Both Sides of the Table
JULY 29, 2010
The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.
Both Sides of the Table
JUNE 22, 2011
New investors hate down rounds. An obvious example is Google who may have gotten less market attention if there would have been 8 well-financed competitors during the 2001-2005 timeframe. They will enter the “triage phase&# of the market where they figure out which of their existing deals will survive. That’s a fact.
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Both Sides of the Table
SEPTEMBER 18, 2014
You’ll find out the minimum when the next round is raised. And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. A down round? There are a million ways to do quick, easy, low-cost rounds with prices. Me: More dilution?
Gust
SEPTEMBER 17, 2014
You’ll find out the minimum when the next round is raised. Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.
Both Sides of the Table
SEPTEMBER 27, 2010
My wife worked at Google so while we had good income in Silicon Valley it’s hardly the life of luxury given the costs of housing. I discussed it in my post on the topic linked above. ** One small note: many VCs who got into the industry in 2001 or later have never seen a “carry&# check. &# I was a founder once.
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