Both Sides of the Table

SEPTEMBER 22, 2012

After all, growth equals high valuations and loads of venture capital! Instant growth = huge valuation from follow-on investors = big VC mark-up on our quarterly reports = LP interest. Startups will continue to be aggressive in spamming us in our Facebook timeline. And headlines. And approbation. Grow or die.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Steve Blank

NOVEMBER 2, 2021

In class 1 , we learned that national power is the combination of a country’s diplomacy (soft power and alliances), information/intelligence, military power, economic strength, finance, intelligence, and law enforcement. This “whole of government approach” is known by the acronym DIME -FIL.

Technical Review 407

Technical Review Taiwan Technology Artificial Inteligence 407

Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. Some thoughts on raising angel money. So let me weigh in more loudly than in the past.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Startup Professionals Musings

JUNE 11, 2022

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. Hopefully you can see from this list that the people and processes involved in financing a nonprofit have little in common with angel investors, or the venture capital process. Individual and institutional philanthropy.

Angel Investor 327

Angel Investor Equity Technical Review Exit Strategy 327

VC Cafe

FEBRUARY 27, 2024

While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. Lower valuations and follow on valuation sensitivity – fundraising is a recurring event in the life of a startup. Pre-seed tends to be about developing an MVP and generating early traction.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Up and Running

DECEMBER 16, 2021

In order to avoid formal valuation report costs, shareholders utilize benchmarks of the industry and rules of thumb to estimate the ballpark values of their interests. This article will cover all about the rule of thumb business valuation approaches, when to use them, and their pros and cons. Rules of thumb and business valuation.

Valuation 86

Valuation .Net Metrics Balance Sheet 86

Both Sides of the Table

MAY 28, 2018

Every VC knows that the amount you raise is often a proxy for your valuation. So when you say $8–10m is your goal and you aren’t at all thinking about your valuation know that a VC hears “$24–40 million pre-money valuation expectations.” In the next post I’ll give some advice on how to talk about valuation when a VC asks.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

JUNE 28, 2018

Until recently it was headquartered 2 blocks from our offices in Santa Monica so we literally saw it emerge under our feet and we proudly invested in the last 3 rounds of financing. How could Bird really be worth the reported $2 billion valuation that I read about in this press? Forget the valuation?—?I

San Francisco 256

San Francisco Valuation Los Angeles Technical Review 256

SoCal CTO

JANUARY 5, 2011

Both Sides of the Table , July 22, 2010 An updated Digital Trends presentation - Jeff Hilimire , June 2, 2010 I do what I hate - Jessica Mah , January 7, 2010 Startup Equity Allocation - charliecrystle.com , January 11, 2010 When good investment decisions end up backing more women CEOs: Conversation with Cameron Lester at Azure Capital.

Silicon Valley 378

Silicon Valley Startup Term Sheet Venture Capital 378

Both Sides of the Table

MARCH 1, 2011

Advice on startups raising capital: if you raise your first round at a super high valuation and don’t grow into your valuation, it makes it very hard to live for the long game. With an early, high valuation, eventually you will have to raise extra money because you will need time to grow into your valuation.

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Steve Blank

JULY 11, 2017

Before the rapid rise of Unicorns, (startups with a valuation over a billion dollars), when boards were still in control, they “encouraged” the hiring of “adult supervision” of the founders after they found product/market fit. Adult Supervision.

Part-Time VPE 329

Part-Time VPE Liquidity Event Stock Engineer 329

Both Sides of the Table

MARCH 3, 2012

But it was early 2009 and not many companies were getting new financings at all so I thought they should take the deal. The truth is that I wasn’t as valuation sensitive as my original VC partner was and I would have been willing to raise price. The company agreed on a price but felt it was a bit lower than they had hoped for.

Term Sheet 356

Term Sheet Silicon Valley Reputation Partner 356

Both Sides of the Table

MAY 4, 2013

As an early-stage investor that is not always aligned with my goal, which I would express as, “pay the right price for the stage & risk in a way that is fair to the founders yet preserves our ability to grow into our valuation at the next financing event.” I normally advise “ Raising at the Top End of Normal.”

Deal Flow 347

Deal Flow Early Stage Investment Bankers Technical Review 347

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. Try charging customers for your product when you have 12 competitors giving the product away free finances by $20 million of VC. The Exit Problem.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

A Smart Bear: Startups and Marketing for Geeks

MARCH 21, 2017

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. Remember this is revenue , not valuation. Large companies don’t acquire small companies for their financials. Zoom out to see the strategic decision.

Balance Sheet 242

Balance Sheet Vertical Acquisition Revenue 242

Both Sides of the Table

FEBRUARY 12, 2019

why the hell has seed financing declined so much in the past 3 years?? Over the past month a colleague ( Chang Xu ) and I sifted through data on the venture capital industry (as we do every year) and made a bunch of calls to VCs and LPs to confirm our hypotheses. thus the rise of “pre seed” investing).

Venture Capital 328

Venture Capital Technical Review Seed Stage IPO 328

The Startup Magazine

OCTOBER 18, 2024

The decentralized finance landscape is constantly shifting, with new projects, innovations, and risks emerging regularly. Comparing the mCap/TVL ratio across protocols provides insights into their relative valuations. Lower ratios generally imply healthier valuations and may suggest a more stable investment opportunity.

Metrics 155

Metrics Valuation API Distribution 155

Startup Professionals Musings

SEPTEMBER 8, 2019

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. Hopefully you can see from this list that the people and processes involved in financing a nonprofit have little in common with angel investors, or the venture capital process. Individual and institutional philanthropy.

Equity 235

Equity Angel Investor Technical Review Exit Strategy 235

Steve Blank

OCTOBER 24, 2017

A 20th century VC was likely to have an MBA or finance background. This allows founder(s) to sell part of their stock (~10 to 33%) in a future round of financing. As long as the CEO’s behavior affects their employees not their customers or valuation, VCs often turn a blind eye. 4. Founder-friendly VCs.

Founder 281

Founder Technical Review CTO Hire IPO 281

The Startup Magazine

JANUARY 14, 2020

Higher asset valuation – growing awareness about the environment; the social impact of buildings and the need to meet sustainability credentials is increasingly making real estate investors and occupiers turn to green buildings. Besides renewable energy, Tweed’s business interest spans sectors like finance and real estate.

Green 172

Green California Government Valuation 172

Both Sides of the Table

MARCH 21, 2013

It also is a great way to finance your business without facing dilution before you actually raise venture capital and when the valuation you might get from angels is less than you’d want. So it wouldn’t bother me if 90% of your year-one revenue was PS provided it was done with a specific plan for year-2 software sales.

Software Review 321

Software Review Software IP Technical Review 321

Both Sides of the Table

MAY 4, 2013

As an early-stage investor that is not always aligned with my goal, which I would express as, “pay the right price for the stage & risk in a way that is fair to the founders yet preserves our ability to grow into our valuation at the next financing event.” To all my banking friends … I’m not a hater.

Early Stage 361

Early Stage Deal Flow Investment Bankers Technical Review 361

Startup Professionals Musings

SEPTEMBER 15, 2012

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. Hopefully you can see from this list that the people and processes involved in financing a non-profit have little in common with angel investors, or the venture capital process. Individual and institutional donations.

Angel Investor 218

Angel Investor Technical Review Exit Strategy Equity 218

Both Sides of the Table

OCTOBER 12, 2014

” If you invested at $8m pre-money and put $2m in (thus you own 20% of a company at a $10m post-money valuation) and if you put another $2m into a round at a $40m valuation raising $10m ($50m post) you end up with half your money at $8m pre and half at $40m pre thus your average price goes up dramatically. Thus begins the dance.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Startup Professionals Musings

OCTOBER 13, 2013

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. Hopefully you can see from this list that the people and processes involved in financing a non-profit have little in common with Angel investors, or the venture capital process. Individual and institutional donations.

Equity 207

Equity Angel Investor Technical Review Exit Strategy 207

The Startup Magazine

AUGUST 11, 2023

The following is a condensed explanation of seed funding: Seed money is a form of early-stage financing that new businesses receive from investors in exchange for a share of ownership in the company. The term “seed financing” refers to the stage of funding that comes from first equity. What exactly is the seed funding?

Seed Stage 147

Seed Stage Technical Review Early Stage Due Diligence 147

Both Sides of the Table

APRIL 18, 2019

The valuations were too high! This is only true when: 1) there is funding available to finance short-term losses and 2) when there is a lucrative positive unit-economics business when you become the winner. Act III was the “I told you so” comeuppance of anybody who we sure that the electric scooter market would fail.

South America 250

South America Global New York City Software Review 250

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Steve Blank

MARCH 31, 2014

Cheered on by finance professors, Wall Street analysts, investors and hedge funds, companies have learned how to make metrics like Internal Rate of Return look great by one; outsourcing everything, two, getting assets off their balance sheet, and three only investing in things that pay off fast.

Private Equity 330

Private Equity Metrics China Intellectual Property 330

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. The terrible consequence is that some great companies struggle to get financed. Start early.

Burn Rate 150

Burn Rate Cap Table Dilution Startup 150

Both Sides of the Table

FEBRUARY 27, 2019

Very few people turn up with a strong sense of “what we should be doing” or ready to lean into a productive conversation The financials were prepared by the VP of Finance / CFO. The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. There are too many pages. The meeting starts.

Stock Options 226

Stock Options Metrics Stock Valuation 226

Both Sides of the Table

JANUARY 22, 2014

I’ve watched VCs help with valuation support (spreadsheets, comps) on next round financing, participate in M&A meetings, interview senior job candidates – even help terminate tricky senior hires. There are times you just need help getting s**t done.

Portfolio 364

Portfolio Chicago Sales Incubator 364

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

View from Seed

MAY 2, 2019

But prior to actual data, valuation ends up being driven entirely by demand, competition, and ownership targets. Because of this, some founders with a lot of prior success can raise a $5M+ series A as their first round of financing pre-traction.

Early Stage 214

Early Stage Dilution Valuation .Net 214

ReadWriteStart

JUNE 1, 2020

If you are facing any problem you can always check out this: Business Loan vs. Equity Financing. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Point number 3: Never raise money with an increased valuation. Stages of Equity-based funding. ? Inception stage.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

View from Seed

SEPTEMBER 13, 2018

Effective) post-money valuation. Even though the traction milestone is the same, the history is not, and that context will meaningfully alter the ability to successfully raise a solid Series A financing. How much time has elapsed since company founding. How much total capital has been put into the company since founding. raise $1.8M

Seed Stage 136

Seed Stage Post-Money Valuation Valuation Startup 136