Gust

OCTOBER 17, 2011

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Gust

OCTOBER 21, 2011

To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

The Startup Lawyer

JUNE 22, 2010

The main feature of the convertible note is that the debt investment made by the angel investor will typically later convert into equity. As a sweetener to the angel investor (i.e., As a sweetener to the angel investor (i.e., But occassionally I’ll see an angel throw in a really low price cap (.

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

The Startup Lawyer

FEBRUARY 4, 2011

The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value. Pre-money valuations startups receive from incubators are typically low…really low. 2) Scrutinize the Investment Structure. 8) Determine the Opportunity Costs.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

ithacaVC

JANUARY 14, 2014

Company X raised its Series A at a pre-money valuation of $5mm and it raised $4mm dollars. So the post-money valuation after the Series A was $9mm. And the Series A investors then owned 4/9s of Company X. The Series A round was taken by $2mm of institutional investors and $2mm of angel investors.

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. By Tim Keane, Angel Investor, Golden Angels Investors, LLC. « Power of Angel Investing in Milwaukee | Main. Term-sheets and Valuations: Thinking about Negotiations. An average of these ranges results in a pre-money valuation of about $4MM.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Professor VC

JANUARY 17, 2008

Touched by an Angel. I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. What would the VC corollary to Touched by an Angel, be. Thursday, January 17, 2008. return on investment after 3.5

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Business Plan Blog

AUGUST 6, 2013

Angel Investor Valuations Remain Strong. Angel investor median deal sizes increased as valuations remained strong in the first quarter of 2013. 81% of deals were completed in angel groups’ home states. 81% of deals were completed in angel groups’ home states.

Pre-Money Valuation 49

Pre-Money Valuation Angel Groups Angel Investor Valuation 49

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. management, founders, angel investors) get any money. Your existing investors tell you, “Don’t worry. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? Some thoughts on raising angel money. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds. Investors call Bull Cap.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

SEPTEMBER 8, 2012

But Paul Graham really did have a point in his “ high resolution fundraising ” post – that there is a problem – particularly in angel financing – with herding cats. Since 2009 I have been counseling people to offer discounts to the first angel investors. million pre-money.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

thestartuplawyer.com

FEBRUARY 24, 2010

About the Author Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. He obviously never launched a startup and got shafted by a co-founder. Click here to learn more about his practice.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

David Teten

NOVEMBER 15, 2013

Angel investors earn higher returns than small VCs, who in turn earn higher returns than large VCs, let alone most other asset classes. I have frequently heard the expression from other investors, “We can put a lot of money to work here.” There is an inevitable tension between size and returns in asset management.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The first release is underwhelming, but they iterate aggressively, with feedback and support from some of their angel investors.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70