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pre-moneyvaluation you certainly would want to exercise your right to continue investing if you had prorata rights. Just 3 years ago there was talk of institutional investors “not being able to write small enough checks.” ” Stated simply – if you seed funded Uber at $4.5m The iPhone was released.
Obviously it is build on a socialnetwork “follow people&# model that is asymmetric like Twitter. At an $86 million, pre-moneyvaluation Benchmark sure did pay up for this investment. So in a way it has built in game mechanics. And they are trying to bake in user adoption into the design of the product.
Online socialnetworking is a concept still being evangelized even in Silicon Valley… Friendster is in private beta (wasn’t until Oct 2003 they received Google acquisition offer which they turned down for Kleiner/Benchmark round). First and foremost, we believed there would be a “professional” socialnetwork.
There’s no use banging your head against a VC’s door with a socialnetwork venture if they only invest in biotech companies. Investor profiles on the platform are created by the investors themselves, and tell you exactly who the group’s leaders are, and what they are looking for.
Again, I see nothing wrong with this, although entrepreneurs often prefer convertible debt as it defers the valuation discussion and leaves the Series A price for the venture firm to set. He also said they typically only invest at a $1 million pre-moneyvaluation or less. A Lot of Horn Tooting over a Kazoo sized deal.
Through a series of conversations, Jane and Dick have come up with the idea to develop a socialnetwork tailored to the medical community. Jane felt comfortable with receiving 10% for $50k, but no less, so they agreed on a $450k premoneyvaluation of their startup.
To estimate how much the founders and other insiders owned after each of the startup’s first three rounds of financing, we used the two major factors that affect dilution: the capital raised by the startup and the pre-moneyvaluation it received. million, with a valuation of $10 million. As shown in Figure 9.5
Instead of “We are worth about $5m because we have done XYZ and we need to raise $1m, so let’s sell 20%&# it’s better to think about valuation as an output variable, like “Let’s raise $2mm and sell 33%, our (pre-money) valuation is therefore $4mm.&# Future value is key.
Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page SocialNetworks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page SocialNetworks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM
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