Both Sides of the Table

MAY 19, 2018

A detailed financial model that shows your anticipated revenue, costs and profits (Income Statement) as well as your balance sheet and cashflow statements. The buyer is shopping for equity in startups and the seller is looking for cash in exchange for equity and shared governing control of his or her company. No problem.

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

David Teten

OCTOBER 1, 2015

Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. How would one set up such a startup to eventually raise capital from outside VCs, who will be wary of ‘dead equity’ (i.e., equity that belongs to departed cofounders)? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

David Teten

NOVEMBER 14, 2019

I wrote recently about Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Since then, I’ve talked with a number of other firms, and greatly expanded my database: Who are the major Revenue-Based (RBI) Investing VCs? Revenue-based investing VC. Venture debt. See Debanked’s list.

SBIC 60

SBIC SBA Cap Table Database 60

Austin Startup

AUGUST 20, 2017

They’re looking to be paid properly in the context of the overall salary structure, including cash, benefits, and equity, and to be paid commensurate with performance. Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

abovethecrowd.com

JUNE 2, 2021

According to an interview with Elon Musk, this campaign cost Paypal about $60 million , which most Silicon Valley historians would consider money well spent. It would cost a tremendous amount of money to run such a program. With the 7% banker fee that is a 35% AVERAGE cost of capital. Billions of dollars. first-day “pop.”

IPO 82

IPO Customer Matching Silicon Valley 82

YoungUpstarts

OCTOBER 7, 2015

When we started our business, SecureDocs, we underestimated the cost of dedicated marketing software and also the potential value of marketing software. They’ll likely be trading salary for equity and a heavy dose of uncertainty. Relative to the cost of people it’s a small expense with a potentially large return.

Cap Table 100

Cap Table Intellectual Property Salary Bootstrapping 100

Berkonomics

JUNE 8, 2017

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Venture, private equity and more: Here we lump a large number investor classes into one.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Feld Thoughts

AUGUST 12, 2011

When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. Revenues and costs should both be based off of a robust set of assumptions. as a C-Corp in Delaware. This should tie to your GL for “Actuals” (i.e.

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

Startup Lessons Learned

JUNE 9, 2020

A complete collapse of revenue that simultaneously affects your employees and your customers, your partners, your investors, everyone all at once and all the news is bad. That meant of course initially raising money and cutting costs. We have to manage our stakeholders, raise money, diversify our business, and cut costs."

Silicon Valley 60

Silicon Valley Hosting Cofounder Employee 60

Berkonomics

JANUARY 20, 2010

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Taking this kind of money has a number of pitfalls you should be aware of.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. You can no longer simply look at the cap table and estimate your return. As an example, most Unicorn CEOs still have no idea that discounts, coupons, and subsidies are contra-revenue.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. It costs you a little more equity, but being able to play the two firms off each other (as well as ask one if the other is being out of line) is invaluable. The lower your costs, the moreoptions you have—not just at this stage, but at every point tillyoure profitable.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76