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2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. That’s the deal you get when you’re raising in a good market for startup financing.
This is the first of a six part series on different methods used by angel investors to arrive at pre-moneystartupvaluations. Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-moneyValuation. (in Then: Post-moneyValuation = Terminal Value ÷ Anticipated ROI.
Free Template for Great Startup Pitch Decks, Direct from VCs. How to Sell Your Startup’s “Secret” Master Plan at the Seed Stage “Articulating and selling your long run vision is important, but trying to convince those that are deeply skeptical about it is simply a mutual waste of time.” ” (Rob Go).
There is much talk these days that startupvaluations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. While there is no “one size fits all” I used to give the advice that you should plan about 4.5
It has been awesome, flattering, and humbling to see that post went viral and has been seen by so many thousands of people — mainly aspiring entrepreneurs — and has been translated into many languages. There’s no time to dicker around at a startup. Startups are hard work. 10M post-moneyvaluation = $100M target.
There were no metrics. Him: On metrics. If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. How do you think they’ll feel if your next round is at a $50 million postmoneyvaluation and their hard-earned $25,000 is worth 0.05% of your company?
The problem is that since the average holding period for an angel investment is around nine years , that means by the time you’ve toted up the returns for 90% of your investments, and subtracted out the time value of money, the one very successful investment in the entire portfolio must return at least *30* times the original investment!
The CEO of a startup must, must, must be the product manager. ” This is someone who has done it before — raised money, done deals, worked with startups. That means if you’re taking money with a $5M post-moneyvaluation, the expectation is that you are building for a minimum $50M exit. $10M
So whereas seed rounds five years ago may have been less than a million dollars on a pre-moneyvaluation of three or four million, today''s seed is up and over a million and usually closer to two million, with postmoneyvaluations nearing $10 million. If you''re worried about the runway, try doing less things.
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. Before we dive into managing cap tables for startups, let’s define what they are. Can we be real? That’s a long list.
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. Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages.
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