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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Other founders, “as a privately held company we don’t disclose our valuation.&# Me, “dude, I’m not a journalist. I just want to figure out what a fair valuation is.&# I figured all the VC’s talked so we should. This starts with understanding how VCs and entrepreneurs often see valuation differently.

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Cap Table Explained — What is it and How to Maintain it for Investors

Up and Running

And as the company grows, it brings on new people and may decide to issue stock options to attract new staff and funding from investors. This is all incorporated into a document called a Cap Table. . A cap table will help you in the strategic management of business decisions. What is a cap table?

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What to expect before accepting the offer to become Engineer #1 at a startup

The Next Web

Cap tables sound intimidating. Startup employees are granted common shares out of something called an option pool. It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares.

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Cap Table Clean Up

ithacaVC

When raising money from investors (angels or VC), it is critical to have a presentable and clean cap table. The share price is calculated by taking the pre-money valuation and dividing it by the number of shares outstanding pre-money. So Share Price (SP) = Pre-Money Valuation (PMV) / Shares Outstanding (SO).

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5 Tips for Raising a Venture Round

ReadWriteStart

As Mark Suster pointed out yesterday on his blog , he's seeing more and more cases where "entrepreneurs are working hard to make sure they have as many VC names and famous angels on their cap table for signaling value." Remember, once you screw up your Cap Table it's really hard to go back.

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Unintended Consequences: When SAFE and Convertible Notes Go Awry

Pascal's View

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. Many entrepreneurs lose track of what they have been cooking up in the cap table.

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VCs eating our own dog food: Using technology and analytics to make better investments

David Teten

The reports showcase raw data, analytics, visualizations, and benchmarking statistics on the company from dozens of sources, including team, intellectual property, technology, product, financial, banking, marketing, customer, risk, valuation, and investment information.”. If you have one, please contact me. 7) Negotiate .