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

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

View from Seed

SEPTEMBER 13, 2018

Effective) post-money valuation. Similarly, the capital-efficiency to date is taken as reflective of inherent in the business itself and operating mindset of the team, rather than as the amount of capital used for discovery of product-market fit that is decoupled from the efficiency post-traction. 100K in MRR was cited).

Seed Stage 136

Seed Stage Post-Money Valuation Valuation Startup 136

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

VC Cafe

JUNE 10, 2022

According to new research by Pitchbook , the trickle down effect has already started in seed and series A startups with round sizes and valuations shrinking in size compared to 2021. But recently those round sizes and valuations have tumbled to about $10 million and $50 million, respectively, he said.

Valuation 152

Valuation Marketing Israel Venture Capital 152

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

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

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

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

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

Rob Go

AUGUST 29, 2016

Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation. Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

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

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

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

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

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

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

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

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. They raised $5 million in their B round.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

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 159

Founder Post-Money Valuation Dilution Valuation 159

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

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

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

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

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

Both Sides of the Table

AUGUST 1, 2010

If we can’t agree on price I tell entrepreneurs that they can raise money and say “GRP will speak for half of the round.&# Done – the only signal is positive. Obviously this “half the round&# offer has limits. But in all reasonable circumstances were in.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

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

Agile VC

DECEMBER 6, 2012

Well at this juncture Startup X’s valuation is presumably a lot higher than it was at the Series A, maybe even 5-10x+ higher. Suppose Acme IV invests in the Series D and 6 months later there’s an acquisition offer for Startup X that’s 50% higher than the Series D post-money valuation.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Gust

NOVEMBER 12, 2024

It’s not uncommon for terms in early-stage startups to be wildly overloaded, but valuation may take the prize for the most confusing to founders. But, as a founder, it’s worth understanding enough to avoid equity mistakes and to avoid sounding like that guy from The Princess Bride when you’re talking to investors.

Valuation 91

Valuation Pre-Money Valuation Post-Money Valuation Common Stock 91

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

The Startup Lawyer

OCTOBER 9, 2010

Good luck trying to convince even the most nascent of startups to take your investment at around a $100k post-money valuation. (a) That’s $20,000 per startup for a 15%-20% equity stake. Pretty expensive seed capital.

Dallas 91

Dallas Seed Capital Incubator Post-Money Valuation 91

Lightspeed Venture Partners

SEPTEMBER 21, 2013

to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. Despite having over 500k downloads and making $450k in revenue over the last 21 months, he had only $185k left in the bank, which meant that he would be out of business in 90 days if he didn’t raise more money.

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

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

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? 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

Lightspeed Venture Partners

OCTOBER 1, 2012

If the company is sold for more than the post money value of their investment, they would prefer to convert to common stock and get the proportion of the sales proceeds equivalent to their ownership stake as this is worth more than their investment.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

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