Finance, Pay to Play and Startup

“Sanzo is at its best when we serve as a bridge across cultures for both AAPI and non-AAPI.” CEO Sandro Roco on building a beverage startup, what to avoid in influencer deals, & protecting the brand.

Hunter Walker

OCTOBER 14, 2024

I was working at a venture-backed apparel startup for 4 years and saw the power of building digitally-native brands through Facebook and Instagram (TikTok was still nascent). What was it like seeing some folks raise tens of millions of dollars, and where has your financing mostly come from? We don’t “pay to play”.

New York City

New York City Hockey Stick Distribution Angel Investor

Why LP’s Passed on Seed Funds 10 Years Ago (And What’s Happened Since)

View from Seed

JANUARY 13, 2021

What has happened is that over the last 10 years, the vast majority of successful startups have raised some sort of a seed round prior to a series A. It’s that when things go south, seed funds will have a hard time defending themselves against larger funds that might do a recap or put in a pay-to-play. There are a few reasons.

Dilution

Dilution Later Stage Portfolio Technical Review

Cram Down – A Test of Character for VCs and Founders

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. They’re Back.

Cram Down

Cram Down Founder Venture Capital Recapitalization

28 Entrepreneurs Explain The Future Trends They See in Their Industry

Hearpreneur

JANUARY 20, 2021

4-Rise of individuals deciding to launch startups. The trend I see in our industry is a continued rise of individuals deciding to launch startups and embrace entrepreneurship. 24- Personal finances awareness. Thanks to Josh Stomel, Turbo Finance ! #25- This will be a trend in the finance industry in 2021.

Entrepreneur

Entrepreneur United States Software Review Technical Review

Angel Investing 4 – Why You Need Deep Pockets to Win Big

Both Sides of the Table

SEPTEMBER 16, 2010

I know some people think the whole market has been disrupted and startups and funding work differently these days. Deep pockets – In the previous posts I’ve compared tech startup investing with poker taking analogies of The Big Short & Delivering Happiness. Pay to play. This is actually the norm.

Cap Table

Cap Table Angel Investor Liquidation Preference Deal Flow

Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing. Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.

Term Sheet

Term Sheet Valuation Dividend Liquidation Preference

VC Optimism Returning But More Pain Ahead In Their Portfolios

Hunter Walker

AUGUST 8, 2023

The number of startups who raised money beyond the ‘Unicorn’ benchmark grew so dramatically before the 2022 reset that there is just simply farther to fall when many of these fail to grow into their targets, or disappear completely. Restructures, Down Rounds, and Pay to Plays. Valuations.

Portfolio

Portfolio Cap Table LP Valuation

What Most People Don’t Understand About How Startup Companies are Valued

Both Sides of the Table

FEBRUARY 14, 2016

” “Mark has a vested interest in talking down valuations of startups.” Most prefer not to say this publicly for two reasons: 1) they have an entire portfolio of startups, many of whom are raising capital and 2) they prefer not to be attacked publicly or seem “anti entrepreneur.” goes into a startup.

Valuation

Valuation Down Round Startup Later Stage

Founder Interview: Felix Shipkevich and the Disruption in LegalTech

The Startup Magazine

AUGUST 2, 2019

As part of The Startup Magazine Founder Interview Series , we interviewed Mr. Felix Shipkevich. He has some great advice for startups and businesses of all size. Consumers rely on search engines and pay-to-play rating sites to find legal counsel. Raising capital is an exciting stage for any startup.

Founder

Founder New York City Cofounder Bankruptcy

Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. Until you are consistently generating positive cash flow, you depend on someone else for financing.

Cap Table

Cap Table Down Round Liquidation Preference Founder

Angel Investing: Skill 3 – Relationships with VCs

Both Sides of the Table

SEPTEMBER 15, 2010

Paul Kedrosky made the case for “naive optimism&# being an important part of startup success. I know that in late 2010 it’s not as popular to say this because we’re in the era of “super angels&# and feel-good startups. Tags: Startup Advice Tech Market Analysis VC Industry. So where are we now?

Angel Investor

Angel Investor Early Stage Cap Table Deal Flow

Motivating Existing Investors

ithacaVC

JUNE 28, 2011

Let’s take the following hypo: you are the CEO of Company XYZ, and you just raised $2mm in a Series A financing. In the financing there are 3 institutional investors and 4 high net worth individuals. Let’s assume that future equity financings will be needed as usually is the case. Here are few: 1.

Warrant

Warrant Common Stock Liquidation Preference Institutional Investors

Angel Investing: Skill 3 – Relationships with VCs

Both Sides of the Table

SEPTEMBER 14, 2010

Paul Kedrosky made the case for “naive optimism&# being an important part of startup success. I know that in late 2010 it’s not as popular to say this because we’re in the era of “super angels&# and feel good startups. Tags: Startup Advice Tech Market Analysis VC Industry. Not everybody agreed.

Angel Investor

Angel Investor Cap Table Early Stage Deal Flow

Startup Founder Agreements

blog.simeonov.com

FEBRUARY 22, 2010

I have been thinking a lot recently about how to apply agile development principles to investing and key aspects of startup development such as team building. The first post is about agile startup fundraising. The follow-on post is about agile startup team building. If you’ve read and liked these posts, let others know.

Founder

Founder Vesting Agile Startup

Know the Mindset

ithacaVC

FEBRUARY 20, 2011

It may explain why Fund Y tries to protect itself, via deal terms, from pay to play provisions that would kick in with respect to future financings.

Bridge Financing

Bridge Financing IPO Pay to Play Finance

What Are the Rights of Minority Stockholders?

Scott Edward Walker

JULY 27, 2011

Introduction For the past few months, I’ve been discussing the rights of VC investors in connection with preferred stock financings, including the following: liquidation preferences anti-dilution provisions dividends Board control protective provisions drag-along provisions pay-to-play and pull-up provisions conversion rights redemption rights All (..)

Delaware

Delaware Liquidation Preference Redemption Los Angeles

Was Launch the right platform to Launch?

Professor VC

MARCH 11, 2013

Investors and press would flock to the desert to see future hot startups unwrap their products and mature tech companies show off their latest and greatest. I'm surprised it is still around in 2013, but am sure the selectivity criteria has changed to whoever is willing to pay. 6 minutes on stage were truly a CEO's 15 minutes of fame.

Silicon Valley

Silicon Valley San Francisco Social Network SEC

No Mess (Too Much Liquidation Preference)

ithacaVC

DECEMBER 14, 2011

The “no mess” LP issue relates to investors in later rounds of financing (typically Series C and beyond). ” It may require a pay to play round that forced non-participants to convert to common (thereby lowering the aggregate LP) as an example. Ok, enough of the background. Things can get very ugly quickly.

Liquidation Preference

Liquidation Preference LP Preferred Stock Liquidity Event

StartUpRoar

“Sanzo is at its best when we serve as a bridge across cultures for both AAPI and non-AAPI.” CEO Sandro Roco on building a beverage startup, what to avoid in influencer deals, & protecting the brand.

Why LP’s Passed on Seed Funds 10 Years Ago (And What’s Happened Since)

Trending Sources

Cram Down – A Test of Character for VCs and Founders

28 Entrepreneurs Explain The Future Trends They See in Their Industry

Angel Investing 4 – Why You Need Deep Pockets to Win Big

Term-sheets and Valuations: Thinking about Negotiations - Startups.

VC Optimism Returning But More Pain Ahead In Their Portfolios

What Most People Don’t Understand About How Startup Companies are Valued

Founder Interview: Felix Shipkevich and the Disruption in LegalTech

Founders – Use Your Down Round To Clean Up Your Cap Table

Angel Investing: Skill 3 – Relationships with VCs

Motivating Existing Investors

Angel Investing: Skill 3 – Relationships with VCs

Startup Founder Agreements

Know the Mindset

What Are the Rights of Minority Stockholders?

Was Launch the right platform to Launch?

No Mess (Too Much Liquidation Preference)

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