Startup Professionals Musings

AUGUST 26, 2018

According to Investor's Business Daily , even though IPOs in 2018 through July were up nearly 39 percent from last year, the total of 115 companies so far is still nowhere near the rate required to match the yearly total of 486 hit way back in 1999. Most startup founders voluntarily exit or are pushed out, and the fun is gone.

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Exit Strategy IPO Initial Public Offering SEC 128

Venture Chronicles

OCTOBER 31, 2010

Don Dodge wrote about a very dry but critically important issue facing private companies that issue equity to employees… 409A valuations : IPO bump? – If private investors have already bid up the valuation, will there be an IPO jump in the stock price? This breaks the conventional wisdom about pre-IPO stock options.

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Valuation Stock Options Lock-up Period IPO 42

www.inc.com

SEPTEMBER 24, 2011

Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing. I advise my clients that you offer stock only after youve searched your heart and soul and cant come up with a way to pay with anything else," says Thomas H.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Both Sides of the Table

NOVEMBER 4, 2009

OK, you would own 0.25% of the stock. 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. Stock vests for 4 years. It was 1999. Stock options are the icing on the cake. Wait a second.

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Stock Options Stock Liquidation Preference Option Pool 418

Pascal's View

AUGUST 21, 2011

Welcome to the latest passionate debate over the ‘valuation bubble or not?’ … We have a stock market that works for one kind of buzzy (Demand Pull) stock but is a disaster for the rest of the economy. For me Bubble will always be inexorably linked to what went down in 1999 and 2000 in the internet sector.

Valuation 50

Valuation Social Media Media IPO 50

thebarefootvc

DECEMBER 18, 2020

Like him, many retail investors were drawn into nonstop television coverage and headlines that were (to me, scarily) reminiscent of 1999. Guggenheim CIO Scott Minerd appeared on Bloomberg TV and put a $400K price on BTC, based on its “scarcity and relative valuation of such things as gold as a percentage of GDP”. All in one day!

SEC 45

SEC Valuation Institutional Investors Global 45

Both Sides of the Table

JUNE 28, 2011

The trend of funding anything from the first $25k to funding $50 million at a billion+ valuation is unlikely to last as the skills and style to be effective at all stages are diverse enough to warrant focus. When I built my first company starting in 1999 it cost $2.5 million in infrastructure just to get started and another $2.5

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Venture Capital Software PHP Open Source 334

Feld Thoughts

FEBRUARY 9, 2016

Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. 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.

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Cap Table Down Round Liquidation Preference Founder 70

Ben's Blog

JULY 16, 2013

You probably thought that valuations would be roughly the same as they were the last time you raised money. 3/31/1999: 49.7. And those are big companies with real earnings, so you can imagine how a private company’s valuation might fluctuate. In June of 2000, I raised money at an $820M post-money valuation. Silly them.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Seeing Both Sides

DECEMBER 27, 2013

A rising stock market makes everyone feel good. When the stock market is down, we VCs like to say that our little tech companies are not affected and simply keep their heads down and build valuable companies. But when the stock market is up, sentiment swings quickly. And if you are worried about bubbles right now, don''t.

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IPO Stock Valuation Portfolio 49

This is going to be BIG.

NOVEMBER 7, 2011

Valuations. There are a ton of companies being funded at $500+ million valuations--seriously limiting exit opportunities. Many of the private companies like AirBnb, Dropbox, and Square and that have been rumored to have big valuations are real, growing businesses. Are their valuations justified? stock market."

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Angel Investor Valuation Startup Revenue 104

thebarefootvc

AUGUST 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. I’ve seen several cycles in the market since I first started venture investing in 1999, and I believe there has been no greater potential for wealth creation in the sector than there is now. Don’t be penny wise, pound foolish.

Marketing 40

Marketing Investment Bankers Valuation China 40

thebarefootvc

AUGUST 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. I’ve seen several cycles in the market since I first started venture investing in 1999, and I believe there has been no greater potential for wealth creation in the sector than there is now. Don’t be penny wise, pound foolish.

Marketing 40

Marketing Investment Bankers Valuation China 40

thebarefootvc

JULY 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. I’ve seen several cycles in the market since I first started venture investing in 1999, and I believe there has been no greater potential for wealth creation in the sector than there is now. Don’t be penny wise, pound foolish.

Marketing 40

Marketing Investment Bankers Valuation China 40

Austin Startup

JULY 23, 2010

Having been founded in 1999, Zilliant is hard to categorize as a startup anymore. The cash looks good on the balance sheet, and venture investors want to pile on money at low valuations before the valuation increases by 10x as a public stock. Most people don’t really think of pricing as an elastic thing.

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Balance Sheet Private Equity LP IPO 67

finance.fortune.cnn.com

AUGUST 21, 2012

The information is based on part of a confidential year-end 2011 investment report distributed to investors in a fund-of-funds that made commitments between 1999 and 2001. Overall, the fund-of-funds is 97% called for 45 funds raised between 1999 and 2002. Accel Partners VII (1999): 89% (74%). Stocks end lower. Think fast!

Naming 49

Naming Term Sheet Private Equity Equity 49

Both Sides of the Table

MAY 23, 2012

There are obvious reasons the industry has had less-than-desirable returns, including: massive over-funding of the sector, huge increases in inexperienced venture capitalists that took a decade to peter out, and the massive correction in the value of the public stock markets that closed many exit opportunities for half a decade.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Ben's Blog

JULY 16, 2013

You probably thought that valuations would be roughly the same as they were the last time you raised money. 3/31/1999: 49.7 And those are big companies with real earnings, so you can imagine how a private company’s valuation might fluctuate. In June of 2000, I raised money at an $820M post-money valuation. Silly them.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

Both Sides of the Table

FEBRUARY 25, 2010

When I was raising money for my first company we had closed a seed round in 1999 and were working on our A round. We had many term sheets (it was 1999 and we had a pulse) and we were deciding which one to take. million at a $15 million pre-money valuation. It was December 1999. Let me start with a story.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Ben's Blog

OCTOBER 29, 2020

Once again, the 1999-2000 dot-com bubble period shows the highest percentage of pricing above the initial filing range – 44% of deals were priced above. Let’s add in some additional data – the median size of IPO pops broken out between low float stocks (<30% float offered at IPO) versus high float stocks (>30% offered).

IPO 36

IPO Securities and Exchange Commission Demand SEC 36

Seeing Both Sides

AUGUST 3, 2012

The first year of revenue (1999) was $4 million – a remarkable achievement. Co-founder Seelig told me that they realized that they had gotten to that rare point where “the opportunity presented itself to go big” at the same time as the capital markets provided capital at a good valuation to support going big. Gross Profit. $(60).

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Distribution Lean Massachusetts Cofounder 49

Feld Thoughts

FEBRUARY 28, 2023

The boom years of 1998 (79 IPOs), 1999 (175 IPOs), and 2000 (142 IPOs) are long gone. Since the attractiveness of investments is also largely related to exit channels, this aspect affects the availability of capital and company valuation at every stage. While there was a major law reform in 2021, the regulations are still inadequate.

Germany 165

Germany Liquidation Preference Option Pool Advisory Board 165

ReadWriteStart

AUGUST 26, 2022

That’s a valuation number and pricing number. Suppose you trace the history of Netflix, which we’ve invested in since 1999 and are still one of the largest shareholders. The churn rate increased, and then the stock plummeted by 70 percent. Like that happens. . And so that’s exactly how we see it.

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Partner Cofounder Retention Acquisition 132

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. The same thing happened to many Internet stocks.

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IPO Term Sheet Silicon Valley Valuation 40

SoCal CTO

OCTOBER 5, 2010

Consumer RSS: 1999-2010 - Venture Chronicles , September 11, 2010 paidContent made an interesting connection about Bloglines being shut down and the broader question of RSS in the age of Twitter. Building a Better Product. It's the kind of blog post that Mike has become famous for. Not Another Ex-Insiders Thoughts On Nokia!

Technology 191

Technology Product San Francisco CTO Hire 191

Both Sides of the Table

AUGUST 9, 2011

Valuations were enormous relative to progress in companies. Companies with less than $2 million in revenue were asking for $50-60 million valuations and getting them. I spent my days meeting companies, figuring out what areas of the market interested me and trying to get a sense for how VCs thought about fair valuations.

Stock 305

Stock Technical Review Marketing Greece 305

Professor VC

DECEMBER 8, 2015

I think we will see more of these in 2016 and beyond as IPOs are still far and few between and unicorns struggle to justify their stratospheric valuations. Luckily, Google was one of the 150 and did ultimately return the fund assuming the LP was smart enough to hold the stock after distribution. Most never make it there.

Merger 28

Merger LP IPO Redemption 28

Ben's Blog

MAY 24, 2021

For public investors in Facebook to achieve returns comparable to those of Microsoft shareholders, Facebook would need to reach a market cap of $500 trillion, a number that well exceeds the total global market cap of all listed stocks. In fact, if you exclude the Dot Com Bubble of 1999-2000, they have been steady for nearly thirty years.

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SEC Accredited Investor IPO Technical Review 36

Austin Startup

MAY 3, 2017

Staying private  — The average age of a technology company before it goes public is 11 years, as opposed to an average life of four years back in 1999. Through the series of funding rounds, companies do not need to go through an IPO to obtain capital or a higher valuation. Imagine that.

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Texas Startup Silicon Valley Bootstrapping 48

Both Sides of the Table

AUGUST 30, 2010

My original thinking from Oct ’09 was, while I didn’t (and still don’t) have a crystal ball I worried that: consumers were over-stretched with debt (and make up 77% of the economy), unemployment would continue to rise, which in turn would drive the stock market south and cut the rate of M&A activity and VC investment even further.

Entrepreneur 298

Entrepreneur Technical Review Balance Sheet Government 298

abovethecrowd.com

JUNE 2, 2021

The primary argument Chris is making is that Procore ended up at a better relative valuation (from his perspective) to its peers than did Squarespace, and that the clear reason this happened was the choice of an IPO (his preferred decision) over a Direct Listing (which he implies is a bad choice). Party A is locked up at time T+1.

IPO 82

IPO Customer Matching Silicon Valley 82

Both Sides of the Table

SEPTEMBER 17, 2017

I believe the massive valuation increases in cryptocurrencies we’ve witnessed of late are not based on any fundamentals other than speculation and a drive for a quick profit by many who have gained from the market hype. Many of these countries hadn’t been big stock speculators but the gains of the US Internet companies were too tempting.

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Government Distribution Stock United States 280