Both Sides of the Table

JULY 25, 2010

Any SoCal entrepreneur raising early-stage money should put Rincon on their short list. He covers this is the first 15 minutes or so of the video and he’s awesome to listen to (more than 25,000 people have listend to this video so far – mostly entrepreneurs ;-)). It is how angel rounds come together.&#.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

The Next Web

DECEMBER 30, 2012

If you’re a startup, you are by definition competing with the smartest people in the world – either large companies with more resources than yours or fellow entrepreneurs who are hoping to disrupt large companies. Raising money for a startup from an angel investor : Learn pre-money and post-money valuations are.

Artificial Inteligence 156

Artificial Inteligence Founder Private Equity Ruby 156

View from Seed

SEPTEMBER 13, 2018

Rather, it has been broken into bits of a series of capital raises to reach meaningful milestones… “pre-seed,” “post-seed,” and rounds in between have become the norm. Whether or not this situation is good or bad for entrepreneurs and the ecosystem, it is indeed reality. Effective) post-money valuation.

Seed Stage 136

Seed Stage Post-Money Valuation Valuation Startup 136

ReadWriteStart

JULY 21, 2011

All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us. I say, "Why can't you guys do a $10 million post money valuation?"

Post-Money Valuation 122

Post-Money Valuation Valuation IPO Venture Capital 122

Lightspeed Venture Partners

OCTOBER 7, 2012

This does neither, so I’m out” Cuban said, “I see you guys not as entrepreneurs but as wantrepreneurs” I agree with him. In this way, they remind me of the Lifter Hamper entrepreneur. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

View from Seed

MARCH 24, 2021

But mainly we did it because these corporate VCs were among the only groups willing to invest at PayPal’s somewhat inflated post-money valuation, during the middle of the dot-com crash when traditional VCs pulled back sharply and other sources of funding were constrained.” ” (Lee Hower). ” (David Beisel).

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

Both Sides of the Table

FEBRUARY 15, 2016

As I have pointed out in previous posts , 91% of VCs surveyed believe prices are declining (30% believe substantially) and 77% believe that funding will take longer than it has in the past. I’m surprised how few entrepreneurs have this open conversation with their investors. Wouldn’t you rather know where you stand?

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Agile VC

APRIL 17, 2011

Post-money valuation probably no higher than $12M (2). Im a former Silicon Valley entrepreneur turned East Coast VC. round closed in June 2004. Led by General Catalyst with participation by co-founders Steve Hafner & Paul English. liquidation preference, 6% accumulated dividend (1). Series A-1 Preferred. Read More ».

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Covenant Cap Table 49

Startup Professionals Musings

SEPTEMBER 14, 2010

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board. Marty Zwilling.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Startup Professionals Musings

JANUARY 27, 2012

Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received. It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 223

Both Sides of the Table

MAY 30, 2018

One of the hardest things about the fund-raising process for entrepreneurs is that you’re trying to raise money from people who have “asymmetric information.” As an entrepreneur it can feel as intimidating as going to buy a car where the dealer knows the price of every make & model of a car and you’re guessing at how much to pay.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

betashop.com

OCTOBER 8, 2012

On October 27, 2010 I wrote a blog post about the “ 57 Things I Learned Founding 3 Tech Companies.”. It has been awesome, flattering, and humbling to see that post went viral and has been seen by so many thousands of people — mainly aspiring entrepreneurs — and has been translated into many languages. spy liked this.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Both Sides of the Table

NOVEMBER 4, 2009

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X&# or not. Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Your A round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Rob Go

AUGUST 29, 2016

Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation. Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

www.mint.com

MARCH 9, 2010

What is the post-money valuation of your last round? Post-money valuation” is the value of the company after the last round of money was put in (again, lines of credit and promises don’t count). I like all these points, and some of them are quite clear, like money and revenue.

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

Both Sides of the Table

MAY 13, 2013

And a few teams of super talented, educated and bright entrepreneurs make a few mill. It has even gone so far that we now have evocative headlines in the tech press such as “ Buy or Die ,” which is what got me thinking about this post. But that’s not how you make money in the venture capital business.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Gust

OCTOBER 17, 2011

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 158

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. I stopped the negotiation confusion years ago.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

AUGUST 1, 2010

Many firms do it in a way that can be more detrimental to entrepreneurs. If you don’t understand the concept of “signaling&# please read the blog post I wrote on Understanding VC signaling. I’ve done 4 seed investments in the past year and they are 100% referenceable. This is the nature of compromise.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). at 1/3 of its original post-money valuation), then if the investor owned common shares (or preferred shares without the liquidation preference), then they would receive back $1,666,666 of their original $5,000,000 investment.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Agile VC

DECEMBER 6, 2012

I was talking with an entrepreneur recently about this phenomenon. Well at this juncture Startup X’s valuation is presumably a lot higher than it was at the Series A, maybe even 5-10x+ higher. VC’s reserve strategy, time horizon, etc). ==.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Lightspeed Venture Partners

OCTOBER 1, 2012

Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. Price is always a consideration in investing, but particularly so if the entrepreneurs have shown an interest in an early exit. The entrepreneur was seeking $100k for 20% of the company. FUZZI BUNZ.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. It’s like we need a finance 101 course for entrepreneurs.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

The Equity Kicker

APRIL 10, 2015

From the perspective of existing investors the right way to calculate the valuation multiple is to compare the pre-money valuation of the new round with the post-money valuation of the last round, which is the same as the increase in share price. (As This is best explained with a fictitious example.

Valuation 60

Valuation Pre-Money Valuation Post-Money Valuation Option Pool 60

The Startup Lawyer

OCTOBER 9, 2010

Good luck trying to convince even the most nascent of startups to take your investment at around a $100k post-money valuation. b) Office space is a nice kicker, but no entrepreneur is going to give up equity in their mobile app startup company for office space.

Dallas 91

Dallas Seed Capital Incubator Post-Money Valuation 91

Lightspeed Venture Partners

NOVEMBER 12, 2012

When asked why the company is worth a $1M post money valuation, he said, “What it comes down to is passion.” All entrepreneurs have passion. All the sharks passed, some with very harsh words for the entrepreneur and the idea. ” The sharks actually laughed in his face when he said that.

Valuation 107

Valuation Post-Money Valuation Viral Algorithm 107

VC Adventure

NOVEMBER 14, 2012

This is anecdotal – I’ll try to validate it when the numbers are released – but where companies used to raise $3- $ 5M for their Series A, one response to higher valuations has been a much larger number of companies raising larger and larger Series A rounds (say $ 6M - $ 10M ). And spend accordingly.

Balance Sheet 76

Balance Sheet Valuation Post-Money Valuation Early Stage 76

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. So they recapitalize the company.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

ithacaVC

JANUARY 14, 2014

I was giving some advice the other day on how to approach Series B investors in terms of valuation. Company X raised its Series A at a pre-money valuation of $5mm and it raised $4mm dollars. So the post-money valuation after the Series A was $9mm. What should the pre-money valuation be for the Series B?

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

Seeing Both Sides

JULY 15, 2009

Thus, the universe of financings that even the most experienced entrepreneurs get directly exposed to is typically 5-10 financings over a 15-20 year career. Year in, year out, Thus, VCs and entrepreneurs are not operating on an equal playing field when it comes to negotiating financings and interpreting the impact of the terms involved.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Feld Thoughts

JUNE 2, 2015

The other day, Mark Suster wrote a critically important post titled One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes. There are also some law firms whose standard documents are purposefully ambiguous to give the entrepreneur theoretical negotiating flexibility in the first priced round.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

Rob Go

MAY 20, 2014

The end result though is that the dynamics around series A rounds has started to seem pretty murky for entrepreneurs. Below are some broad guidelines on the major topics around series A’s that I hear entrepreneurs thinking about. There are broadly three buckets of series A’s, and therefore, three valuation buckets.

Valuation 76

Valuation Dilution Post-Money Valuation Syndicate 76

Feld Thoughts

FEBRUARY 9, 2016

And, rather than rational and helpful thoughts for entrepreneurs, it often brings out the schadenfreude in even the most talented people. Mark’s post is one of the first in this cycle that I’ve seen from a VC giving clear, actionable advice. We entrepreneurs have been spinning that line for decades in every boom cycle.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

VC Adventure

NOVEMBER 14, 2012

This is anecdotal – I’ll try to validate it when the numbers are released – but where companies used to raise $3-$5M for their Series A, one response to higher valuations has been a much larger number of companies raising larger and larger Series A rounds (say $6M-$10M). And spend accordingly.

Balance Sheet 48

Balance Sheet Valuation Post-Money Valuation Early Stage 48