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). Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Was this a lost decade for venture capital?

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

SoCal CTO

FEBRUARY 2, 2011

There's a lot out there around Customer Development - read Steve Blank : Entrepreneurship as a Science – The Business Model/Customer Development Stack - Steve Blank , October 25, 2010 Checklists for Chaos, The Path to Success - Steve Blank , October 28, 2010 and reading about Lean, MVPs, etc. is a requirement. It's required reading.

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

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). Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Was this a lost decade for venture capital?

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Agile VC

MAY 26, 2011

To give you a sense, for 2002 the entire US online ad market was $6B and had shrunk year over year (it was $25B+ for 2010). round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. I co-founded NextView Ventures , a seed-stage VC firm based in Boston, in 2010.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

This is going to be BIG.

OCTOBER 10, 2014

Since January of 2010, when I led my first seed investment in Backupify , I have led or committed to 27 investments. The criteria for what is a Seed and what is a Series A for these purposes is whether or not the first round of the company was within the same year that I did the investment, and it had to be less than $750k of prior money.

Pre-Money Valuation 146

Pre-Money Valuation Dilution Valuation Term Sheet 146

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.” In the old days VCs funded off of a “pre-money” valuation. It’s worth reading his post to understand the problem.

Pre-Money Valuation 150

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

Tim Keane

JANUARY 12, 2010

Bottom Up Market Sizing » January 12, 2010. Term-sheets and Valuations: Thinking about Negotiations. 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. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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). Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Was this a lost decade for venture capital?

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Scott Edward Walker

APRIL 22, 2012

In Fenwick & West’s 2011 Seed Financing Survey (the “Fenwick Survey”), the percentage of convertible note seed financings that granted a discount to investors was 67% in 2010 and 83% in 2011; and the median discount was 20% in both 2010 and 2011. What is a Conversion Valuation Cap?

Pre-Money Valuation 72

Pre-Money Valuation Finance Liquidation Preference Founder 72

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). The pre money valuations on the two deals were close enough to be a wash, but the ability to accelerate the business at twice the speed would have been a real differentiator.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Altgate

OCTOBER 18, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Startup Executive Compensation Scorecard Pre-Money Valuation vs Number of Founders → No one wants to tell you your baby is ugly Posted on October 18, 2010 by admin No one wants to tell you your baby is ugly.

Pre-Money Valuation 59

Pre-Money Valuation Venture Capital Valuation Lean 59

www.mattbartus.com

DECEMBER 9, 2012

How to pump up your VC valuation. Matt Bartus — February 9, 2010. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. Take a look at the numbers: Pre-Money. Post-Money. Option Pool.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Gust

OCTOBER 20, 2011

This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. In most regions, the pre-money valuation does not vary significantly from one business sector to another.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Professor VC

JANUARY 17, 2008

Again, I see nothing wrong with this, although entrepreneurs often prefer convertible debt as it defers the valuation discussion and leaves the Series A price for the venture firm to set. He also said they typically only invest at a $1 million pre-money valuation or less. ► 2010. (7). ► February. (1).

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

K9 Ventures

MARCH 23, 2011

With some of the recent high cap notes that we have seen in 2010 and 2011, I predict that the mis-alignment of incentives will still be an issue in cases where those caps don’t kick in. If you think the answer is 5%, because the financing happened at the same pre-money valuation as the cap in the note, then you’re wrong.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Both Sides of the Table

APRIL 14, 2010

It is 2010. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. That means that they likely raised money at a particularly high price relative to 2010 prices. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Pascal's View

AUGUST 21, 2011

As Primack points out in his post: “Law firm Fenwick & West reports that valuations for Silicon Valley venture financings rose 61% in Q4 2010. This was the sixth straight quarter in which their barometer showed an average valuation increase, including a 28% bump the prior quarter.

Valuation 50

Valuation Social Media Media IPO 50

K9 Ventures

MAY 14, 2011

The incubators invest usually for an equity stake and buy equity at a extremely low valuation (for example, 7% for $15,000, which implies a pre-money valuation of less than $200,000). or may come from VC firms (as is now the case with YC being funded by Sequoia ).

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

thestartuplawyer.com

FEBRUARY 24, 2010

Tamer Salama says: August 14, 2010 at 11:32 am Thank you for your great posts. Tamer Salama says: August 14, 2010 at 6:32 am Thank you for your great posts. Ryan Roberts says: August 20, 2010 at 9:41 am Thanks for the kind words, Tamer. Ryan Roberts says: August 20, 2010 at 4:41 am Thanks for the kind words, Tamer.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

dondodge.typepad.com

JANUARY 15, 2011

So they will give you a pre-money valuation somewhere around the amount you raise. Sounds strange, but it usually works out that if you are raising $2M the VCs will value your company at $2M pre-money, and $4M post money so they end up with 50% of the stock. startupcto

Equity 40

Equity Employee Dilution Valuation 40

venturehacks.com

OCTOBER 21, 2010

If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle You have successfully negotiated a $2M investment on a $8M pre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Both Sides of the Table

APRIL 3, 2010

As a reminder, VC funds are comprised of money from LP’s (Limited Partners) that include university endowments, pension funds, high-net-worth individuals, insurance companies and large corporations. A totally new VC is willing to invest in the company but at a $15 million pre-money valuation.

Pre-Money Valuation 226

Pre-Money Valuation Venture Capital LP Term Sheet 226

David Teten

NOVEMBER 15, 2013

Asset managers can earn far more money at less risk than in any other industry. Simon Lack reports in The Hedge Fund Mirage that from 1998 to 2010, hedge fund managers earned $379 billion in fees, while their investors earned only $70 billion in investing gains. Would you pay a $379 tip for a $70 meal?

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

www.currentlyobsessed.com

MAY 28, 2010

Instead of “We are worth about $5m because we have done XYZ and we need to raise $1m, so let’s sell 20%&# it’s better to think about valuation as an output variable, like “Let’s raise $2mm and sell 33%, our (pre-money) valuation is therefore $4mm.&# Future value is key.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42