Remove 2008 Remove Dilution Remove Early Stage Remove Revenue
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2010 VC Funding Outlook for Startups – Prepare for Winter (Part 3/3)

Both Sides of the Table

In the first post in this three part series I described why I believe the VC market froze between September 2008 – April 2009. So I believe that now is the perfect time to build a company and the perfect time for early-stage investors to bet on innovation. million – take it.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit&# someday – either via selling your company to a larger company or via an IPO. million post-money valuation with no revenue. It was early 2000. There is no such thing as a uniform price.

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Strategy Roundtable: Open Opportunities in Cloud Computing and Rural BPO

ReadWriteStart

They already have several customers including some telcos, and are at about $350,000 in revenues. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. That's why, I advised Gio to keep going with further execution on his business and build more revenue traction.

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What Are Pre-Seed Rounds and Why Do They Exist?

View from Seed

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. Series A investors invested quite early, often before product/market fit. Also, the stage of the company tends to be very early.

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How much equity for investors and employees?

dondodge.typepad.com

Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. Dont worry about giving up too much equity at an early stage.

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Time is the Enemy of All Deals

Both Sides of the Table

But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. History repeated itself in September 2008 with that market crash. I’ve offered to fund an early stage company where I promised cash in bank in less than 30 days. We ended up agreeing a term sheet for $16.5

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ProfessorVC: How much is enough?

Professor VC

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). ► 2008. (14). I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases.