View from Seed

OCTOBER 24, 2019

The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. No good investor would want the founder/CEO of a company to have insufficient ownership by the series A, and every founder I know is sensitive to taking too much dilution.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. People all across the value chain have taken notice including Limited Partners who are the people who invest in VC funds in the first place. Thus begins the dance. Why prorata rights are now sought out by LPs.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

SEPTEMBER 29, 2009

The other investors around the table didn’t agree nor did the “independent” board members who were willing to turn a blind eye to capital inefficiency since they didn’t have any economic interests that would be diluted by continued fund raising to support a capitally inefficient management team. and trying to raise their next fund.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

The Next Web

OCTOBER 7, 2013

Every time a startup raises capital, all common shareholders are diluted. In a CTO Salary and Equity trends report by Safire Partners, it finds non-founder equity compensation to settle out below 2 percent. All of the estimates displayed above are figures prior to any dilution. percent to 3 percent range for engineer #1s.

Engineer 129

Engineer Dilution Option Pool Vesting 129

VC Cafe

FEBRUARY 27, 2024

While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. To reduce the impact of dilution, the expectation is that startup valuation should more or less double between the pre-seed to the seed, and seed to series A (ideally backed by reasonable traction/ revenue multiples).

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Both Sides of the Table

FEBRUARY 20, 2019

just having a sparring partner with a vested interest in your success can be useful. A-round venture capital firms will almost certainly make it a requirement that they get a board seat upon financing. The Limited Partners (LPs) who back funds don’t expect their dollars to be passive. If you get a smart person on the board?—?just

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Genuine VC

JULY 19, 2010

Micro VCs will continue to come in many flavors with slightly different strategies, but there are a few distinctive defining characteristics: On a per partner basis, each investor is investing less than $25M in any given fund. The capital deployment velocity is notably higher than a traditional 1-2 investment per partner per year.

Seed Stage 175

Seed Stage Technical Review Dilution Offshore 175

Up and Running

JULY 2, 2014

Picking the right attorney in your startup is as important as picking the right business partner. My business partner and I made many mistakes in our first tech startup, and so many of them were the result of choosing a lawyer who was a terrible fit. My business partner and I were elated. ownership and never dilute.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

The Next Web

NOVEMBER 20, 2013

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. So, a fair split, would be closer to 60/40 in favor of the funding founder, when diluted for the cash. To me, that is no different than financing the business.

Cofounder 136

Cofounder Equity Founder Seed Stage 136

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

AUGUST 14, 2017

Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. ICOs certainly have a place in startup financing. In fact, as one Twitter commenter observed to what do board do, “Often, not much.” That’s true. The administrative work we actually do at board meetings?

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. price based anti-dilution). Then they laugh at you. Then they fight you. Then you win.”

Finance 58

Finance Term Sheet Equity Aggregator 58

This is going to be BIG.

FEBRUARY 27, 2011

You get dilution sensitive and you start optimizing on price of a financing deal, versus finding the right partners or raising enough money to grow. The right partner goes to bat for you during the recruiting process—helps you identify and court the hires that you look back at as key to your success.

Dilution 104

Dilution Equity Hiring Partner 104

View from Seed

DECEMBER 4, 2019

Over the last 10 years, we’ve been in a bull market with considerable froth in late stage financing activity and valuations. The trends described above in VC performance have an upstream effect on Limited Partners which is somewhat counter-intuitive. This would suggest that TVPI would be performing well. LP Constraints.

LP 256

LP IRR Distribution Portfolio 256

David Teten

DECEMBER 2, 2019

I’m now researching non-dilutive funding for Action Tank , a startup I’m gestating to “Make America Functional Again”. I worked with outsourced research firm Wonder * to identify all of the institutions we could who support tech impact startups with cash and community, and in many cases without dilution. Three dot dash. Y Combinator.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. In 2019 we partnered with several revenue-based lending providers, effectively creating a marketplace. “. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

JANUARY 21, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020. His work on VC and small communities can be found at greatercolorado.vc/blog.

Equity 78

Equity Revenue Cofounder Colorado 78

David Teten

JANUARY 19, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. Similar to the explosion of seed funds in the past decade, we (and some limited partners too ) believe these Flexible VCs are on the forefront of what will become a major segment of the venture ecosystem. Of the Inc. 5000 companies, only 6.5% return cap.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Both Sides of the Table

APRIL 25, 2011

It’s nearly impossible to get a services company financed by VCs. They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. You’re a small fish. This team is talented. They wanted advice.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Feld Thoughts

MARCH 24, 2017

Lindel joined Foundry Group as a partner to lead the fund investing activity of Foundry Group Next. We’ve had the opportunity to work with Founder Collective’s partners – David Frankel, Eric Paley, and Micah Rosenbloom – over the years on several companies. It starts with the people.

Founder 75

Founder LP Technical Review Seed Stage 75

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? each with partners as the lead. even before the pandemic itself has been fully tamed. how on Earth could the venture capital market stand still?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

DECEMBER 1, 2009

I know that people find safety in numbers (and there always seems to be 3 amigos) but imagine this for a moment – you go and raise venture capital and you’re fighting over whether to dilute with a VC by 25% or 30% as a company. You don’t necessarily have to have a ying and yang c0-founder.

Hiring 289

Hiring Cofounder Dilution Startup 289

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing. Start-up | Mondays. Technology | Thursdays. Franchises.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

View from Seed

OCTOBER 28, 2019

But this financing contour description is just a proxy for underlying business metrics. In reality, a pre-seed is “an early round of financing that is designed to help a company achieve certain intermediate milestones PRIOR to the magic combination of strong PMF + meaningful traction.”.

Seed Stage 247

Seed Stage Finance Dilution Early Stage 247

Babbling VC

OCTOBER 3, 2011

For those of you not in the know, they are one of the largest limited partners ( LP's : investors in venture capital funds) in Europe and are basically in almost all the funds throughout the market. Exits will feed future intermingling amongst the entrepreneurs and the funds financing them.

LP 82

LP Europe Germany Venture Capital 82

Both Sides of the Table

FEBRUARY 22, 2011

Here’s the problem: Let’s say you have 5 VCs (plus angels but let’s ignore that for now) and each one owns 5% so you took 25% dilution to get the round done. Let’s say each of those 5 partners has at least 7 other investments each. The most common case is that the partner who did the deal left the firm.

Dilution 314

Dilution Cap Table Due Diligence Option Pool 314

Austin Startup

JULY 6, 2018

Ask the Users Startup Accelerators: Bundled and Unbundled Over the past several years, accelerators have emerged as a powerful filtering and signaling mechanism in early-stage startup ecosystems, allowing high-potential young startups to connect with investors, advisors, and other strategic partners far faster and more efficiently than before.

Dilution 48

Dilution Startup Technical Review Equity 48

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Plus, any other non-standard items here should be called out, too, like non-dilutive grants, as applicable. First, it’s helpful to enumerate the startup’s funding history to date.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

BeyondVC

FEBRUARY 6, 2007

I can also say that there is a similarly fine line between dilution and delusion but this one is easier to draw. Recently my partners and I were discussing the merits of a term sheet that came in for a portfolio company. The post The fine line between dilution and delusion first appeared on BeyondVC.

Dilution 78

Dilution Term Sheet Valuation Early Stage 78

Austin Startup

MARCH 26, 2019

These strategies can be useful in increasing initial conversions from your ads and website traffic, but offering large discounts too early in the life of the company will lower your gross margins and CAC, both of which will affect your unit economics and future financing conversations. These add up very quickly.

Technical Review 49

Technical Review Software Review China Acquisition 49

The Equity Kicker

MAY 14, 2012

Twice in the last week I found myself coaching founders on how to build a financing plan around value creation milestones so I thought I would share what I said here. Given that the valuation of a startup increases when milestones like these are hit it makes sense to build a financing plan based on when they are likely to come in.

Finance 118

Finance Valuation Venture Capital Dilution 118

rapidrollout.wordpress.com

JANUARY 15, 2011

Also, working with a consulting CTO will prepare you for finding and selecting a permanent technology partner. And finally, you may be able to avoid diluting your equity. Avoid delay by using a consulting CTO on a short-term basis while you are searching for a permanent technology partner.

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40

David Teten

NOVEMBER 17, 2011

I’ve often found it helpful to have on hand a simple model showing the impact of each financing stages on all team members, suitable for sharing with everyone in the company. In particular, this model is designed to help all team members understand the impact of dilution on their options.

Employee 155

Employee IRR Startup Mexico 155

YoungUpstarts

JANUARY 20, 2020

Most young founders lack at least a few of those C’s, making debt financing only feasible under limited conditions (and with plenty of upfront legwork and planning). It’s an attractive transactional relationship, though it can severely dilute ownership. Consider owner financing. How does owner financing work?

Indiana 165

Indiana Startup Bootstrapping Finance 165

BeyondVC

FEBRUARY 6, 2007

I can also say that there is a similarly fine line between dilution and delusion but this one is easier to draw. Recently my partners and I were discussing the merits of a term sheet that came in for a portfolio company. The post The fine line between dilution and delusion appeared first on BeyondVC.

Dilution 60

Dilution Term Sheet Valuation Early Stage 60

The Next Web

FEBRUARY 27, 2014

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. This is typically in conjunction with an upcoming financing or pending takeover offer. This is typically in conjunction with an upcoming financing or pending takeover offer.

Valuation 167

Valuation Forecast Seed Stage .Net 167