Both Sides of the Table

MAY 30, 2018

What was the post money on your last round (and how much capital have you raised)? It’s not uncommon for a VC to ask you how much capital you’ve raised and what the post-money valuation was on your last round. If a VC prices a flat or down round it means that management teams are often taking too much dilution.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

This is going to be BIG.

MARCH 28, 2021

Consider the first money you ever take from VCs. 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. Well, what if I actually started looking at your net worth on paper given those valuations? million from investors.

Founder 142

Founder Post-Money Valuation Dilution Valuation 142

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

Agile VC

DECEMBER 6, 2012

A little more inside baseball from the VC biz… why VC’s rarely make “crossover” investments, with capital from multiple funds the VC firm manages invested in a single startup (see note 1). I was talking with an entrepreneur recently about this phenomenon.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

ithacaVC

APRIL 25, 2014

The green box at row 45 just provides a nice double check on post-money valuation calculations. If it takes a week to show up in my inbox I assume that the management team was not well prepared to pitch in the first place. Dealing with VCs Management Startup Life' Ask any questions in the comments.

Cap Table 79

Cap Table Preferred Stock Pre-Money Valuation Participating Preferred 79

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. Dealing with VCs Management Startup Life'

Pre-Money Valuation 58

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

Berkonomics

APRIL 6, 2012

Is the price paid for shares by previous investors excessive, creating a post-money valuation too high for the actual value of the company? These include “tag along rights” which allow investors to sell some shares when others, such as management or founders, sell any shares.

Limited Liability Company 79

Limited Liability Company Post-Money Valuation Valuation Down Round 79

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. Maybe significantly. But I think think this is a mistake.

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

betashop.com

OCTOBER 8, 2012

The CEO of a startup must, must, must be the product manager. Use a bug tracking system and religiously manage development action items from it. . That means if you’re taking money with a $5M post-money valuation, the expectation is that you are building for a minimum $50M exit. $10M

Post-Money Valuation 92

Post-Money Valuation Valuation Dilution Cofounder 92

Board Effect

MAY 13, 2019

Let’s not waste time listing everything startups could be doing to more effectively manage their cap tables. When it comes to cap table management in startup companies, it’s unrealistic to expect perfection. The realistic demands of cap table management will increase as your business grows and matures—that much is a no-brainer.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Seeing Both Sides

JULY 15, 2009

That is, if a company raises $4 million at a pre-money valuation of $6 million, then the post-money is $10 million. The investors who provided the $4 million own 40% of the company and the management team owns 60%. Another term that impacts the price is the size of the option pool. In other words, they have a $4.4

Pre-Money Valuation 49

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

VC Cafe

NOVEMBER 1, 2019

Perhaps it’s the product manager in me that gets a kick out of figuring out how do they do onboarding? Could use more love: Not very intuitive to get started (but good help section and template list) Potential concerns about privacy (especially for cloud document management and sensitive information). I love trying new products.

Wiki 68

Wiki San Francisco Post-Money Valuation Cloud 68

Berkonomics

MARCH 28, 2019

First: Is the price paid for shares by previous investors excessive, creating a post-money valuation too high for the actual value of the company? These include “tag along rights” which allow investors to sell some shares when others, such as management or founders, sell any shares.

Limited Liability Company 48

Limited Liability Company Post-Money Valuation Valuation Down Round 48

Haystack

APRIL 10, 2018

As evidenced by today’s investor panel which included managers who focus on pre-seed, or traditional seed, or larger VC funds that can go from seed all the way to growth. with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded.

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Both Sides of the Table

SEPTEMBER 28, 2014

But the biggest thing to know is this: Companies who are scaling quickly in revenue and with a high gross margin often should invest as much capital in growth as they can manage responsibly because when you find a product / market fit and your company is growing at a very fast scale you want to capture market share before competition sets in.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

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. Maybe significantly. But I think think this is a mistake.

Balance Sheet 48

Balance Sheet Valuation Post-Money Valuation Early Stage 48

ithacaVC

JANUARY 24, 2013

In our example, if the premoney is $3mm and the Series A new investors are putting in $1mm, then they expect to own 25% of the company after the closing ($1mm invested/$4mm post money). It can get painful so make sure to manage your expectations. So the new Series A investors end up with 24.4% ($1mm/$4,094,625).

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

Seeing Both Sides

JANUARY 11, 2011

If different investors have invested at very different prices, or if the entrepreneur has not made money before and this is their first shot, there can be greater tension inserted into a naturally tense situation. 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

Altgate

DECEMBER 18, 2008

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Holiday Cards Year End Management Changes → The 3X Liquidation Preference Is Back! But non-management employees and founders will be thrown table scraps and crushed down. Bookmark the permalink.

Liquidation Preference 31

Liquidation Preference Venture Capital Post-Money Valuation Participating Preferred 31

Board Effect

MAY 10, 2019

Cap tables list a company’s authorized and outstanding shares, the parties to which those shares have been assigned, and the various metrics relevant to managing them. Raising investment capital means raising the stakes on managing a cap table. What is a cap table? Dilution: Equity Value & Percentages.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

www.paulgraham.com

APRIL 28, 2010

2 ] When you negotiate terms with a startup, there are two numbers youcare about: how much money youre putting in, and the valuation ofthe company. The valuation determines how much stock you get. Ifyou put $50,000 into a company at a pre-money valuation of $1million, then the post-money valuation is $1.05

Angel Investor 63

Angel Investor Syndication Syndicate Dilution 63

Professor VC

FEBRUARY 12, 2015

Those that managed companies in 2008 or thirteen years ago in 2001 know exactly how fear feels. In 2008, I made an investment offer of $250K for approximately 38% of the company ($400,000 pre-money valuation). The current valuation of $2B is 3,000X the proposed post-money valuation of that seed term sheet.

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

Seeing Both Sides

NOVEMBER 30, 2008

For the last five years, it was not atypical for a high-quality Series A company that raised an initial round of capital priced at, say, $5 million on a $5 million pre-money valuation to hit a few important milestones (e.g., Today, those financings are simply not happening.

Pre-Money Valuation 20

Pre-Money Valuation Portfolio Post-Money Valuation Valuation 20

www.mint.com

MARCH 9, 2010

Mint is the best way to manage your money. 2 comments Mint Life Know your money. 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).

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

Both Sides of the Table

AUGUST 1, 2010

The investor strategy is really determined by the management team. If we come to an agreement and fund the HUGE benefit to entrepreneurs is that they don’t have to trek up and down Sand Hill Road looking for money. If we can come to an agreement we will either lead the round ourselves or partner with other investors.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Ben's Blog

JULY 16, 2013

In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation. Things change.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Ben's Blog

JULY 16, 2013

In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation. Things change.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

Berkonomics

NOVEMBER 27, 2024

First: Is the price paid for shares by previous investors excessive, creating a post-money valuation too high for the actual value of the company? These include “tag along rights” which allow investors to sell some shares when others, such as management or founders, sell any shares.

Limited Liability Company 62

Limited Liability Company Post-Money Valuation Valuation Down Round 62