Startup Professionals Musings

JANUARY 27, 2012

Anti-dilution protection. But some dilution is almost inevitable. You can end up becoming very frustrated with the investors, or cause the venture to fail if you run out of seed capital before the angel round can be completed. These “IV drip” financings may reduce risk for investors, but put more pressure on founders.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 223

View from Seed

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Gust

OCTOBER 17, 2011

Anti-dilution protection. But some dilution is almost inevitable. You can end up becoming very frustrated with the investors, or cause the venture to fail if you run out of seed capital before the angel round can be completed. These “IV drip” financings may reduce risk for investors, but put more pressure on founders.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 158

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

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

Seeing Both Sides

AUGUST 28, 2017

Instead I will make a few observations about how an investor might think about the impact of ICOs / token launches on the venture capital industry, in particular, and some of the downstream ramifications that need to wrestled with. Need for growth capital.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Instead I will make a few observations about how an investor might think about the impact of ICOs / token launches on the venture capital industry, in particular, and some of the downstream ramifications that need to wrestled with. Need for growth capital.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Haystack

AUGUST 18, 2019

.” 2/ Lateral Competition – The number of “seed” funds has also grown during this boon. More and more seed capital has flooded into the market, making the situation for funding seed rounds ~$2M-ish total size more competitive. Samir Kaji from First Republic has been writing on this for years.

Seed Stage 108

Seed Stage Cap Table Early Stage Malaysia 108

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario.

Recapitalization 70

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

Rob Go

NOVEMBER 30, 2012

One of the pitches of seed investors is that they have a) the relevant experience needed to really help companies and b) are incentivized to spend more time helping founders than the very large funds. But I’m noticing this value being diluted somewhat for a few reasons. In many cases, this is still true.

Seed Stage 55

Seed Stage Pre-Money Valuation Dilution Early Stage 55

Scott Edward Walker

SEPTEMBER 21, 2011

If you’re an entrepreneur looking for seed capital, but don’t know any sophisticated angel investors, you need to hustle and build relationships in order to get “warm” introductions. When will I get my first dividend check?”, Tip #2: If You Don’t Know Any Sophisticated Angels, Hustle and Build Relationships.

Preferred Stock 45

Preferred Stock Angel Investor Entrepreneur Common Stock 45

Austin Startup

APRIL 28, 2019

I put that in quotations, because, as I’ll expound, there is a start-up industrial complex that is designed to fleece novice founders from their seed capital with predatory fees, terms, etc. If you really need a desk, drive Uber/Lyft for a day and use your earnings to pay for that workspace without diluting your equity.

Incubator 50

Incubator Equity Programming Cloud 50

Rob Go

MAY 2, 2016

Dilution is the big question here. Raising a seed round half as big usually does not yield half the dilution at this early stage. But as valuations are becoming more rational, big seed rounds are increasingly more and more dilutive.

Seed Stage 28

Seed Stage Dilution Valuation Seed Capital 28

maplebutter.com

JANUARY 8, 2013

2) Co-Founders are the largest form of dilution (if you’re raising) 3) Everything around LeanStartup / Customer Development 4) Understand the micro economics of your business early. Co-founders are the highest form of dilution to a business. We are raising seed capital, but would like to have a US tech investor.

Technical Review 44

Technical Review Startup Cofounder Software Review 44