VC Cafe

SEPTEMBER 26, 2022

The past year was a wild ride for startups and founders, giving a whole new meaning to the ”rollercoaster” aspect of being an entrepreneur. Patrick Collison , self-made billionaire founder of Stripe. Bill Gates , founder of Microsoft. ValuatIon should be a function of value, not ego. Our goals, their goals.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Lightspeed Venture Partners

OCTOBER 29, 2012

The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. Unsurprisingly, all the sharks passed, based on market size and valuation expectations. The founder, Shelton Wilder (in the middle below), sought to raise $60,000 for 20% of the company to build inventory.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

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. But in the end Robert came back in to join Lori. Daymond offered to be an advisor.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

YoungUpstarts

SEPTEMBER 11, 2013

By Alan Lobock, co-founder, Worthworm. Sometimes the list of challenges may feel never ending – from writing the business plan to finding the right partner – but one of the single most important challenges entrepreneurs face is calculating a realistic, defensible pre-money valuation. . commercial aircraft.

Pre-Money Valuation 133

Pre-Money Valuation Valuation Angel Investor Cofounder 133

Gust

JULY 23, 2014

I’m also allergic to funding “bridges to nowhere”, so I would like to hear your explanation of what you are going to do if no money appears to follow your seed round. If you have a co-founder, see if you can bring him/her along with you; I like to meet the key players.

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

www.paulgraham.com

OCTOBER 23, 2010

And since a startup thatsucceeds ordinarily makes its founders rich, that implies gettingrich is doable too. A lot ofwould-be startup founders think the key to the whole process is theinitial idea, and from that point all you have to do is execute.Venture capitalists know better. Ideally you want between two and four founders.

Startup 105

Startup Cofounder Software Stock 105

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. Every VC has a story where they did the flat round anyways and the founder said, “I really don’t mind!

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. Those are the big three.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. management, founders, angel investors) get any money. I wouldn’t work in this business long if I had a reputation for screwing over other investors to get a deal. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Suppose it raises $2 million at a $6 million pre-money valuation. Expert commentators including David S.

Dilution 162

Dilution Equity Pre-Money Valuation Sweat Equity 162

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Denver Pre-Money Valuation 137

Hunter Walker

AUGUST 7, 2017

Employee options pools, typically created at the point of financings, shouldn’t be treated as haggling over dilution, but rather a strategic resource that will help founders build the best team and, by extension, a more valuable company.

Equity 108

Equity Pre-Money Valuation Option Pool Founder 108

The Startup Lawyer

JUNE 22, 2010

The main drawback is the quirk that the lower your pre-money at Series A, the more equity your angel investor gets. EXAMPLE 1 : If a VC invests $2,000,000 at a $5,000,000 pre-money valuation ($7,000,000 post money ) and an angel investor has a $100,000 convertible note with a 25% discount, the angel investor will own 1.9%

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

Berkonomics

DECEMBER 19, 2013

When will the company run out of money if the development of the enterprise is at a slower rate than expected? How much skin do you and your fellow founders have in the game ? Valuation and fund-raising : How did you arrive at your proposed pre-money valuation? Order all 3 Berkonomics books for $49.95,a

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

Berkonomics

JANUARY 7, 2021

Two: Co-management. So, co-management is the second group to share in the bounty upon a liquidity event. The third group is made of the total number and types of investors, other than the founder(s). It is the old story of “100% of nothing is worth far less than 10% of a large number.”. Three: Outside investors.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Berkonomics

JUNE 12, 2014

So co-management is the second group to share in the bounty upon a liquidity event. Often, if not co-founders, this group is rewarded through issuance of stock options from a pool of available options that usually totals 15-20% of the total company’s equity divided among all employees.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Altgate

MAY 24, 2012

But how well do most other founders do? Even as Facebook prepares to go public, Mark Zuckerberg, the founder and CEO, still owns 28% of his company. As a whole, Zuckerberg, his co-founders, and his former and present employees, own about 55% of Facebook. million, with a valuation of $10 million. Fear vs. Greed.

Pre-Money Valuation 43

Pre-Money Valuation Cofounder Dilution Valuation 43

thestartuplawyer.com

FEBRUARY 24, 2010

He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. You can start by examining every aspect of the co-founder relationship. Because now you have more to lose than just a company and your (or someone else’s) money.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Lessons founders learned. Here’s the “what.”.

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

venturehacks.com

OCTOBER 21, 2010

If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle You have successfully negotiated a $2M investment on a $8M pre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Feld Thoughts

JULY 14, 2015

The term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless. The new money comes in at a pre-money valuation of $100, but includes a complete refresh of founder equity to 40% of the company. Sure – it happens.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Scott Edward Walker

APRIL 9, 2012

As a result, the pendulum has swung dramatically in the founders’ favor, and the issuance of convertible notes for seed financing has never been more prolific. and (iii) what securities laws do founders need to worry about in connection with the issuance of convertible notes? This post was originally published on TechCrunch.]

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.currentlyobsessed.com

MAY 28, 2010

Instead of “We are worth about $5m because we have done XYZ and we need to raise $1m, so let’s sell 20%&# it’s better to think about valuation as an output variable, like “Let’s raise $2mm and sell 33%, our (pre-money) valuation is therefore $4mm.&# For example, liquidation prefs.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

Agile VC

MAY 26, 2011

Many assume it was a cakewalk, based on the success LinkedIn has enjoyed over time and the current stature of our founder/CEO Reid Hoffman (now Chairman). Yes… he was a very successful PayPal exec and previously co-founder & VP Product of SocialNet. But keep in mind at this point Reid’s a first-time CEO.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Startup Lessons Learned

JUNE 19, 2019

Andy Rachleff co-founded the venture capital firm Benchmark Capital in 1995. So we made a pact among the founders that when any of us reached the point that we weren't willing to go 110%, you had to opt out. It was 20 to 30, not 100, because of the dilution from the capital. Then the question becomes, who wants that product?

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159