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Option Pools and VC Negotiations

Rob Go

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. There have been others in the past that have detailed the math behind option pools and their impact on venture deals.

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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

2010 Net Income: $8 million. Post-money valuation probably no higher than $12M (2). Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Pre-money valuation was approx. Pre-money valuation was approx. Pre-money valuation was at least $250M (2). as of 12/31/09).

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The Future of Startup Funding

www.paulgraham.com

Youdnegotiate a round size and valuation with the lead, whod supplysome but not all of the money. Standardized paperwork will do away with the need tonegotiate anything except the valuation, and that will get easiertoo. Butthere may not have to be just one valuation. In the old days, the standard m.o. Indirectly, but they are.

Startup 93
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VCs eating our own dog food: Using technology and analytics to make better investments

David Teten

The reports showcase raw data, analytics, visualizations, and benchmarking statistics on the company from dozens of sources, including team, intellectual property, technology, product, financial, banking, marketing, customer, risk, valuation, and investment information.”. If you have one, please contact me. 7) Negotiate .

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The Equity Equation

venturehacks.com

Offers from top-tier firms increase your valuation. Offers from top-tier firms increase your valuation. But overall, an offer from a top-tier firm increases your valuation. Top-tier firms try to avoid increasing your valuation when they make an offer. You have to pay market rates regardless of the equity equation.

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How to Fund a Startup

www.paulgraham.com

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value. Better how?

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Startup Equity For Employees

www.payne.org

The strike price typically goes up as the company raises additional funding (at higher valuations). My advice: understand the terms of your option grant, especially the strike price. Lets say youre being offered 2% of a company with a valuation of $10m after funding. Buying your stock would cost $200,000!

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