Steve Blank

APRIL 26, 2022

For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. A cram down is different than a down round. A down round is when a company raises money at valuation that is lower than the company’s valuation in its prior financing round.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

Lightspeed Venture Partners

OCTOBER 7, 2012

This includes calling current and prospective customers, understanding technology and manufacturing, doing reference calls on the founders and key executives, verifying financial and legal information and often other items specific to the company. In the real world, he would make those calls BEFORE investing, not after.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Feld Thoughts

FEBRUARY 9, 2016

Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. I suffered through the next financing after implementing a complex structure, or a sale of the company, or a liquidation.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

ReadWriteStart

NOVEMBER 22, 2010

The survey looks at the valuations and the terms of financing for over 100 technology companies in Silicon Valley that reported raising capital in the third quarter of this year. And not surprisingly, perhaps, the survey found that valuations are up.

Silicon Valley 115

Silicon Valley Venture Capital Valuation Down Round 115

Growthink Blog

MAY 23, 2011

The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1. This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Both Sides of the Table

FEBRUARY 14, 2016

There is much discussion online and also in small, private groups, about why the price of technology companies – public and private – are falling. But if you’re a seed investor and you’re worried that the A-round won’t get done if your post-money is too high you suddenly start paying less. And so it goes.

Valuation 150

Valuation Down Round Startup Later Stage 150

Both Sides of the Table

MARCH 30, 2016

Six firms had expressed strong interest, two had strong champions already trying to test price and round size and one had made it clear they were planning to submit a term sheet the following week. Below is a graph of the NASDAQ the US public barometer of technology companies. Great companies get financed.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

This is going to be BIG.

SEPTEMBER 7, 2012

That wasn't a bubble bursting issue--that was a poor financing strategy issue of people getting caught with their pants down, hands in the cookie jar, and all the metaphors you can think of at once. If you're doing seed deals, how often does a down round in a seed deal even happen? Down from what?

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99

Both Sides of the Table

JUNE 30, 2016

And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. These types of firms may see your follow-on financing as a chance to “buy up ownership.” Most firms are somewhere in the middle.

Pre-Money Valuation 292

Pre-Money Valuation Valuation Early Stage Startup 292

Berkonomics

OCTOBER 5, 2023

Many of the start-ups my various angel funds have financed died a slow death , not because of poor concept but because of poor execution, wasting fixed overhead and draining the financial resources from the company coffers. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result.

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Berkonomics

AUGUST 10, 2017

Many of the start-ups my various angel funds have financed died a slow death, not because of poor concept but because of poor execution, wasting fixed overhead and draining the financial resources from the company coffers. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

Berkonomics

MARCH 30, 2010

Many of the start-ups my various angel funds have financed died a slow death, not because of poor concept but because of poor execution, wasting fixed overhead and draining the final resources from the company coffers. . Email readers continue here.] But we investors often allow too little slack in our estimates as well.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. In late 2015, many public technology companies saw a significant retrenchment in their share prices primarily as a result of a reduction in valuation multiples. By the first quarter of 2016, the late-stage financing market had changed materially.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 4, 2016

.” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. They point to some widely known facts: financings & valuations are up massively over the past 7 years and non-VC money has entered the system.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Both Sides of the Table

OCTOBER 18, 2015

There is a lot of uncertainty about the state of the private, high-growth technology markets and the venture capital markets that underpin them. Great technology firms were built during the last dry period and we saw the huge wealth creation of Facebook, Twitter, Tesla and others. 25% “down rounds? Boom and bust.

IPO 150

IPO Venture Capital LP SEC 150