View from Seed

SEPTEMBER 14, 2021

One thing that jumps out quickly is that TVPI between 2004-2010 (avg 2.6x) has underperformed 2011-2017 (avg 3.0x). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less. Source: Cambridge Associates (VC) & TradingView (Equities).

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

ReadWriteStart

SEPTEMBER 10, 2010

Whether it is credit or equity, funding is very, very tight. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. Kristen is doing about $70,000 year-to-date, and expects to hit $200,000 for the 2010 fiscal year based on her holiday sales projections.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

JUNE 5, 2015

The truth is that I’ve been warning about convertible notes since 2010 it was first declared that “convertible notes have won.” ” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. Size of my check. No problem.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

View from Seed

SEPTEMBER 14, 2021

One thing that jumps out quickly is that TVPI between 2004-2010 (avg 2.6x) has underperformed 2011-2017 (avg 3.0x). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less. Source: Cambridge Associates (VC) & TradingView (Equities).

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? How much equity should I give up? How much equity should I grant to early employees? No loss of equity, at least until they convert at Series A. How much equity should be given to employees?

Equity 40

Equity Employee Dilution Valuation 40

Tim Keane

JANUARY 12, 2010

Bottom Up Market Sizing » January 12, 2010. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues. « Power of Angel Investing in Milwaukee | Main. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

rapidrollout.wordpress.com

JANUARY 15, 2011

And finally, you may be able to avoid diluting your equity. Preserve your equity by using a consulting CTO to ramp up your company before securing early-stage financing and hiring a permanent technology partner. Increasingly, people who were only available as full-time, equity-position founders or [.]

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40

View from Seed

SEPTEMBER 14, 2021

One thing that jumps out quickly is that TVPI between 2004-2010 (avg 2.6x) has underperformed 2011-2017 (avg 3.0x). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less. Source: Cambridge Associates (VC) & TradingView (Equities).

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Both Sides of the Table

MARCH 11, 2010

Let me assume for this discussion it’s a garden variety 2010 IT or Internet business (as opposed to something requiring capital equipment or a life sciences project). Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. It’s a tricky question with no clear answer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Equity for Employees. Bookkeeper.

Equity 62

Equity Employee Founder CTO Hire 62

Both Sides of the Table

APRIL 14, 2010

It is 2010. That means that they likely raised money at a particularly high price relative to 2010 prices. If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

www.mattbartus.com

DECEMBER 9, 2012

Matt Bartus — February 9, 2010. If you are a company that is fundraising, keep in mind that there are a few different levers you can pull to change the amount of dilution that the founders will experience. In Equity , Investors , Negotiating , Term Sheets Equity , Negotiating , Valuation , VCs. — 23 Comments.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity. is lowered.

Equity 40

Equity Employee Founder Cofounder 40

Lightspeed Venture Partners

OCTOBER 22, 2012

The founders have more demand than they know what to do with, and want to raise $55k for 5% equity in the company to buy a second truck. The founders focused too much on dilution and on Barbara’s clever ideas on a dimension (marketing) that was not critical to the business. In 2010 they did $10k in profits.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Both Sides of the Table

APRIL 25, 2011

A great recent example of this was a successful group of entrepreneurs who had created a company that will do $10-12 million in revenue at their system integration business (read: services business) in 2011 after having done $5 million or so in 2010 and $2-3 million in 2009. That is $12 million in profits over 3 years.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

K9 Ventures

MARCH 23, 2011

I may be well be in the minority in the Valley to think this way — especially so as a seed stage investor — but I have a strong preference for doing priced equity rounds for funding companies at any stage. It is in essence equivalent to being a Liquidation Preference that is typically seen in a preferred equity financing.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

blog.nahurst.com

JULY 19, 2010

This covers one of the most common situations I encounter: For a pre-funding web startup whose team includes only a non-technical cofounder, how much equity should an incoming technical cofounder get? This is an area that varies widely and can significantly impact how much equity a technical cofounder receives (if they take more salary).

Technical Cofounder 43

Technical Cofounder Cofounder Equity Salary 43

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. In 2000 or 2010, it made sense to build in San Francisco. Private Equity According to Pitchbook data, there are over 600 private equity firms in Texas.

Texas 90

Texas San Antonio Houston Dallas 90

www.startupnorth.ca

OCTOBER 23, 2010

The Adventure of a Lifetime 17 Pithy Insights for Startup Founders 17 Pithy Insights for Startup Employees Venture Hacks > Hiring Venture Hacks > Employees Venture Hacks > The Option Pool Shuffle Paul Graham > The Equity Equation [link] boris It's important to note that those options grants are AFTER a Series A funding.

Employee 41

Employee Founder Salary Equity 41

Agile VC

JULY 11, 2012

in equity & loans which was ultimately worth >170x ($355M) when DEC went public about a decade later. Should there be a notion of “founder equity” for those individuals who put in the hard work to start a firm and build the brand? I co-founded NextView Ventures , a seed-stage VC firm based in Boston, in 2010.

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

Pascal's View

JANUARY 28, 2010

Many venture capitalists and other capital markets experts believe that 2010 will be a better year for achieving IPO liquidity because a number of well established companies that remain private have reached sufficient scale to attract much-needed public equity funding.

Management 53

Management Silicon Valley Virginia Seattle 53

Professor VC

JANUARY 17, 2008

There needs to be enough equity to go around for founders, early investors, later investors, and employees. ► 2010. (7). However, there was not any interest on the other side in debating me in front of the group of entrepreneurs, so Ill have to do it here. Why I Hate Convertible Debt.Let Me Count the Way. ► February. (1).

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

aweissman.com

JANUARY 30, 2010

Jan 30, 2010. If not, the value of the exchange fund is diluted. Brand equity is hard to build, and even easier to lose. Brand equity is hard to build, and even easier to lose. Theyve now got a pool of founders equity that they can enhance, or devalue. If not, the value of the exchange fund is diluted.

Early Stage 46

Early Stage Entrepreneur Cofounder Framework 46

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost. 

Finance 58

Finance Term Sheet Equity Aggregator 58

Professor VC

JUNE 20, 2011

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). ► 2010. (7). The business model (OEM through broadband and home security companies for mass distribution) if not specific product functionality has remained largely the same.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# First, the option pool only dilutes the common stockholders. It states that the share price is $1.00… this must be a mistake!

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Startup Company Lawyer

JANUARY 9, 2011

I started writing this post in September 2010, but only got around to finishing it.). Paul Graham has sparked some discussion on the topic in August 2010 when he tweeted “Convertible notes have won. Mark Suster does a good job analyzing whether convertible debt is preferable to equity , and concludes that convertible debt is better.

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

Reid Hoffman

JUNE 8, 2021

So you met me in 2010. If I could add one more bonus idea, this is if you’re incorporating your company, I would think about taking 1% or 2% equity and setting it aside for other stakeholders. And I made a decision not to do an equity round, because I thought it would be a down round. We’ve had I think an 11-year relationship.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Professor VC

DECEMBER 8, 2015

Musk was the early winner taking the CEO role (for a brief period) in the merged company and the largest equity stake as well. Not surprisingly, the merger was highly dilutive, particularly to Confinity/PayPal shareholders. I was a Limited Partner in Angel Investors II (Ron Conway's angel fund) that was an investor in Confinity.

Merger 28

Merger LP IPO Redemption 28

Reid Hoffman

JUNE 8, 2021

So you met me in 2010. If I could add one more bonus idea, this is if you’re incorporating your company, I would think about taking 1% or 2% equity and setting it aside for other stakeholders. And I made a decision not to do an equity round, because I thought it would be a down round. We’ve had I think an 11-year relationship.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

www.paulgraham.com

OCTOBER 23, 2010

October 2010 After barely changing at all for decades, the startup fundingbusiness is now in what could, at least by comparison, be calledturmoil. Founders never really likedgiving up as much equity as VCs wanted. 5 ] But the advantage of these medium-sized rounds is not just thatthey cause less dilution.

Valuation 92

Valuation Stock Partner Founder 92

Life Beyond Code

SEPTEMBER 27, 2011

Through the spring of 2010, we released four volumes of EJ books and continued to experiment with the roundtables, which became increasingly popular. Meanwhile, in January 2010 my New Year’s resolution was published. By April 2010, the One Million by One Million (1M/1M) global initiative had been formally named.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116