Startup Professionals Musings

MAY 20, 2016

Unreasonably high early valuations hurt the entrepreneurs, as well as professional investors, later when a second round becomes a down round or can’t be negotiated. Investors cannot verify accountability or governance. In equity crowdfunding, no investor is representing their own interest.

Angel Groups 136

Angel Groups Accredited Investor Equity Due Diligence 136

Seeing Both Sides

JANUARY 9, 2009

CEA head Gary Shapiro reported in his keynote that industy sales were up over 5% and that 2009 will be flat or slightly down. His speech, by the way, was as much a political speech as it was an industry overview, further underscoring the importance of government activities in business affairs in the coming years. Not bad if true.

Down Round 20

Down Round Forecast Portfolio Government 20

NZ Entrepreneur

JULY 8, 2019

The situation I see time and again is an over-valuation on a markedly smaller-than-anticipated business, revenue numbers not achieved, and then needing to do another raise on a lower valuation (a ‘down-round’). Appropriate governance. This often carries the double whammy of dilution.

New Zealand 49

New Zealand Entrepreneur Valuation Dilution 49

www.paulgraham.com

APRIL 28, 2010

At one extreme is the sort of pork-barrel project wherea town gets money from the state government to renovate a vacantbuilding as a "high-tech incubator," as if it were merely lack ofthe right sort of office space that had till now prevented the townfrom becoming a startup hub. 6 ]Ive omitted one source: government grants.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness? A down round is nothing. Get over it and move on.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Reid Hoffman

JUNE 8, 2021

Most boards have an audit committee, a nominating governance committee and a comp committee. And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. Not that we should have more committees.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Reid Hoffman

JUNE 8, 2021

Most boards have an audit committee, a nominating governance committee and a comp committee. And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. Not that we should have more committees.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Scalable Startup

FEBRUARY 1, 2013

And then medium-size businesses start to use it, and then large businesses start to use it, and then eventually the government starts to use it. Alexia Tsotsis: It’s grassroots versus trickle-down. Marc Andreessen: Versus trickle-down. Alexia Tsotsis: Are you seeing down rounds because the NASDAQ is down?

Software Review 22

Software Review Startup Venture Capital Stock 22