Remove Down Round Remove Hiring Remove Metrics
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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

Another firm we saw tried to raise $15 million at a $60 million pre-money with similar metrics. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later. And the CEO they would hire to come in and run the business when you go would always be a mercenary.

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On the Road to Recap:

abovethecrowd.com

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.

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People-First Capitalism

Reid Hoffman

And I hired a COO, Belinda Johnson , and she said, “No, if people don’t like you, you should meet with them.” The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs. That was totally counterintuitive. And I said, “Why?”

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Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

Yes, you heard me right – multiple research studies, including from the Kauffman Foundation , have shown that when you remove a follow-on venture capital round from a founder or angel investor-funded company, that expected returns skyrocket. It is driven by the following: • The Best Metric for the Health of a Company is Cash Flow.

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To Follow On or Not to Follow On

This is going to be BIG.

There are a lot of people that artificially group together performance metrics for venture, and try to extrapolate successful stratagies from it. I think I'm terrific at helping early stage teams by rolling up my sleeves and doing what's necessary--getting them hires, PR, product strategy help to find that market fit. Down from what?

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Current Startup Market Emotional Biases

Feld Thoughts

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?

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The Future of Startups 2013-2017

Scalable Startup

And so the other reason that I am very interested in delving deep into this space is that it seems like IPOs like Workday, Palo Alto Networks are sort of — they have metrics and analytics that Wall Street understands, more so than a Facebook; like “We are going to sell X number of this in the next year.”