Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. One is how reasonable your last round valuation was. There are two other factors you may consider.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

www.mint.com

MARCH 9, 2010

If you are considering working at a startup, you should ask these questions. 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.”

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

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

betashop.com

OCTOBER 8, 2012

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. Make deliberate decisions. Fire fast.?.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Both Sides of the Table

NOVEMBER 4, 2009

This is part of my Startup Advice series. at a startup that has already raised $5 million the chances of you making your retirement money on that company is EXTREMELY small. Ventro was trading at $8 billion on sub $2 million of revenue. So a friend recently called to ask for advice on becoming the CTO of a startup.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

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. It will be worth the time and effort. Sound simple?

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

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? Startup Lessons'

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

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

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. There is a lot of momentum in startups. It is always possible, but as an investor, there are usually better opportunities to put your money to work, where momentum is on your side. When they work, they work fast.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

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

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

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. You probably thought that valuations would be roughly the same as they were the last time you raised money. Hope that you feel this. Feel this way forever.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

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

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. You probably thought that valuations would be roughly the same as they were the last time you raised money. Outkast, Ms. But they most certainly are not.

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