net Cap Table Startup Technical Review 88

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. However, these are important updates for your board to know. The seed stage is all about traction.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

View from Seed

SEPTEMBER 23, 2019

Previous venture firms’ specific involvement on the cap table should be noted here, though. develop and launch X product, reach Y number of users, generate $Z amount revenue). For example, stating “angels” is fine, and even highlighting notable names can be useful, but it’s unnecessary to share an exhaustive list.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

Pascal's View

JULY 9, 2017

The most serious unintended consequence occurs from “note waterfalls”— converting multiple notes that have multiple valuation caps. Many entrepreneurs lose track of what they have been cooking up in the cap table. They do not recognize that they may have already contractually sold a meaningful portion of equity in their company.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Austin Startup

AUGUST 20, 2017

Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company. I am very surprised when that cool thing actually meets a customer need or drives revenue. Keep the valuations consistent with company progress.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Gust

NOVEMBER 15, 2012

But by far the biggest issue is that the very essence of public markets (and what makes them “public”) is that the SEC mandates an enormous amount of transparency, including complete quarterly financial statements, complete publication of the company’s cap table including all significant shareholders, and so forth.

Seed Stage 131

Seed Stage Hockey Stick Cap Table Liquidation Preference 131

adamac.blogspot.com

MARCH 9, 2010

Maybe the CEO got his cousin from Omaha to be their lawyer or theres been some serious messing around with the cap table. You start hiring a lot of people in sales and marketing to drive revenue, and while you may still be hiring people to do real work, the weight from the top starts to push down on everything else.

Technical Review 41

Technical Review CTO Hire Fractional CTO Startup 41

David Teten

SEPTEMBER 23, 2017

EShares is an increasingly popular tool in our portfolio for tracking private company cap tables. Satisfying LP demands and streamlining the valuation process are primary drivers in those clients’ adoption of Ipreo’s portfolio monitoring and valuation solutions, iLEVEL, iVAL, and Qval. .

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Startup Lessons Learned

JULY 11, 2019

Eventually, I joined Jenny Lefcourt in the initiative called Founders for Change, where we’re amplifying the voices of the founders who are demanding greater representation and diversity not only within their organization, their cap table, and their board rooms, but also in terms of the makeup of all of these organizations.

Founder 68

Founder Lean Venture Capital Cofounder 68

View from Seed

OCTOBER 11, 2022

Simply put, we can flex our check size from $400K to $4M to invest anywhere along the pre-traction to post-revenue spectrum — an abnormality and an advantage in today’s market. In addition, I’m beyond excited to have the flexibility to support promising founders early with the right-sized checks for the stage of their companies.

North America 156

North America San Francisco Cap Table Cofounder 156

Feld Thoughts

AUGUST 12, 2011

Revenues and costs should both be based off of a robust set of assumptions. Anytime the financial model indicates that SayAhh will run out of cash, determine how you will raise capital to ensure liquidity and be sure to properly account for the debt or equity transaction on the balance sheet and Cap Table. historical data).

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

This is going to be BIG.

AUGUST 16, 2012

Foursquare was always about connecting to commercial establishments--not that they're doing tons of revenue yet, but at least you could see where they're going. Twitter has lots of revs, b/c they've been about broadcast since the day they hid @ replies--and when you're a broadcast channel, you're going to get business presence and revenues.

Cap Table 100

Cap Table Sales Cycle Venture Capital Curation 100

Hunter Walker

FEBRUARY 15, 2023

Claire got to experience, and played a large part in, Stripe’s proverbial rocketship, blossoming into thousands of employees, generating billions of dollars in revenue and valuation. While at the company — and especially once she departed — Claire became one of the people I always hoped to add to a cap table or startup board.

Cap Table 101

Cap Table Hiring Viral Valuation 101

David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. But should they? Aligned incentives.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

YoungUpstarts

OCTOBER 7, 2015

Writing the check each year stings a little, but I only have to look at the sheer scope of what we are able to achieve with it, and the revenue that it brings, to understand that we probably wouldn’t have a fast growing business without it. . Same goes for using an accounting professional, even if you are not making money.

Cap Table 100

Cap Table Intellectual Property Salary Bootstrapping 100

Hunter Walker

FEBRUARY 20, 2024

Here the focus is on Pink Stuff, a British cleaning paste, which was #CleanTok mainstreamed to a quadrupling of revenue ($125m annually) and distribution to 55 countries. Many times we’ll never know, but the random products that end up popping because of a TikTok trend are always pretty fascinating anthropological stories.

Founder Vesting 81

Founder Vesting Vesting Cap Table Founder 81

Hippoland

OCTOBER 18, 2018

It’s just really hard to keep growing 30% MoM with large revenue numbers. And on the revenue side, you get your money upfront when people buy tickets or sponsors send you money ahead of the event. With the right conditions, bootstrapped companies can be super high growth, high revenue companies. But, I think that’s false.

Bootstrapping 90

Bootstrapping Cap Table Salary .Net 90

This is going to be BIG.

JUNE 2, 2010

Historically, that was one where the business was clear and there was some initial revenue, even if slight. When you go straight to a Series A round, you forget that your next round needs to be a Series B round.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

This is going to be BIG.

JULY 2, 2015

Yet, as cash friendly as Slack could be--where it could easily have Kickstarter or Craigslist-like cashflow to cap table like ratios, it is still raising hundreds of millions of dollars. What Canary spends to build a product they make back in a clear path to revenue that Pinterest may or may not ever see.

Cap Table 60

Cap Table Viral .Net Acquisition 60

David Teten

NOVEMBER 14, 2019

I wrote recently about Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Since then, I’ve talked with a number of other firms, and greatly expanded my database: Who are the major Revenue-Based (RBI) Investing VCs? Revenue-based investing VC. Venture debt.

SBIC 60

SBIC SBA Cap Table Database 60

This is going to be BIG.

DECEMBER 21, 2017

Nothing seems to apply--you're not a tech company, you bootstrapped your way to millions in revenues before taking on capital, and you sell mostly through brick and mortar. Technically, that's what we called it, but it didn't seem entirely appropriate given that it had already been up and running for years and had millions in revenue.

Cap Table 93

Cap Table Cofounder Valuation .Net 93

Rob Go

FEBRUARY 24, 2014

Big user bases, but tiny revenues. The userbase is also largely international, as is most of the revenue, another ding on the company’s ability to monetize. If this is true, and we believe that the company was on a path towards $20M in revenue last year, that’s a 75X+ revenue multiple.

Cap Table 78

Cap Table Valuation Finance Institutional Investors 78

Both Sides of the Table

JULY 23, 2014

It’s hard to work out the cap table with your peers when one of them has no real intent in fixing the problem. Unprecedented revenue growth + companies staying private longer =. We saw this movie already after the dot-com collapse and the sequel will be no different. Lots of new entrants moving to capture this value =.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Bryce Dot VC

FEBRUARY 6, 2017

And not just a token “ramen” level of profitability: The startup is profitable, with January revenue of 10x its burn rate and sales expected to be in the millions for the quarter. Founders can trade the fundraising treadmill for the freedom, control and ownership that comes with managing your cap table closely.

Cap Table 40

Cap Table Burn Rate Dilution Bootstrapping 40

OnlyOnce

MAY 26, 2022

Do you spend a lot of your time dealing with finance-related issues like fundraising, debt, investors, or cap table questions? Even without a ton of revenue visibility on forward looking sales, good CFOs should have enough of a grip on expenses, cash flow, and order-to-cash dynamics to produce good, rolling 12-month cash forecasts.

Cap Table 62

Cap Table Forecast Finance Metrics 62

Bryce Dot VC

DECEMBER 22, 2016

We don’t know how many rounds this company has raised, how many other VCs are on the cap table, nor how much the founders own. Specifically, this post highlighted, after having analyzed over 5,000 VC backed cap tables, that founder dilution is fairly predictable based on the rounds raised by a given company.

Founder 40

Founder Cap Table Dilution Valuation 40

Spencer Fry

APRIL 17, 2017

If this is the case, you may find yourself starting all over with little revenue (if any), a 1-2 person team that might be consulting on the side to pay bills, and no marketing spend. As a bootstrapper, you have nobody above you on the cap table (note: investors sit above you in their liquidation preference), so it’s your way or the highway.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Both Sides of the Table

FEBRUARY 15, 2016

If you raised $10 million at a $40 million pre-money on a company with limited revenue and if your investors are telling you that they’re concerned about your future because they doubt that outsiders will fund you at your current performance level then I would be more cautious with my burn rate – even if it means slashing costs.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Hippoland

OCTOBER 18, 2018

It’s just really hard to keep growing 30% MoM with large revenue numbers. And on the revenue side, you get your money upfront when people buy tickets or sponsors send you money ahead of the event. With the right conditions, bootstrapped companies can be super high growth, high revenue companies. But, I think that’s false.

Bootstrapping 48

Bootstrapping Cap Table Salary .Net 48

Bryce Dot VC

JANUARY 5, 2015

My partner Tim bootstrapped his business to 9 figures in revenue without taking any outside investment. Is it possible to maintain and independent attitude and ethos with an outside investor on your cap table? And revenue better still. . Those are fine expectations and outcomes, but not the only ones.

San Francisco 40

San Francisco Cap Table Non-Compete Distribution 40

Austin Startup

DECEMBER 10, 2017

I bring this up because I believe we are often trying to teach founders how to do everything in their startups from scratch. We raised significant capital at a high valuation based on his credibility, and he certainly was entitled to call the shots on decisions like that.

Georgia 48

Georgia Startup Incubator Harvest 48

blog.simeonov.com

FEBRUARY 22, 2010

The only way to remove their equity holding in the cap table is by buying them out or through a recapitalization of the company. It can be deferred, with or without interest, to be paid after a financing or once revenues start coming in. There are multiple ways to handle this before the company has cash.

Founder 44

Founder Vesting Agile Startup 44