Both Sides of the Table

JULY 22, 2010

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. Investors own 25%, the founders own 75%.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

SEPTEMBER 28, 2014

Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. (it by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

SEPTEMBER 25, 2010

Paul Graham’s assertion that “any startup founder can tell you the most common question they hear from investors is not about the founders or the product, but “who else is investing?&# When I’m in, I’m in. rings true to me. Investors who commit early deserve to have a lower price.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Feld Thoughts

FEBRUARY 9, 2016

I started investing in 1994 and while there was some bumpiness in 1997 and again in 1999, the real pain happened between 2000 and 2005. I have two simple rules for founders in my head from this experience. Deal with reality as a founder as well as an investor group and avoid this complexity – just clean up your cap table instead.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

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. It was 1999. Best to be a founder. Anyway, I hope this post hasn’t been too harsh. It was easy to do these calcs.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Ben's Blog

JULY 16, 2013

3/31/1999: 49.7. In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Ben's Blog

JULY 16, 2013

3/31/1999: 49.7 In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46