Both Sides of the Table

JUNE 22, 2011

I recently spoke at the Founder Showcase at the request of Adeo Ressi. I said that at the Founder Showcase, too. But this mania to not miss out on the next big thing is driving some investors to pay growth-equity prices for traditional market risk (as in, they’re paying up before it is clear there is product / market fit).

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Agile VC

APRIL 17, 2011

Kayak was started here in my backyard of Boston… co-founder & CTO Paul English and the product/engineering team is based here in Concord MA. Co-founder & CEO Steve Hafner and the business team are based in Norwalk, CT. Led by General Catalyst with participation by co-founders Steve Hafner & Paul English.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

K9 Ventures

SEPTEMBER 8, 2015

Manu Kumar is Founder and Chief Firestarter at K9 Ventures. Kumar was the Founder, President and CEO of SneakerLabs, a company which developed software and services for web-based customer interaction. That company merged with another company in Boston and grew to about 80 people and was acquired in 2005.

San Francisco 48

San Francisco Early Stage Portfolio Software Engineering 48

Altgate

OCTOBER 1, 2010

To the right of that are five charts one each for: Current Equity Equity at Hire Base Salary Target Bonus Actual Total Cash Each of these bar charts shows the respective compensation for the management team on a percentile scale (compared to the cohort). I would love to hear your thoughts. Bookmark the permalink.

Part-Time VPE 39

Part-Time VPE Startup Salary Equity 39

Altgate

SEPTEMBER 16, 2010

But did you know that founder Markus Frind has just 3 employees for his $10MM+ revenue business? For example, you can barter for a service or you can negotiate payment terms or even equity for service. The best early PR is a product that people actually love plus a genuine story to tell from the founder. To that I say baloney.

Software Review 65

Software Review Offshore Startup Boston 65

Both Sides of the Table

SEPTEMBER 2, 2009

If a company has reached a level of success, has been around for a few years and you believe the company has potential to break out into a much bigger company then you should let the founders take money off of the table. He’s been at it since 2005. I founded it in 2005 at the age of 37. It’s that simple.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

David Teten

APRIL 1, 2011

I hope that you can join us Monday night, April 4, midtown NYC, at a panel on “Innovation in Private Company Liquidity-Online Merger Markets, Social Media, Secondary Markets, Non-US Markets, Private Equity, and the Disappearing IPO” The program is sponsored by the HBS Club of New York and the HBS Angels of NY.

Private Equity 68

Private Equity Merger IPO Equity 68

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Both Sides of the Table

OCTOBER 14, 2015

The truth is that the brutal reality of public markets is that they self correct much more quickly than our shitty little private equity illiquid corner of the universe. We have an entire generation of startup founders who don’t have muscle memory from getting their burn rates back into shape from 2008/09 or 2001-2005.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

The Equity Kicker

JUNE 23, 2016

The first thing to happen was that the bar for a Series A went up – unsurprising given that startups could now get much further with pre-Series A amounts of capital (2005-2010). That created a gap in market which sub $100m dedicated seed funds (aka micro-VCs) stepped into – there are now over 300 of them (2005-2016).

Seed Stage 97

Seed Stage PR Portfolio Operations 97

500hats.com

AUGUST 2, 2012

Or, as my friend Marc Andreessen might say, Software Eats the Private Equity World. A few years before all this scandalous VC behavior occurred, in 2005 Paul Graham ) started Y Combinator. And in addition to helping each other, they also started funding each other , and even helped YC select future batches of founders.

Silicon Valley 74

Silicon Valley Early Stage Venture Capital Valuation 74

Up and Running

AUGUST 1, 2017

What a lot of startup founders don’t realize is that when you take on VC funding, you also take on business partners. Venture capitalists essentially buy equity in your brand, which means they now have a say in how you operate. Groove founder Alex Turnbull had this in mind when he turned down a multi-million-dollar investment.

Venture Capital 113

Venture Capital Cofounder Finance Security 113

Reid Hoffman

JANUARY 20, 2013

20 years ago, the classic startup model was to have young founders start a breakthrough company, then bring in “grey hair” in the form of experienced executives once it was time to scale the business. In other words, Ben asserts that bringing in a professional CEO should be a last resort for a founder. During the dot com era, Yahoo!’s

Founder 78

Founder Hiring Cofounder Hawaii 78

mashable.com

MAY 5, 2011

“Once that product is built, you will probably have given away a lot of equity.&# “Once that product is built, you will probably have given away a lot of equity.&# In exchange for $150,000 to $300,000 of work, each startup has given Kayweb 14% to 40% equity. Reproduction without explicit permission is prohibited.

Equity 74

Equity Engineer Technical Review Social Media 74

The Equity Kicker

JULY 8, 2019

The watershed moment in entrepreneurship becoming more science than art as probably Eric Ries’s publication of The Lean Startup in 2011 (although some would argue for Steve Blank’s Four Steps to the Epiphany in 2005). Our companies are 4x more likely to reach Series A, with a 55% higher valuation, 26% faster and with founder equity 2.3x

Portfolio 84

Portfolio LP Venture Capital Partner 84

Software By Rob

JANUARY 8, 2019

To catch you up, here’s a brief summary of TinySeed: TinySeed is a remote accelerator designed for SaaS founders seeking mentorship from world-class experts, community with other talented founders, and enough funding to live for a year. And in exchange for this $6k-$18k and mentorship, YC asked for 7% equity.

Early Stage 46

Early Stage Valuation Seed Capital Revenue 46

The Equity Kicker

APRIL 13, 2017

All founders could do was accumulate wise advisors and rely on their wits and instinct. If I was to pick a watershed moment in the emergence of ‘entrepreneurship as a science’ it would be the publication of Steve Blank’s Four Steps to the Epiphany in 2005. OKRs for managing objectives). They had hit a local maxima.

Lean 90

Lean Startup Silicon Valley Venture Capital 90

Both Sides of the Table

APRIL 14, 2010

Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. management, founders, angel investors) get any money. If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. It is 2010. The list goes on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

MAY 15, 2010

But when the finally convert the debt to equity the round gets filed with the SEC and thus journalists often pick up on it. 5mm in Series A – Investors: GRP (Mark Suster)(lead), Greycroft Partners (Dana Settle), and Matt Coffin (founder of LowerMyBills) – Read more: TechCrunch , SoCalTech. They also avoid Reg D.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

Austin Startup

JUNE 19, 2018

Geoffrey passed away on November 17, 2005, but to this day I use the lessons and inspirations from him daily. He pushed for excellence but in the process promoted equity and balance, as he gave talented women a chance to succeed. Geoffrey was pivotal in shaping me as a professional. Who is your male ally? Dr. Oksana Malysheva?—?CEO/Managing

Ukraine 48

Ukraine Pennsylvania China Austin 48

David Teten

JANUARY 10, 2012

Howard Lindzon is Co-Founder and CEO of StockTwits, a social network for traders and investors to share real-time ideas and information. Mr. Parekh started his career at Goldman Sachs, developing the firm’s equities business in the Middle East, with high net worth family offices and sovereign wealth funds.

Technical Review 128

Technical Review Technology North Carolina Switzerland 128

Both Sides of the Table

MAY 5, 2011

I gave him the same advice I give nearly all over-worked, control-freak, do-everything-yourself startup founders: “Your number one priority isn’t any of these things. There’s you and your killer CTO co-founder. It’s a very cool vibe at Founder’s Coop. Passionate Entrepreneurs & Ambassadors.

Seattle 317

Seattle Silicon Valley Technical Review Los Angeles 317

Ben's Blog

APRIL 7, 2021

And since VC dollars tend to concentrate around high-tech R&D areas, it’s notable that more than 90% of the nation’s innovation-sector growth (2005-2017) is accounted for by just five metro areas — Boston, San Francisco, San Jose, Seattle, and San Diego. Venture capital. in the mid-1940s — derived from East Coast institutions.

Silicon Valley 36

Silicon Valley Non-Compete San Francisco Government 36

Professor VC

APRIL 11, 2008

I started working with the founders of iControl at the concept stage, prior to the first $100K of angel financing. In fact, for a good laugh, I just went back and checked our accounting system, and at the end of one quarter in 2005, we were down to $143 cash on the balance sheet.

San Jose 28

San Jose Angel Investor Venture Capital Balance Sheet 28

Altgate

NOVEMBER 30, 2009

For one, the base salaries and total compensation for non-founder executives, which had grown at a 5% CAGR for the past 9 years, screeched to a halt and had nearly zero growth (for Tech companies). Below is another interesting chart on founder equity for tech companies. I’ve always found this chart amazing to me.

Startup 28

Startup Venture Capital Equity California 28

Altgate

MAY 1, 2009

I’m a visual person so here’s how I see it: Entrepreneurs start companies and the founders (“F&# in my chart) invest capital which they grow with sweat equity and then limited partners (“LPs&# ) invest capital via VCs which in turn grows the pie to the eventual “exit&# (which comes in the form of M&A or IPOs).

Sweat Equity 28

Sweat Equity Private Equity IPO Venture Capital 28

www.paulgraham.com

OCTOBER 23, 2010

Single Founder Have you ever noticed how few successful startups were founded byjust one person? Even companies you think of as having one founder,like Oracle, usually turn out to have more. Whats wrong with having one founder? It probably means the founder couldnt talk anyof his friends into starting the company with him.

Startup 108

Startup Software Review Hiring Detroit 108

Professor VC

JUNE 20, 2011

Since the iControl system chronicles all meetings, I was able to find the automatic picture snapped from my first meeting with the founders, Reza Raji and Chris Stevens on April 22, 2004. But of course, the model had us requiring only $10M equity to breakeven and to achieve $185M in revenues in 2008 (the magic Year 5 in all business plans).

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

Altgate

DECEMBER 11, 2008

Founder of New York law firm Dreier LLC bilked hedge fund investors out of nearly $400 million by selling bogus securities while impersonating other people. He is apparently the sole equity owner of this 250 attorney firm and reportedly spent $40 million on artwork hanging on the law office walls. What was this guy thinking?

SEC 28

SEC Boston Nashville Illinois 28

Bryce Dot VC

SEPTEMBER 28, 2015

Back in 2005 we started a venture firm called OATV, O’Reilly Alpha Tech Ventures, myself, my partner Tim O’Reilly, and my partner Mark Jacobson. I remember specifically one of the founders that we’d backed, when we kind of shook hands on our first investment said they were never going to raise anymore money and keep the team close and small.

Venture Capital 40

Venture Capital Valuation Los Angeles Chicago 40

Steve Blank

FEBRUARY 26, 2020

What most founders don’t realize is: Every stage of a startup requires a different set of metrics and milestones and founder skills. Knowing these will help a founder position her pitch to get investors’ attention. Founders need to keep their eye on the prize — not just the next funding round. Step 5: Series, C, D….

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Altgate

JANUARY 4, 2009

We’re already starting to see layoffs at the large private equity funds where Blackstone , Carlyle and American Capital announced staff cuts between 7% and 19% in December. His company is doing well and recently received a couple of term sheets for his first institutional round.

Venture Capital 28

Venture Capital Term Sheet Private Equity Early Stage 28

www.paulgraham.com

APRIL 28, 2010

November 2005 Venture funding works like gears. I think it would help founders to understand funding better—notjust the mechanics of it, but what investors are thinking. And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Startup Professionals Musings

OCTOBER 26, 2010

of startup businesses as far back as 2005. How can you beat finding someone who has been there and done that, able to mentor Gen-Y, has lots of connections to people in your industry, and is often willing to work for equity alone? News & World Report , people over 40 were key players in 86.6% Angel Investor. Customer Service.

Advisory Board 189

Advisory Board Angel Investor Equity Salary 189

Altgate

MARCH 8, 2009

What I can tell you is that total private equity assets under management was reported as $2.5 The early stage investors are going to take a huge hit since many of their portfolio companies will be capital starved and will be forced out of business or into fire sales. But some will be saved. trillion as late as last month.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

www.singlefounder.com

OCTOBER 23, 2010

Company founders don’t have the luxury of ‘diversifying their portfolio,’ so to speak. They work at their company until funding is pulled, it goes bust, it’s sold, etc… It’s hard to be the founder at multiple companies at the same time. However, it could be more complete. 1 day ago Well, not most.

Software Review 40

Software Review Software Startup Massachusetts 40

Startup Lessons Learned

MAY 25, 2020

And then from there, I was running a fitness company on the west coast by the name of 24 Hour Fitness, which was private equity backed and quite a bit of debt. Carl Liebert : And I know, as a CEO, you want to put your head down in a founder and go execute. And look, it was a scary time.

Technical Review 148

Technical Review Balance Sheet Texas Austin 148