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Precise valuations are impossible to determine because of adjustments to employee optionpools, possible buybacks of common stock, etc. How to Evaluate Firms for a Seed VC Syndicate 10 July 2012, 5:13 pm What A VC Orders for Breakfast Says 27 June 2012, 10:16 am To Leave or Not to Leave as Your Startup Grows 12 June 2012, 12:21 pm.
In contrast, there is limited benefit for being the 2 nd investor or the 10 th investor joining the syndicate of a priced round, so it is common for investors to wait to see “who else is involved”. The CEO/founder often has leeway to influence or negotiate the cap value (especially when the headline cap is softened by a discount).
Some angel investors join together in syndicates. Theyleave 20% as an optionspool for later employees (but they setthings up so that they can issue this stock to themselves if theyget bought early and most is still unissued), and the three founderseach get 25%. So after this the optionpool is down to 13.7%). [
I use the vendors of PE/VC investing data I listed above to track the interests of potential private equity/VC coinvestors, and selectively introduce investee companies as we build out a syndicate. . I’ve seen other VCs use Bridge to more efficiently make and track introductions. .
One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial optionpool. My facebook can beat up your facebook.
In fact, in this new fundraising environment (with syndicates on AngelList , etc.), The goal is to get one of these investors to be your “lead” or “anchor” (the one putting in the most money), who will take ownership of the deal and be there during thick and thin. your lead may be able to make the deal happen very quickly.
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