YoungUpstarts

SEPTEMBER 20, 2019

As well as how to work with pre and post-money valuations. Generous is not a word often associated with talking about negotiations between startup entrepreneurs and their investors. It’s often more all about fearing how tough VCs are going to be with their term sheets and ‘standard’ clauses. Generosity is nowhere on their radar.

Technical Cofounder 127

Technical Cofounder Entrepreneur Cofounder Post-Money Valuation 127

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

ReadWriteStart

JULY 21, 2011

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

Post-Money Valuation 122

Post-Money Valuation Valuation IPO Venture Capital 122

The Next Web

DECEMBER 30, 2012

Raising money for a startup from an angel investor : Learn pre-money and post-money valuations are. A few selections: Hedge Funds, Venture Capital, and Private Equity : Similarities in compensation structure for hedge funds, venture capital firms, and private equity investors.

Artificial Inteligence 156

Artificial Inteligence Founder Private Equity Ruby 156

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. and “what was the post-money valuation of your last round?”

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Both Sides of the Table

SEPTEMBER 28, 2014

Simply put – down rounds are very hard to achieve psychologically because insiders fight against them (rightly or wrongly) and outsiders have a mental gap that if your valuation is going down your company is forked up and they often just pass.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

View from Seed

MARCH 24, 2021

Taking Corporate Venture Money: When it Makes Sense “PayPal took on these investors in small part because it gave us an imprimatur in the stodgy and regulated world of financial services. ” (Lee Hower). 7 Common Mistakes Entrepreneurs Make in VC Pitches and How to Fix Them “Different partners in a VC firm are different.

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

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

Both Sides of the Table

SEPTEMBER 25, 2010

Taking it from an investor perspective (not me, angels) I think it’s totally unfair to see early angels invest, take more risk, help you get to the next level through both sweat & money, and then pay a higher price because the round had a convertible note with no cap.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

JULY 22, 2010

How VC’s Calculate Valuation : We walked through a standard deal where you raise $1 million at a $3 million pre-money valuation leading to a $4 million post money valuation.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Startup Professionals Musings

JANUARY 27, 2012

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Seat on the board.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 223

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.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Gust

JUNE 21, 2014

Therefore, if the maximum market cap we can hope for from a company is $2 million at the end of the day, and our investment needs to return 30x, that means the post-money valuation after our investment needs to be $2m ÷ 30, or $66,666.

Angel Investor 127

Angel Investor Post-Money Valuation Valuation Time Value of Money 127

Steve Blank

JULY 19, 2011

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

Post-Money Valuation 255

Post-Money Valuation Venture Capital Valuation IPO 255

The Equity Kicker

APRIL 10, 2015

From the perspective of existing investors the right way to calculate the valuation multiple is to compare the pre-money valuation of the new round with the post-money valuation of the last round, which is the same as the increase in share price. (As

Valuation 60

Valuation Pre-Money Valuation Post-Money Valuation Option Pool 60

Both Sides of the Table

JUNE 5, 2011

I’ve been preaching the “don’t get ahead of your inherent valuation&# message for nearly 10 years. million post-money valuation with no revenue. We had companies pitching us that had almost no revenue at all and they were raising $10-15 million in capital at a $40-50 million pre-money valuation.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Startup Professionals Musings

SEPTEMBER 14, 2010

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Seat on the board.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Both Sides of the Table

JULY 25, 2010

The key to this strategy is getting 5 people who form the social proof to help you get a bigger angel round done at a higher valuation by tons of industry insiders and thus offering the social proof you need attract great employees and ultimately venture capital investors.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Lightspeed Venture Partners

OCTOBER 7, 2012

As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. But the company had previously raised $5M for 17% of the company, implying a post money valuation after that investment of $29.4M.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Gust

OCTOBER 17, 2011

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Angel Investor 158

Both Sides of the Table

FEBRUARY 15, 2016

The early stage investor probably still owns 15% of your company and thought he or she had a great return coming (after all – it got marked up to $100 million post-money valuation just 12 months ago!).

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Agile VC

APRIL 17, 2011

Post-money valuation probably no higher than $12M (2). round closed in June 2004. Led by General Catalyst with participation by co-founders Steve Hafner & Paul English. liquidation preference, 6% accumulated dividend (1). Series A-1 Preferred. 1.65M extension round closed Nov 2004.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

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. Here is the hypo (all $$ amounts changed): 1.

Pre-Money Valuation 58

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

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

Growthink Blog

JANUARY 24, 2011

Let's say an investor buys 1,000,000 shares of stock in a company at $5/share and the company's total shares outstanding is 3,000,000 shares (implying a pre-money valuation of $10 million (2 million shares @ $5/share) and a post-money valuation of $15,000,000 (3 million shares @ $5/share)).

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

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? More importantly, VC’s will worry over several issues when looking at a company and deciding about an investment.

Limited Liability Company 48

Limited Liability Company Post-Money Valuation Valuation Down Round 48

VC Cafe

NOVEMBER 1, 2019

Pitchbook shows that Notion has a post money valuation of $800M, making Notion a fast unicorn from the time of funding. The riynd was led by First Round Capital, joined by several other star investors including Josh Kopelman, Shana Fisher, Naval Ravikant, Aydin Senkut, Elad Gil and Mike Vernal. First Round was.

Wiki 68

Wiki San Francisco Post-Money Valuation Cloud 68

www.mint.com

MARCH 9, 2010

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

SEPTEMBER 18, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? Him: Not so good.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

ithacaVC

APRIL 25, 2014

The green box at row 45 just provides a nice double check on post-money valuation calculations. But you should ask your accountants and lawyers about strike prices and Section 409A of the tax code. Columns I and J are important as they show the % of preferred stock ownership compared only to preferred stock outstanding.

Cap Table 79

Cap Table Preferred Stock Pre-Money Valuation Participating Preferred 79

View from Seed

JANUARY 11, 2017

But mainly we did it because these corporate VCs were among the only groups willing to invest at PayPal’s somewhat inflated post-money valuation, during the middle of the dot-com crash when traditional VCs pulled back sharply and other sources of funding were constrained.

Strategic Investors 120

Strategic Investors Post-Money Valuation Seed Stage Cofounder 120

Both Sides of the Table

MAY 13, 2013

If you give $2 million for 20% of a company ($8 million pre + $2 million investment = $10 million post-money valuation) that has no product and no customers and it turns around 3 months later and sells for $5 million it would hardly be fair for investor to get $1 million back (20% of the proceeds).

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

betashop.com

OCTOBER 8, 2012

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 10M post-money valuation = $100M target. 500M valuation = $5B target. Understand whether your business is a VC business or not.

Technical Review 108

Technical Review Technology Software Review Valuation 108

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

David Cohen

FEBRUARY 10, 2017

Entrepreneurs will name the pre-money or post-money valuation, and sometimes they even lead with the pricing. I receive lots of pitches, and one of the things I notice is that sometimes these pitches are very clear on pricing.

Post-Money Valuation 48

Post-Money Valuation Valuation Lean Community 48

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? More importantly, VC’s will worry over a number of issues when looking at a company and deciding about an investment.

Limited Liability Company 79

Limited Liability Company Post-Money Valuation Valuation Down Round 79

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. Let’s pause here and take stock of the stats, which are incredible: According to Pitchbook , the current median deal size for a seed deal is $2.2M

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60