YoungUpstarts

JUNE 26, 2020

When a VC’s website says they do “early stage” – to a VC that means a product has already been built and generating some revenue, while to an entrepreneur it means “just an idea.”. I used to think a valuation was kind of like a stock price of a public company. I was wrong. What happens then?

Finance 205

Finance Silicon Valley Valuation Startup 205

Both Sides of the Table

FEBRUARY 14, 2016

forward revenue for SaaS businesses when in the years before it had been less than 5x. I wonder whether LinkedIn’s stock market plunge in January 2016 might have a similar effect (to a lesser magnitude because the underlying company is still great). Why Down Rounds are Harder Than You May Think.

Valuation 150

Valuation Down Round Startup Later Stage 150

Both Sides of the Table

MARCH 30, 2016

Investors had grown too used to the idea that any deal you funded would get marked up to a higher valuation in the next round and that’s clearly not always true. Invoca was raising at the tail end of this market phenomenon at this time doing tens of millions in SaaS recurring revenue and growing at a nice clip. FOMO was NOMO.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

David Teten

AUGUST 7, 2019

The second strategy is Value Investing , a strategy which “seeks to maximize returns by finding stocks that are undervalued by the market…Investors assess a stock’s intrinsic value…and compare that value with the stock price. LTV / CAC, revenue growth, etc.)

Venture Capital 60

Venture Capital Valuation Stock NDA 60

NZ Entrepreneur

JULY 8, 2019

I made my first investment in the stock market when I was 12 years old. Soon after that first investment, I started my first business, and am now on my fifth (all $1m+ in revenue, but not all ‘successful’). I personally funded my first ventures, then led the two rounds that have seen Ambit take in $2.2m

New Zealand 53

New Zealand Entrepreneur Valuation Dilution 53

Both Sides of the Table

SEPTEMBER 18, 2014

How will you price the next round? Your A round? Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. Less than you’ll probably grant your most junior employees in stock options? A down round? Stock Option plans.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

www.paulgraham.com

APRIL 28, 2010

A lawyer I asked about it said: When the company goes public, the SEC will carefully study all prior issuances of stock by the company and demand that it take immediate action to cure any past violations of securities laws. There never has to be atime when you have no revenues. Those that dont fail all seem to get boughtor go public.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. The same thing happened to many Internet stocks. Their own ego is also a factor – will a down round signal weakness? A down round is nothing.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Gust

SEPTEMBER 17, 2014

How will you price the next round? Your A round? Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. Less than you’ll probably grant your most junior employees in stock options? A down round? Stock Option plans.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Reid Hoffman

JUNE 8, 2021

We took nearly 2% of the company’s stock, and we put it aside and we created, it was actually 9.2 But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. I think there’s a one-for-one-for-one.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

VC Cafe

MAY 29, 2022

Snap’s stock plunged 40% last week after Evan Spigel announced the company will miss revenue targets, which raises questions about other ‘advertising powered’ social networks. Over 60 tech companies have been reported to conduct over 16,000 layoffs in May, and the list is growing as you can see in [link].

Venture Capital 183

Venture Capital Early Stage Valuation Startup 183

Berkonomics

AUGUST 3, 2023

They have been burned too badly during the last decade by overvaluing businesses and finding themselves like friends and family, “stuffed” into a down round of lower valuation when a company takes its next round of financing from the next step, venture capitalists.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Berkonomics

JUNE 8, 2017

They have been burned too badly during the last decade by overvaluing businesses and finding themselves like friends and family, “stuffed” into a down round of lower valuation when a company takes its next round of financing from the next step, venture capitalists.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Reid Hoffman

JUNE 8, 2021

We took nearly 2% of the company’s stock, and we put it aside and we created, it was actually 9.2 But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. I think there’s a one-for-one-for-one.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Berkonomics

JANUARY 20, 2010

They have been burned too badly during the last decade by overvaluing businesses and finding themselves like friends and family, “stuffed” into a down round of lower valuation when a company takes its next round of financing from the next step, venture capitalists.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Hippoland

NOVEMBER 13, 2016

If a company sells for stock or partial-stock, then it’s more complicated, depending on whether the acquirer is a public company or a private company, and we don’t need to dive into that in this post. If a company raises a good round, it gets marked up to the new value. Equity rounds of $10m pre.

IRR 48

IRR Valuation Portfolio Due Diligence 48

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

VC Cafe

MAY 18, 2022

After a 13 year bull market run, anywhere you look in the stock market these days, it’s mostly RED. The tech companies that have been stock market darlings, breaking new records, are struggling, many missing analysts expectations. Down rounds are coming. Tech is entering a downturn. Fundraising will get tougher.

Term Sheet 190

Term Sheet Startup Valuation Ukraine 190

Both Sides of the Table

OCTOBER 18, 2015

“Trade in an asset at a price that strongly deviates from an asset’s intrinsic value” The arguments against that, “This time the startups have real revenues!” ” In just two years the median round sizes for deals with mutual funds has more than tripled and the same phenomenon holds for hedge funds.

IPO 150

IPO Venture Capital LP SEC 150