Both Sides of the Table

JUNE 30, 2016

How much you raise determines valuation I know it sounds crazy but at the earliest stages of a company your valuation often is determined by how much money you raise. A $15–20 million valuation sounds better than an $8 million valuation, doesn’t it? But it’s actually not that silly.

Pre-Money Valuation 292

Pre-Money Valuation Valuation Early Stage Startup 292

The Equity Kicker

SEPTEMBER 24, 2014

We see this all the time at Forward Partners where we invest right from the idea stage and most of the companies get a first version of their product live for less than £30k (that generally includes founder salaries and time spent doing customer research). Forward Partners and Crowdcube are both attacking elements of these problems.

Early Stage 119

Early Stage Development Team Review Technical Review Software Review 119

Steve Blank

APRIL 23, 2014

Companies manage these three types of innovation with an innovation portfolio – they build innovation internally, they buy it or they partner with resources outside their company. Corporate business development and strategic partner executives are flocking to Silicon Valley to find these five types of innovation.

Acquisition 334

Acquisition Intellectual Property Silicon Valley Startup 334

Steve Blank

MAY 29, 2011

Max and his partners interviewed and analyzed over 650 early-stage Internet startups. Today they released the first Startup Genome Report — a 67 page in-depth analysis on what makes early-stage Internet startups successful. longer to reach scale stage compared to a founding team of 2 and they are 2.3x

Technical Cofounder 335

Technical Cofounder Early Stage Startup Silicon Valley 335

Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). Limited Partners or LPs (the people who invest into VC funds) have taken notice as 2014 is by all accounts the busiest year for LPs since the Great Recession began. Where are we today? ” Stated simply – if you seed funded Uber at $4.5m

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Startup Professionals Musings

JUNE 26, 2013

Every early-stage startup should explore this new funding alternative. New “up-and-comer” VCs focus on early-stage companies. VCs are finding that they don’t need the “large” funds of $100M to $500M to support a portfolio, if they focus on early-stage startups.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

Both Sides of the Table

AUGUST 17, 2009

Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. This is a BIG mistake many early stage companies make. You should implement restricted stock with vesting at the earliest stages in your company -even before the VC’s ask.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

Startup Professionals Musings

AUGUST 4, 2014

The next default of waiting until later is equally bad, since partners who bow out early will still expect an equal share of that first billion you make later. 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.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Both Sides of the Table

OCTOBER 15, 2009

When you’re an early-stage startup that hasn’t raised any institutional money you end up doing almost every job function of the company yourself. This is part of my ongoing series Startup Advice. This is a story of one of the risks of venture capital. True story.) 2 weeks later and we may never have raised any more VC.

Founder 299

Founder Technical Review Startup Venture Capital 299

Startup Professionals Musings

MAY 1, 2023

The next default of waiting until later is equally bad, since partners who bow out early will still expect an equal share of that first billion you make later. 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.

Technical Cofounder 247

Technical Cofounder Equity Distribution Cofounder 247

Startup Professionals Musings

MARCH 10, 2021

Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” The key here is to create a win-win partner situation for your investors. Lack of clear objectives/goals. Then you have to have evidence to support your request.

Software Review 307

Software Review Due Diligence Elevator Pitch Early Stage 307

Startup Professionals Musings

SEPTEMBER 9, 2010

Every early-stage startup should explore this new funding alternative. New “up-and-comer” VCs focus on early-stage companies. VCs are finding that they don’t need the “large” funds of $100M to $500M to support a portfolio, if they focus on early-stage startups.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

Startup Professionals Musings

SEPTEMBER 30, 2013

Make sure your plan answers every relevant question that you could possibly imagine from your business partners, spouse, and potential investors. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Steve Blank

JUNE 27, 2017

If they select a business model that targets industry incumbents, they don’t have to worry about upsetting existing customers, partners or distribution channels. Uber – current valuation >$70 billion – knew the day they started that their ridesharing service violated the law in most jurisdictions.

Startup 306

Startup New York City Valuation Distribution 306

VC Cafe

FEBRUARY 27, 2024

In smaller funds, ticket sizes tend to be lower, so pre-seed is the only stage where micro funds are able to secure their minimum equity targets. Lower valuations and follow on valuation sensitivity – fundraising is a recurring event in the life of a startup.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Both Sides of the Table

FEBRUARY 12, 2019

You might like to think that a bunch of savvy venture capitalists saw a market niche for raising smaller funds or perhaps there was a generational shift where disgruntled junior partners spun out of bigger firms to start their own gigs. Well, both of those things happened but they were lagging indicators.

Venture Capital 328

Venture Capital Technical Review Seed Stage IPO 328

Startup Professionals Musings

SEPTEMBER 10, 2018

The next default of waiting until later is equally bad, since partners who bow out early will still expect an equal share of that first billion you make later. 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.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

Both Sides of the Table

OCTOBER 12, 2014

These tensions seep out in some angels or seed funds publicly or semi-privately deriding later-stage VCs for their “bad” behavior. I have seen bad behavior from later-stage VCs, believe me. But I have seen equally bad behavior from super early stage investors. As always a balanced perspective is in order.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Startup Professionals Musings

AUGUST 31, 2012

Make sure your plan answers every relevant question that you could possibly imagine from your business partners, spouse, and potential investors. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Both Sides of the Table

FEBRUARY 25, 2010

We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. million at a $15 million pre-money valuation. Morgan Stanley had proposed a higher valuation to let them in. I’ve offered to fund an early stage company where I promised cash in bank in less than 30 days.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Startup Professionals Musings

JUNE 17, 2011

Make sure your plan answers every relevant question that you could possibly imagine from your business partners, spouse, and potential investors. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Steve Blank

NOVEMBER 5, 2009

Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. What are Early Stage VC’s Really Asking? Did the partner have a good or bad day, etc. Did the VC’s like your team ? Do they believe you have a big enough vision and market.

Customer Development 270

Customer Development Developer Customer Silicon Valley 270

Startup Professionals Musings

NOVEMBER 17, 2013

Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” The key here is to create a win-win partner situation for your investors. Lack of clear objectives/goals. Then you have to have evidence to support your request.

Software Review 265

Software Review Due Diligence Elevator Pitch Startup 265

Both Sides of the Table

JULY 25, 2010

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Startup Professionals Musings

OCTOBER 10, 2012

Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” The key here is to create a win-win partner situation for your investors. Lack of clear objectives/goals. Then you have to have evidence to support your request.

Software Review 250

Software Review Due Diligence Elevator Pitch Entrepreneur 250

Startup Professionals Musings

AUGUST 9, 2011

Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” The key here is to create a win-win partner situation for your investors. Lack of clear objectives/goals. Then you have to have evidence to support your request.

Software Review 246

Software Review Due Diligence Elevator Pitch Early Stage 246

Startup Professionals Musings

MAY 22, 2010

Make sure your plan answers every relevant question that you could possibly imagine from your business partners, spouse, and potential investors. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

Startup Professionals Musings

JUNE 25, 2012

After bootstrapping, friends and family are the most common funding sources for early-stage startups. Use this approach before you have a real valuation, a real product, or any real customers. Partner with distributor or beneficiary. Just don’t quit your day job before your new company is producing revenue.

Technical Review 257

Technical Review Bootstrapping Venture Capital Incubator 257

Both Sides of the Table

MARCH 6, 2010

My job doesn’t involve the daily grind of customer complaints, product outages, business partner / channel problems, hiring / firing, etc. As a VC I spend tons of time with companies at an early stage in their business. There is less team camaraderie – I really get along with my partners well.

Technical Review 312

Technical Review Due Diligence Spain Warrant 312

Startup Professionals Musings

MARCH 16, 2011

After bootstrapping, friends and family are the most common funding sources for early-stage startups. Use this approach before you have a real valuation, a real product, or any real customers. Partner with distributor or beneficiary. Just don’t quit your day job before your new company is producing revenue.

Technical Review 233

Technical Review Bootstrapping Startup Venture Capital 233

Agile VC

MAY 26, 2011

In another we decended into a debate about our 5 year forecasts (I built the models so fielded most of these questions), and it became clear they probably weren’t the best fit for our Series A round (this group is no longer in the early-stage VC business). It was a pretty good valuation for the time. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

VC Cafe

JANUARY 14, 2022

I commented on this to Israel21c in the early days of the tre nd. Many of the companies that went public via SPACs saw their valuations dramatically reduce in the months that followed post IPO. Plenty of fresh powder in the market across stages. This is even before serial entrepreneur Liad Agmon joins as partner.

Israel 158

Israel Technical Review Lock-up Period South Korea 158

Startup Professionals Musings

NOVEMBER 4, 2015

For early-stage startups, the goodwill component can easily exceed the size of all the financial elements together, or can just as easily mark a company with good financials as not investable. In the investment community, these leadership elements are often called “goodwill.” Focus on talent and people growth.

Leadership 120

Leadership Technical Review Due Diligence Valuation 120

VC Cafe

OCTOBER 31, 2022

But even in the seed market the bar could get higher: I wouldn’t be surprised to see valuations drop and for VCs to have rising expectations about the level of traction they expect to see before funding. Growth investors seek bargains and many shifted their focus to earlier stage. The later the stage, the bigger the impact.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

David Teten

DECEMBER 12, 2017

(written by Philipp von dem Knesebeck , Managing Partner, Blue Future Partners (bluefp.com, @bluefutureteam ), and David Teten ). Based on this paper, Blue Future Partners and PEVCTech recently completed a large-scale survey to find out which tools are most commonly used by venture capital firms.

Early Stage 60

Early Stage Technical Review Software Review Venture Capital 60

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. But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

FEBRUARY 16, 2017

I hear tons of ideas for early-stage apps. 12m on a $60m for an early-stage business is a not a bet that most LA firms could or would take. My job as a VC isn’t to beat myself up or any other partner up for the one deal we didn’t do. I simply couldn’t see it. I should have.

IPO 214

IPO Los Angeles Technical Review Silicon Valley 214