Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. It’s worth reading his post to understand the problem. In the old days VCs funded off of a “pre-money” valuation. I can boil it down to how this tension plays out.

Pre-Money Valuation 150

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

Agile VC

DECEMBER 6, 2012

A little more inside baseball from the VC biz… why VC’s rarely make “crossover” investments, with capital from multiple funds the VC firm manages invested in a single startup (see note 1). If Acme Ventures III, LP invests in Startup X then typically Acme Ventures IV, LP would not.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Both Sides of the Table

SEPTEMBER 28, 2014

I was reading Danielle Morrill’s blog post today on whether one’s “ Startup Burn Rate is Normal. I love how transparently Danielle lives her startup (& encourages other to join in) because it provides much needed transparency to other startups. ” I highly recommend reading it.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. I continue to contend there are potentially four stages of seed — pre, seed, second/extension, and post — and that as a manager I designed my fund to be able cut a meaningful check at any phase.

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. Much of it is very short term focused and, like a giant tractor beam, draws the conversation into a very short time horizon (as in days or weeks). Go read it now – I’ll wait.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

ithacaVC

JANUARY 24, 2013

And let’s assume that the debt has a 20% conversion discount. I am going to ignore any valuation cap feature. Series A premoney valuation negotiated to be $3mm. . $62,000 of convertible debt outstanding with $13,700 of aggregate interest accumulated, which also converts as well in the qualifying round.

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. I’m surprised how few entrepreneurs have this open conversation with their investors. In fact, most entrepreneurs I know don’t ask – why is that? .”).

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. At the end of the day Kayak’s playing a key role in the online travel process, but it appears more of the revenue comes from filling top of the conversion funnel rather than the middle or bottom of it. Post-money valuation probably no higher than $12M (2).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Professor VC

FEBRUARY 12, 2015

In the episode, Kristy Kruger talks about picturing unicorns roaming the planes in Africa as a kid and being at a party many years later when the topic of conversation turned to endangered species: It was about a group of five to seven people, kind of standing around the keg, just talking. Is this Boom for Real?" igthwghjg2q2g8hu4).

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

Both Sides of the Table

SEPTEMBER 18, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. These are all real conversations. What if when you have that conversation you don’t agree?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM 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.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40