VC Cafe

OCTOBER 31, 2022

It’s a tough time for a lot of startup founders right now. 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. What is a founder to do? If the answer is yes, then a down round is likely the best path forward.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

Lightspeed Venture Partners

OCTOBER 7, 2012

The founders were very sympathetic; a man, laid off from his job, and his very pregnant wife, who sold their house and investing $150k into the business and are working hard to make a go of it. At this point, the very pregnant cofounder was weeping. He had been at it for 6 months and had no sales or distribution lined up yet.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). The liquidation preference would not apply in this situation, and any distribution to stockholders would trigger the dividend preference. Co-sale rights. Drag-along.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

MAY 30, 2018

What was the post money on your last round (and how much capital have you raised)? It’s not uncommon for a VC to ask you how much capital you’ve raised and what the post-money valuation was on your last round. Many VCs will have a distribution curve where they’ll do a small number of early-stage deals (say $1.5–3

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Feld Thoughts

APRIL 21, 2016

. “Many Unicorn founders and CEOs have never experienced a difficult fundraising environment — they have only known success. Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees.

Marketing 70

Marketing Down Round Startup IRR 70

Scalable Startup

FEBRUARY 1, 2013

So these companies that are kind of for — in the sort of mechanical term, distributed workforces and outsource work being run online. Alexia Tsotsis: Are you seeing down rounds because the NASDAQ is down? Marc Andreessen: No, we have not seen down rounds yet. He is an active member of the blogging community.

Software Review 22

Software Review Startup Venture Capital Stock 22