Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Startup Professionals Musings

AUGUST 4, 2014

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and venture capital investors are brought in.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Startup Professionals Musings

MAY 1, 2023

Investors may not be called cofounders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all cofounders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Amount of venture funding provided.

Technical Cofounder 247

Technical Cofounder Equity Distribution Cofounder 247

Both Sides of the Table

JULY 17, 2018

Hire when it feels like you're bursting at the seems or missing a critical skill on existing team or have figured out how to scale growth  —  @msuster 6/ Raising capital at very high prices helps avoid short-term dilution. But if you raise at too high a price you make it harder to raise next round.

Founder 242

Founder Dilution Software Review Later Stage 242

Startup Professionals Musings

SEPTEMBER 10, 2018

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Amount of venture funding provided.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

Both Sides of the Table

SEPTEMBER 25, 2010

Either would be fine with startups, so long as they can easily change their valuation. The key is making sure the second close isn’t too high (I think 50% of X sounds about right) because you’ll be adding on that dilution to yourself & “X&# investors will own less of the company. I agree on all points.

Finance 286

Finance Term Sheet Technical Review Warrant 286

View from Seed

MAY 2, 2019

The challenge with pre-seed rounds is that pricing will sometimes be pretty dilutive. The downside is that YC is itself quite dilutive, the program itself may not be a great fit, and there are many many companies out of your batch that won’t be one of the anointed winners. The Pre-YC Pre-Seed.

Early Stage 214

Early Stage Dilution Valuation .Net 214

Both Sides of the Table

SEPTEMBER 29, 2009

They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. Should VC’s really be impacted by public market valuations when the money that they’re investing today should be for returns in 7-10 years? Short answer – yes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

OCTOBER 14, 2011

million pre-money valuation, which is a $10 million post-money) you get diluted by 25% (2.5m / 10m). But understanding how you’re likely to get diluted over time is a more difficult concept. So here is our crack at explaining the world of dilution to you. This post originally appeared on TechCrunch. million at a $7.5

Dilution 394

Dilution Pre-Money Valuation Startup Valuation 394

VC Cafe

FEBRUARY 27, 2024

Everyone moved to earlier stage – part of the decline in late stage investing is the ‘baggage’ of companies that previously raised money at inflated valuations that they would struggle to justify in today’s market. That’s yet another reason for micro funds to move earlier in the fundraising timeline.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Both Sides of the Table

MARCH 21, 2013

It also is a great way to finance your business without facing dilution before you actually raise venture capital and when the valuation you might get from angels is less than you’d want. So it wouldn’t bother me if 90% of your year-one revenue was PS provided it was done with a specific plan for year-2 software sales.

Software Review 321

Software Review Software IP Technical Review 321

The Next Web

OCTOBER 7, 2013

Every time a startup raises capital, all common shareholders are diluted. As an aside for founders, there is an interesting approach on how to arrive at equity offers outlined by Fred Wilson that may be worth checking out once there is a sense of valuation. All of the estimates displayed above are figures prior to any dilution.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Both Sides of the Table

OCTOBER 1, 2009

This has a tangible impact on the valuation of start-ups and the pace of investment. If you’re raising $2 million and can close on $3 million – don’t optimize to minimize short-term dilution, optimize for contingencies in case the market gets worse. Bad stock markets mean less IPO’s and lower prices for M&A.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Both Sides of the Table

OCTOBER 12, 2014

” If you invested at $8m pre-money and put $2m in (thus you own 20% of a company at a $10m post-money valuation) and if you put another $2m into a round at a $40m valuation raising $10m ($50m post) you end up with half your money at $8m pre and half at $40m pre thus your average price goes up dramatically. That seems fair.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

YoungUpstarts

OCTOBER 24, 2013

One of the challenges for investing in startups has always been the lack of an established way for founders and investors to actually measure and decide on the valuation of the startup concerned. ” Ideaspotting investment pre-money valuation valuation Worthworm'

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Optimize for a W more than % dilution in these circumstances. Be realistic on valuation.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

Both Sides of the Table

JULY 25, 2010

The key to this strategy is getting 5 people who form the social proof to help you get a bigger angel round done at a higher valuation by tons of industry insiders and thus offering the social proof you need attract great employees and ultimately venture capital investors.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Altgate

DECEMBER 15, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← No one wants to tell you your baby is ugly More on Liquidation Preferences → Pre-Money Valuation vs Number of Founders Posted on December 15, 2010 by admin Here’s a chart of the day worth sharing.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

VC Cafe

JUNE 10, 2022

According to new research by Pitchbook , the trickle down effect has already started in seed and series A startups with round sizes and valuations shrinking in size compared to 2021. But recently those round sizes and valuations have tumbled to about $10 million and $50 million, respectively, he said. Lemkin #????????????

Valuation 151

Valuation Marketing Israel Venture Capital 151

Startup Professionals Musings

AUGUST 24, 2016

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as Angel and VC investors are brought in. Amount of venture funding provided.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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 cases of WeWork and Uber cast a cloud of doubt over funds that are largely driven by one or two outlier companies that may have a tremendous valuation, but shaky underlying business metrics.

LP 256

LP IRR Distribution Portfolio 256

Both Sides of the Table

MAY 30, 2018

I thought I’d write a post about how to talk about valuation at a startup and give you some sense of what might be on the mind of the person considering funding you. 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. is to start with just the data.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

The Startup Magazine

MARCH 14, 2022

The equity dilution at this nascent stage is on desirable terms; such investing can lead to profitable returns. Here, the company’s valuation benchmark is set, and funding is solicited accordingly. 2) Seed funding. Promoters try to raise this funding majorly from Angel Investors. 3) Series A, B, C funding.

Technical Review 167

Technical Review Due Diligence India Startup 167

ReadWriteStart

JUNE 1, 2020

The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. The essential components of your pitch include a comprehensive business plan with projections of 5 years along with investment offerings and estimated valuations. Point number 3: Never raise money with an increased valuation.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

The Next Web

JUNE 15, 2012

Not to mention the fact that every time you compensate with equity, you dilute your own ownership of the business. Any decision to hand out stock or stock options should be made within the big picture context of your company’s valuation and the total number of shares you’ll be granting. Tips for compensating with equity. Plan upfront.

Equity 116

Equity Stock Options Vesting Stock 116

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. The administrative work we actually do at board meetings? Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

The Next Web

NOVEMBER 20, 2013

So, let’s say that one founder puts in $100,000 in seed capital, that could be worth 20 percent of a seed stage company’s valuation. So, a fair split, would be closer to 60/40 in favor of the funding founder, when diluted for the cash.

Cofounder 136

Cofounder Equity Founder Seed Stage 136

Both Sides of the Table

NOVEMBER 14, 2017

Raise too soon and likely take on more dilution, wait and get valuation up (as our metrics continue to rise) but then run to a point where you have a lower cash balance and place more risks on the business. These are the hard problems we’ll have to address in the year ahead along with the perennial, “ When should we raise more money?

Operations 286

Operations New York City Technical Review Startup 286

YoungUpstarts

SEPTEMBER 16, 2015

What’s critical for entrepreneurs to understand is that valuations for startups do not increase at a linear rate; they increase geometrically based on achieving the right milestones. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation.

Valuation 100

Valuation Dilution Chicago Technical Review 100

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. Valuations are based more on typical later-stage type of metrics. Finally, don’t over-optimize on valuation. Third, investors are generally much more conservative in Asia.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

FEBRUARY 17, 2011

When times are really good for fund raising many teams delay to maximize their valuation. If you are able to raise money from credible sources at a reasonable dilution percentage then I personally favor getting the round done now and building your business. How much dilution am I going to have to take now? 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Hunter Walker

SEPTEMBER 10, 2024

Not only can valuations rapidly outstrip fundamentals and become artificially high really fast, they’re also deceptively stable. This makes sense at face value: a) fundraising ranges from being a distraction to a colonoscopy + root canal, b) dilution sucks, and c) they are quantifiable attributes, easy to compare or rate good/bad.

Venture Capital 89

Venture Capital Silicon Valley Memphis Cap Table 89

Berkonomics

OCTOBER 10, 2024

Third (if you’re keeping score), it is not wise to dilute the founder’s ownership greatly in the first round of financing. Giving control over that vision to others early on often dilutes the vision and is a disincentive to the entrepreneur. Email readers, continue here…] Fourth, there is the matter of control.

Dilution 127

Dilution Startup Retention Valuation 127

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. Why not go further, develop more valuation, customer experience, and really, deeply validate the business? In 1M/1M, our preferred financing strategy is customers. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Bootstrapping 115

thinkspace.com

SEPTEMBER 7, 2012

Should founders have anti-dilution rights? You would want to check and see if your shares can be diluted. Yes, you could be diluted from 10% down to 1% and there’s a number of reason why that could occur. Dilution should occur across the board. What is the equity I should expect (protected from dilution)?

Equity 62

Equity Employee Founder CTO Hire 62

betashop.com

OCTOBER 8, 2012

Never, ever, choose your investors based on valuation. A couple of dilution points here or there wont matter in the long run but working with the right people will.? Alignment of business objectives and personal relationships means tons more than valuation. Don’t skimp on fundraising because of dilution fears.?.

Technical Review 108

Technical Review Technology Software Review Valuation 108