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. I raised my A round at a $31.5 It was early 2000. That was market. I saw this kind of pricing when I first entered the VC market in 2007.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Lightspeed Venture Partners

OCTOBER 7, 2012

They won a design award at a trade show, but have no revenue and no orders. 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. So the entrepreneur was willing to accept a valuation more than $10M lower than a previous valuation.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

FEBRUARY 15, 2016

One is how reasonable your last round valuation was. 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!). There are two other factors you may consider.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

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. It has just started to generate revenue.

Pre-Money Valuation 58

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

www.mint.com

MARCH 9, 2010

If the answer to the question centers around “We will achieve revenue soon so our net will improve and give us more runway,” it means the company is in trouble because no product ever ships on time nor achieves the company’s “conservative forecast.” What is the post-money valuation of your last round? That’s cool.

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? Your A round? Him: On metrics.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

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. Ventro was trading at $8 billion on sub $2 million of revenue. They raised $5 million in their B round. For most people it’s learn.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

betashop.com

OCTOBER 8, 2012

From the start we said that we would never make a decision as to what features to build or what products to sell based on revenue alone, rather we would focus on things that make our customers smile and by doing so lots and lots of revenue will fall out over time. 10M post-money valuation = $100M target.

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. and at least it will all make sense.

Post-Money Valuation 60

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

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

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In June of 2000, I raised money at an $820M post-money valuation. But they most certainly are not. How could this be? Things change.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Lightspeed Venture Partners

NOVEMBER 12, 2012

When asked why the company is worth a $1M post money valuation, he said, “What it comes down to is passion.” Bill said that he had a history of success, having built up a mortgage, real estate and life insurance company to $20M in revenue. ” The sharks actually laughed in his face when he said that.

Valuation 107

Valuation Post-Money Valuation Viral Algorithm 107

Gust

SEPTEMBER 17, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? How will you price the next round?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Lightspeed Venture Partners

OCTOBER 1, 2012

On the other hand, a 7% royalty means that Kevin and Barbara got to keep 93% of future revenues. But if the company is sold for less than their post money valuation, they would prefer to get their money back. He might have been better off letting them work for him, instead of him working for Mark and Daymond.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In June of 2000, I raised money at an $820M post-money valuation. But they most certainly are not. How could this be? Things change.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation.

Pre-Money Valuation 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164

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