View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1. Or, in the case of a convertible note, they’ll explicitly state a valuation cap.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Both Sides of the Table

MARCH 6, 2011

I was saying that I was happy it was all out in the open because I felt at least everybody could now understand the issues & opportunities from the perspectives of angels, entrepreneurs and VCs. Jody didn’t exactly have an easy time fund raising because he’s not one of the prototypical Silicon Valley funded entrepreneurs.

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

Both Sides of the Table

MAY 30, 2018

One of the hardest things about the fund-raising process for entrepreneurs is that you’re trying to raise money from people who have “asymmetric information.” As an entrepreneur it can feel as intimidating as going to buy a car where the dealer knows the price of every make & model of a car and you’re guessing at how much to pay.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Both Sides of the Table

OCTOBER 14, 2009

And what I mostly want to do is make entrepreneurs aware that they have nearly as much power as a real board member so you may have more people making decisions at board meeting than you thought you would. This is the real board position that entrepreneurs should concern themselves with. What exactly is a board observer? in a company.

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

Hippoland

APRIL 9, 2017

Winning over investors is not just about showing traction / progress (although that is a big component to getting investors onboard). Fundamentally, investors have to trust you in order to invest in you. And, I think most investors will give entrepreneurs the benefit of the doubt…until they cannot.

Cofounder 48

Cofounder Early Stage Software Review Naming 48

David Teten

SEPTEMBER 6, 2015

Entrepreneurs today expect more than just capital from their investors. Teten: The new generation of entrepreneurs is asking more from their investors than just money. What do they offer entrepreneurs that independent VCs cannot, and how does that position them uniquely in the innovation economy?

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

Feld Thoughts

MAY 3, 2010

In many of them I get asked similar questions, including the inevitable “what makes a great entrepreneur?” The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. They don’t try to engage you in a phone conversation about the great market they are going after.

Product 148

Product Cofounder Lead Investor Software 148

Genuine VC

JULY 30, 2012

Sharing these expectations early in potential lead investor discussions fundamentally qualifies the conversations, but it also runs the risk of prematurely losing a potential financing partner or reducing options to maximize a financing process outcome. Above market. But, also by definition, that just can’t be the case.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndication 136

Both Sides of the Table

MAY 13, 2018

If you’re raising a round where a new lead investor would invest $5 million the VC fund must have no less than $100 million and if you’re looking for them to write $15–20 million as the lead their fund realistically should be at least $400 million. Remember, I was an entrepreneur for 10 years before a VC).

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

www.seriesseed.com

DECEMBER 9, 2012

  In my opinion, the reason that capped convertible debt is the current market leader is that entrepreneurs have been conditioned over time to believe that convertible debt is (a) faster (b) cheaper and (c) better for them than equity investment.  You can follow this conversation by subscribing to the comment feed for this post.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Version One Ventures

JANUARY 28, 2013

Since CBInsights released its report in December, conversations have accelerated about the pending “Series A Crunch.” I recently had lunch with an entrepreneur who asked what he should do. While experts may differ on the implications or severity of the Series A Crunch, the numbers provided by CBInsights are straightforward.

Burn Rate 140

Burn Rate San Francisco Vesting Finance 140

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. If you think the other investors will be super value-added – no problem! For me it’s clear.

Pre-Money Valuation 150

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

This is going to be BIG.

JANUARY 3, 2021

The other day, my wife Aja Singer and I were having a conversation about being more intentional with our time, especially when it comes to working. What we found was that doing this exercise together created the space for really productive conversations about how we spend our time. I’m pretty lucky because I control most of my time.

Management 120

Management Portfolio LP Social Media 120

Gust

OCTOBER 26, 2011

This is the norm for West Coast deals, but it’s often the case in dealing with East Coast investors (more commonly for VC financing rounds rather than angel seed rounds) that the lead investor wants its lawyers to draft the documents. See discussion of amendments below.) merger or acquisition).

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

Rob Go

FEBRUARY 3, 2014

What’s interesting is that this entrepreneur has raised $30M+ in venture capital before and knows the VC process intimately, but remarked to me midway through “this process is completely different from every other fundraise I’ve been a part of.”. This is kind of the equivalent of “I’m in as long as you have a lead” but sounds a lot better.

Term Sheet 73

Term Sheet Due Diligence Valuation Seed Stage 73

Rob Go

JULY 17, 2014

As former operators and product-oriented entrepreneurs, Dave, Lee, and I tend to think of our firm as a startup company and our approach to investing as our product. We’ve often explained to entrepreneurs that the second fund of a venture firm is very much like the series A for an early stage company. This leads to the second factor.

Seed Stage 69

Seed Stage Early Stage Due Diligence Liquidity Event 69

Up and Running

JANUARY 25, 2017

I enjoy sharing my experiences as an entrepreneur with friends and family. As a starving entrepreneur with a dream, you can’t afford to skip any opportunity to secure funding. That feeling of desperation and tireless persistence brings back memories of one of my most impactful life experiences as a budding entrepreneur.

Venture Capital 60

Venture Capital Cofounder Security Partner 60

Austin Startup

MARCH 4, 2019

Steve Kelly, Lead Investor; Godfrey Nazareth, President & CEO; and Matthew Maltese PhD, co-founder and Chief Innovation Officer The Forrest Four-Cast: March 3, 2019 Fifty diverse startups will aim to impress a panel of judges and a live audience with their skills, creativity and innovation at SXSW Pitch Presented by Cyndx.

Startup 79

Startup Philadelphia Cofounder Distribution 79

The Startup Lawyer

JANUARY 6, 2011

I’ve known Mike for a few years now and during the conversation I asked if we could turn the chat into a formal interview for this blog. We also tend to focus on repeat entrepreneurs but are not opposed to funding first time founders who have significant domain expertise. I had the chance to chat with Mike Brown Jr.,

Early Stage 58

Early Stage LP Later Stage Balance Sheet 58

Scott Edward Walker

JUNE 9, 2019

Pro rata rights are relatively standard and non-controversial; however, founders should try to limit such rights solely to “Major Investors” (which is typically defined to include only those investors that will own a substantial number of shares – e.g., a lead investor).

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

This is going to be BIG.

FEBRUARY 17, 2016

So yeah, let's have *that* conversation. If you're a startup investor, you have to take risk somewhere. Some of the best intros I've gotten have been from entrepreneurs that I didn't actually fund, but who felt like they walked away with enough thoughtful feedback to recommend me to others. No risk, no return.

Chicago 60

Chicago Lead Investor Security Government 60

Hippoland

JANUARY 4, 2017

Usually, an equity round is kicked off by a “lead investor”. Typically, this lead investor decides the terms of the round and also invests the majority of the money that will go into your company. That lead investor will also usually help you fill out the remainder of your round with other investors.

Convertible Security 48

Convertible Security Equity Security Silicon Valley 48

SoCal CTO

SEPTEMBER 8, 2010

thought it would be helpful to put some of my thoughts into a blog post and hopefully spur some conversation in the comments and over email. He blogs to 10,000 web entrepreneurs at Software by Rob and co-hosts the podcast Startups for the Rest of Us. was once a wannabe entrepreneur, and then I was a first-timer.

Startup 191

Startup CTO Hire Cofounder Venture Capital 191

David Teten

JULY 12, 2017

Steve Brotma n of Alpha observes, “In general, for any co-investor, the higher the quality of the institutional VC firm lead for the new round and the more reasonable the valuation, the better the odds of a coinvestment. Hence, if Sequoia is the lead and the valuation is reasonable, it’s near 100% chance.

Syndicate 60

Syndicate Syndication Institutional Investors LP 60

Austin Startup

JUNE 4, 2017

Lead Investor : The person or firm who defines the terms of the round. Even as an experienced entrepreneur I attend classes there occasionally and I actively leveraged the office hours as well as the discounts and freebies. This is not defined by check size or by being the first person to commit. How I Raised A $1.5M

Austin 54

Austin Institutional Investors Angel Groups Deal Flow 54

Both Sides of the Table

FEBRUARY 15, 2016

This has led VC & entrepreneur bloggers alike to similar conclusions: start raising capital early and be careful about having too high of a burn rate because that lessens the amount of runway you have until you need more cash. I’m surprised how few entrepreneurs have this open conversation with their investors.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Rob Go

AUGUST 9, 2016

I’m often surprised that entrepreneurs don’t do the same with anywhere near the same intensity and diligence. Think of it this way, an investor may invest in 1-3 deals a year, and build a portfolio of 7-12 active companies that they are point on at any given time. This is not always easy to do.

Term Sheet 28

Term Sheet Due Diligence Lead Investor Portfolio 28

mashable.com

NOVEMBER 2, 2011

AngelList is brilliantly designed to make it easy for investors to write checks to entrepreneurs. Naval and Nivi , the founders of AngelList, took the very best social mechanics from Facebook , Twitter and LinkedIn to create a “social proof” that ultimately makes investors comfortable writing checks.

Social Media 80

Social Media Startup Angel Investor RSS 80

View from Seed

FEBRUARY 23, 2021

The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor. At this point, the investor and the entrepreneur work together to develop their perfect list of potential partners, and then do targeted outreach to try to bring this investor into the round.

Syndicate 207

Syndicate Syndication Term Sheet Cofounder 207

View from Seed

JANUARY 11, 2021

As high-conviction, seed stage investors, we are inherently relationship-driven, and we value meeting exceptional founders face-to-face. With the onset of COVID-19, we, along with the broader ecosystem of venture capitalists and entrepreneurs, have been pushed to rapidly adapt, forge connections, and do our jobs remotely.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

Startup Lessons Learned

JUNE 9, 2020

In the first part of our conversation, we talk about the chronology of what has happened to Airbnb, the impacts the pandemic has had on their business and the emergency measures the company was required to take. You can listen to our conversation on Apple podcasts , Google podcasts , or wherever you like to download. I am Eric Ries.

Silicon Valley 60

Silicon Valley Hosting Cofounder Employee 60

Agile VC

JANUARY 12, 2012

Even the best entrepreneurs often hear “no” from potential investors. Good investors try to be clear in terms of what they look for in terms of progress and milestones of the startups they invest in. Im a former Silicon Valley entrepreneur turned East Coast VC. How To Think About The Future. Author howerl.

Seed Stage 100

Seed Stage Silicon Valley Syndication Syndicate 100

Reid Hoffman

JANUARY 26, 2021

The primary goal of this conversation was to explain how and why a great startup board can be a powerful tool to help the CEO make the company successful. Selecting your investor board members should be a careful and thoughtful process, even if that means it requires more work. Or when should a board member be fired?

Startup 36

Startup Equity Early Stage Green 36

Startup Lessons Learned

JULY 2, 2020

She believed so deeply in Curative's new mission and the science behind it that she went out and pitched investors on a company she didn't even work for--and got results. You can listen to our conversation on Apple , Google, or wherever you like to download podcasts. Here's my conversation with Curative.

Curation 60

Curation Government Los Angeles Partner 60