Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

This is going to be BIG.

MARCH 28, 2021

You go back and forth on a price and you eventually settle on a post-money valuation cap of $6.5mm, meaning you have sold about 23% of your company. The first round is $3mm with a post-money valuation of $10mm, the Series A is $9mm with a post-money valuation of $30mm and so on.

Founder 159

Founder Dilution Post-Money Valuation Valuation 159

Both Sides of the Table

AUGUST 1, 2010

The fact that I invest less just means the company is earlier stage and needed/wanted less or without a product/market fit we weren’t yet prepared to invest more heavily. In these cases we proactively offer to lead their next round of financing. Tags: Startup Advice Tech Market Analysis VC Industry.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). In June of 2000, I raised money at an $820M post-money valuation.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. Go read it now – I’ll wait.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Seeing Both Sides

JULY 15, 2009

VCs have an unfair advantage when it comes to financings. A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). In contrast, the typical venture capitalist, either individually or across their partnership, will do 5-10 financings in any given year.

Pre-Money Valuation 49

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

VC Adventure

NOVEMBER 14, 2012

I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by investors who, despite higher frothy valuations, are looking to hit certain ownership thresholds. Ultimately this takes advantage of the larger raise.

Balance Sheet 76

Balance Sheet Valuation Post-Money Valuation Early Stage 76

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. OK, so microVC funds and smaller pre-seed financings could really be a thing. Um… wow. A number of companies that will go public this year and next (like Dropbox) didn’t raise obscene rounds of funding early.

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). In June of 2000, I raised money at an $820M post-money valuation.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

Seeing Both Sides

JANUARY 11, 2011

With big tech companies awash in cash , nearly every analyst out there is predicting that the M&A market will heat up in 2011. Yet a strong M&A market won't be a panacea for all. But the Series C investor who just invested at an $80 million post-money valuation would be bitterly disappointed.

Post-Money Valuation 40

Post-Money Valuation Dilution Cofounder Valuation 40

VC Adventure

NOVEMBER 14, 2012

I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by investors who, despite higher frothy valuations, are looking to hit certain ownership thresholds. Ultimately this takes advantage of the larger raise.

Balance Sheet 48

Balance Sheet Valuation Post-Money Valuation Early Stage 48

Professor VC

FEBRUARY 12, 2015

For example, Uber ( not a startup but someone should let TechCrunch know ) is private and has a valuation greater than 70% of the Fortune 500. Back in the day, tech companies typically went public at market caps in $100 - $250M range. or a market cap of $800M. Late private and early public investors were richly rewarded.

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

Lightspeed Venture Partners

SEPTEMBER 23, 2012

post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation. The company ended up negotiating with Cuban and settled on $300k for 30% of the company, or a $1M post money valuation.

Pre-Money Valuation 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164