Genuine VC

NOVEMBER 12, 2012

Dharmesh Shah had a great post up last week about the lessons learned from raising a mezzanine round of financing. But the more meaningful reason that early financing terms endure into future rounds is that negotiation away from terms already in place are just that – negotiation. In contrast, valuation always has room to move up.

Finance 128

Finance Mezzanine Valuation Seed Stage 128

Genuine VC

MAY 29, 2014

Yet even today, whether or not to take a (relatively) small check in a seed round syndicate from a multi-hundred million or even billion dollar fund is still a decision which takes quite a bit of consideration and sometimes consternation. So there is an element of (positive) selection bias in the larger VC syndicate cohort companies.

Syndicate 166

Syndicate Syndication Seed Stage Valuation 166

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. I have not found a thorough platform for due diligencing all aspects of a potential investment.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Feld Thoughts

DECEMBER 10, 2014

So – I’ll start with that – this is not a prediction, rather it’s a hypothesis, which is as long as there isn’t a cataclysmic macro event, Q115 financing activity is going to be insane. The number of large, “later stage” financings are remarkable – both in size and velocity.

Later Stage 142

Later Stage Syndicate Syndication Portfolio 142

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Feld Thoughts

APRIL 29, 2015

Now that everyone is overly focused on unicorns, the headline number on the valuation (e.g. Company X raised Y at a valuation of Z from A, B, and C) has crept into the story on big rounds. No understanding of the human dynamics behind the financing. No underlying metrics that drive the financing. financing of Mattermark.

Atlanta 70

Atlanta Valuation Term Sheet Finance 70

Babbling VC

JANUARY 7, 2011

I personally believe that one of the major drawbacks to venture capital in Europe is chronic under-financing and people skirt around this issue. Hence, financing rounds have been smaller (roughly a ratio of 5 to 1 when comparing US to EU). At the same time, businesses in Europe have always been forced to make do with less.

Finance 76

Finance LP Europe Valuation 76

View from Seed

AUGUST 20, 2014

Series A Dynamics: This is a middle-of-the-road outcome in terms of optimizing your next round of financing. If the company is doing really well, the VC will have an incentive to try to do more of the next round at perhaps not the highest possible valuation. Their aggressiveness sends a signal to the market.

Startup 301

Startup Syndicate Syndication Boston 301

Feld Thoughts

AUGUST 10, 2010

My partner Seth Levine has a detailed post up today titled Trada – from the beginning that describes the creation and financing of Trada. In this case neither Niel (nor I) had any interest in creating a traditional syndicate to fund the company. Tags: Seed Financing angel financing Foundry Group seed trada VC.

Syndicate 120

Syndicate Syndication Angel Financing Finance 120

View from Seed

JANUARY 26, 2016

There are a number of factors that have contributed to the rise of pre-seed rounds, but the strongest have been the frothy late-stage financing market, coupled with both the scaling-up of some of the early winners in the institutional seed ecosystem and the scaling-down of some larger funds that retrenched after the financial crisis.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Berkonomics

DECEMBER 17, 2020

Let’s take a few minutes to examine the kind of equity financing available to small or early stage businesses. Some can supply more when syndicating with other such groups. These firms will continue to finance the company without VC money required, and in return keep the capital structure simple for the life of the company.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Feld Thoughts

JULY 14, 2015

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. The term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless.

Recapitalization 70

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

Professor VC

APRIL 1, 2010

One comment made by Jason was that angels tend to be less sensitive than VCs on valuation and can potentially make it difficult to get a venture financing done at acceptable valuation. We are typically looking at either smaller exits or require a lower valuation to get a reasonable step-up to a venture round. Newer Post.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

View from Seed

JUNE 30, 2015

A few weeks ago, Manu Kumar wrote an excellent post detailing the current state of the seed financing landscape. You may actually need to raise a few financing rounds just to get to a series A, so think about the syndicate you are constructing (will they be loyal to you?), Read it – it’s excellent.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. If you’re confident you’ll get a huge exit, maybe. Angels/Seed Funds v.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

Rob Go

SEPTEMBER 2, 2014

I’ve seen a few cases now where a number of very high-quality institutional investors were interested in investing in a company at valuation, but a non-institutional investor was willing to set terms 1.5 – 2X higher than that valuation. The institutions walked, but the round got done. Alternative funding sources.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

View from Seed

JANUARY 28, 2016

When we talk about seeds, we mean your first outside round of financing at the earliest stages of your business. In my prior post, I talked about the rise of the pre-seed and a more nuanced definition of a pre-seed based on milestones, not financing labels. This staged approach is often much better for the founders as well.

Cofounder 120

Cofounder Finance Founder Syndicate 120

Professor VC

MARCH 12, 2015

It was a great product addressing a large market opportunity and was interested in seeing how the AngelList syndicate process worked. I don''t know the reasons for selling, but presumably Authy felt their prospects weren''t promising as a standalone entity and may have had difficulty raising further financing.

Syndicate 28

Syndicate Syndication Silicon Valley Common Stock 28

Scott Edward Walker

NOVEMBER 26, 2017

In fact, in this new fundraising environment (with syndicates on AngelList , etc.), Indeed, this is critical in order to effectively negotiate any transaction (including a financing) – as every investment banker on Wall Street understands. your lead may be able to make the deal happen very quickly.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

David Teten

NOVEMBER 15, 2013

Each new investor tends to raise valuations and lower returns for all the other competitive investors. This is the psychology that drives VCs to load up a company with more capital, rationalizing that $5m at a $20m pre-money valuation is little different than $10m at a $40m pre-money valuation.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

Professor VC

JANUARY 17, 2008

One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups. Another comment which probably deserves more discussion is around valuation. He also said they typically only invest at a $1 million pre-money valuation or less. My facebook can beat up your facebook.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Cracking the Code

DECEMBER 9, 2006

Done deal: after a quick syndication with the kitchen team (their job was at stake, so they were easy to convince.), Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Yahoo Finance. we bought a $4 measuring spoon with an expected return of 1,000 times in the coming year. My Investments.

Software Review 48

Software Review Technical Review Europe Venture Capital 48

Both Sides of the Table

AUGUST 1, 2010

In these cases we proactively offer to lead their next round of financing. Like Brad Feld I’m syndication agnostic but I have a slight preference toward working with others. How this works: I try to set a price that feels like a fair balance between GRP and the company. This is the nature of compromise.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

mashable.com

MARCH 7, 2011

Partners W3 EDGE Concentric Sky Rackspace Intridea Dynect DNS Webtrends Global Syndication Partners ABCNews Forbes Metro USAToday Yahoo ©2005-2011 Mashable, Inc. Reproduction without explicit permission is prohibited. All Rights Reserved. startupcto

Developer 93

Developer HTML API Ruby 93

Professor VC

JULY 25, 2013

Another area where I''m not sure I stand is with some of the more formal referral and syndication programs that are emerging now. AngelList (which I remain a big fan) also recently launched a syndicate program. In this program, an angel can ask the entrepreneur for an allocation of the round and then syndicate through AngelList.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Rob Go

NOVEMBER 10, 2011

I once showed a company to an investor for an investment we were syndicating. Parting thought #1 – funny enough – in the first example above, the investor actually asked to be kept in the loop for the next round of financing. This investor loved the team and thought the solution they were building was compelling.

Marketing 52

Marketing Angel Investor Syndicate Syndication 52

Austin Startup

DECEMBER 20, 2010

The team has already secured nearly $2 Million in Series A financing from Mike Maples new firm FLOODGATE, and Austin Ventures. The source, size and valuation when funding determines how big of a company you’re claiming to build. So far the news has been covered on TechCrunch , and in the Statesman. That’s exactly the point.

Curation 118

Curation Austin Cofounder Ruby 118

Agile VC

FEBRUARY 2, 2012

I’ll focus for now on the business itself, there’s plenty of other info on the web if you care to understand the equity ownership or financing history of Facebook and frankly this has been fairly well known for awhile. ==. Here’s my first look at Facebook viewed through the lens of their IPO filing. Facebook, Inc.

IPO 100

IPO South Korea Venezuela Revenue 100

Rob Go

JANUARY 7, 2013

We have pretty strong guidelines internally about how much capital we want to invest in a given company, at what valuation, and thus, what ownership we are looking for. Post Revenue: 6 1/2 (the 1/2 is for a company that had revenue, but did a major product pivot as part of the financing). See my recent blog post here for more detail.

Portfolio 49

Portfolio Seed Stage Cofounder B2B 49

Tim Keane

APRIL 12, 2006

What’s your attitude about “next round” financing? valuation than the previous round. If the investors ideal size is smaller than your need, you ought to ask about syndication. If they don’t like to syndicate, or don’t have a track record of doing it, you will want to consider your options. How do you approach valuation?

Entrepreneur 60

Entrepreneur Valuation Sweat Equity Common Stock 60

Professor VC

JUNE 20, 2011

Financing, that is.I One truth of start-up financing is that it generally takes twice as long and twice as much money to accomplish your milestones. Most companies dont come close to their rose colored financial models prepared when going out for Series A financing. As I said up front, I have mixed emotions about the financing.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

Rob Go

JANUARY 28, 2016

When we talk about seeds, we mean your first outside round of financing at the earliest stages of your business. In my prior post, I talked about the rise of the pre-seed and a more nuanced definition of a pre-seed based on milestones, not financing labels. This staged approach is often much better for the founders as well.

Cofounder 28

Cofounder Finance Founder Syndicate 28

Berkonomics

APRIL 3, 2014

We’ve spoken of financing a young company through friends and family, known as “inside angels.” And even though angel groups syndicate their best deals within their respective associated networks, it is always best to apply to the angel groups nearest your physical location. Raising money'

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Feld Thoughts

AUGUST 1, 2018

We are syndication agnostic, being indifferent between investing by ourselves or with co-investors – especially our partner funds – where we mostly have long and successful relationships. We refer to B and C rounds as early growth – essentially financings with valuations between $50m and $300m pre-money.

Syndicate 17

Syndicate Syndication IRR Canada 17

Both Sides of the Table

OCTOBER 18, 2015

Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation. Here is a chart to show you the median valuation of late stage private tech companies compared to traditional growth rounds of capital led by VCs and also vs. the public markets. So eventually rationality has to occur.

IPO 150

IPO Venture Capital LP SEC 150