ReadWriteStart

JANUARY 27, 2011

I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. Jeff has managed to keep his burn rate very low thus far, and a slow and steady crafting of the business is working nicely.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Hunter Walker

NOVEMBER 25, 2022

It’s also a reminder why keeping your personal burn rate low is such a career expanding move. If your personal burn rate floor is high because you’ve been living off a Google salary and can’t imagine how you’d survive earning less, you won’t find most seed stage startup offers to be competitive in the near-term.

Salary 56

Salary Burn Rate Dilution Equity 56

Both Sides of the Table

MARCH 9, 2013

Should you increase your burn rate by adding 2 senior hires who will help you ship faster or sell more but then have less time for fund raising? Should you raise $3 million in stead of $2 million even though it means more dilution so that you will have a longer runway? Who the f**k knows?

Burn Rate 413

Burn Rate Cofounder Dilution Valuation 413

Both Sides of the Table

JUNE 17, 2017

They don’t want high burn rates but they will never fund slow growth. That management team might have decided that they wanted to maintain more control of their company, didn’t want new board members and didn’t want to take dilution. Stock option grants dilute your ownership in the company.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

abovethecrowd.com

APRIL 20, 2016

The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate. It will also minimize future dilution. ” Go public.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

MAY 9, 2011

Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. like how much burn rate), whether to sell the company, etc. Either you’re not technical and you think you need a technical co-founder or vice-versa. Involve them in fund raising, hiring, strategy, etc.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Genuine VC

JANUARY 10, 2012

The rationale for the negative effects of super pro-rata rights comes down to VC math in which the latter of the three dimensions for the next round - valuation, amount raised, and dilution % - already becomes artificially fixed. This scenario presents a number of troubling incentives.

Term Sheet 131

Term Sheet Burn Rate Valuation Dilution 131

Both Sides of the Table

MARCH 30, 2016

We had grown into a more reasonable burn rate so raising capital meant we would have many years of cash on the balance sheet. They had to focus on getting a “W” one day over the short-term dilution impact of raising at a price lower than they had set out to achieve. Some startups will have a hard time reorienting.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Bryce Dot VC

FEBRUARY 6, 2017

And not just a token “ramen” level of profitability: The startup is profitable, with January revenue of 10x its burn rate and sales expected to be in the millions for the quarter. And it rewards that early, and often painful, focus on revenue and sustainability with less dilution and more optionality.

Cap Table 40

Cap Table Burn Rate Dilution Bootstrapping 40

VC Adventure

APRIL 2, 2015

Then rather than increment up and test your sales performance hypothesis you hire like crazy (see #’s 1 and 2 again) and all of a sudden your burn rate is out of control. Countless times I’ve watched companies make the mistake of trading a small amount of dilution today for the hope of more money tomorrow.

Dilution 54

Dilution Burn Rate Sales Portfolio 54

Both Sides of the Table

FEBRUARY 14, 2016

Huge funding increases lead to massive wage inflation, rent inflation and thus higher burn rates. Plus, down rounds trigger anti-dilution provisions. Also, new investors will be worried that the down round will cause founders or senior management to depart and no VC wants to replace management.

Valuation 150

Valuation Down Round Startup Later Stage 150

Rob Go

FEBRUARY 29, 2016

Mid stage companies need to look at their burn rates and try to do whatever possible to extend runway, focus on proving really great PMF and solid unit economics, and try to survive until better days. Funding may be challenging, but it by no means has completely dried up.

Marketing 28

Marketing Dilution Burn Rate Seed Stage 28

www.paulgraham.com

APRIL 28, 2010

Whatkind of anti-dilution protection do they want? When you have a high "burn rate," youre alwaysunder time pressure, which means (a) you dont have time for yourideas to evolve, and (b) youre often forced to take deals you dontlike. Angels who only invest occasionally may not themselves know whatterms they want.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Early Growth Financial Services

JANUARY 10, 2013

Whether you’re funded, seeking funding, or still bootstrapping, here are some of the best strategies for avoiding dilution and maintaining maximum equity: 1. Doing so will prevent unnecessary dilution and it allows you to get the highest possible value for each round. Milestone raises.

Equity 38

Equity Dilution Bootstrapping Startup 38

Professor VC

JANUARY 17, 2008

I guess you can make the argument that the founders keep more of the company under the take angel money at a $1M pre-money valuation, but the stars need to be aligned and it is much more likely that initial VC funding in the angel scenario would be at a lower valuation with significantly more dilution. Can Entrepreneurship Be Taught?

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

dondodge.typepad.com

JANUARY 15, 2011

The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. They start out higher and get diluted down to these levels after multiple rounds of financing; CEO - 4% VPs - 1% each Director level -.5% That is why the equity dilution is so high. How much money should I take?

Equity 40

Equity Employee Dilution Valuation 40

BeyondVC

JUNE 11, 2007

For others who are confident in their execution and ability to raise another round, there is no better way to stretch your dollars in the company and create more value with minimal dilution.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60

Reid Hoffman

NOVEMBER 14, 2018

But it is also clearly faster, and has allowed Uber to grow its engineering team (which is typically a major challenge) at higher rate. But we decided against this strategy; we felt that keeping our burn rate lower would allow us to wait for the market to catch up to our point of view. Raise more money than you need.

Engineer 28

Engineer Burn Rate Hiring Dilution 28

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Professor VC

JUNE 20, 2011

While my ownership stake in the company has been diluted through these financings (and the merger with uControl), my carried interest (paper value of my equity) has been going up with each increase in valuation. So what does this all mean. As I said up front, I have mixed emotions about the financing. Can Entrepreneurship Be Taught?

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

This is going to be BIG.

MARCH 3, 2019

Dilution becomes the enemy—and you tell your investors that you don’t want to own a smaller and smaller percent of your “best” companies. They’re not only leading larger rounds, but may need to bridge companies they’ve otherwise made large investments into that have higher burn rates. That’s not what seed funds are doing.

Portfolio 110

Portfolio Burn Rate LP Distribution 110