Both Sides of the Table

JULY 25, 2011

There were no explanations for all of the confusing details outlined in a term sheet. He gave me the human explanation for what the term meant. But know that every term in your term sheet is there as a result of some dispute of the past between shareholders or between shareholders & management.

Liquidation Preference 304

Liquidation Preference Term Sheet Cap Table Participating Preferred 304

www.readwriteweb.com

DECEMBER 29, 2011

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.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

David Teten

DECEMBER 3, 2019

Founders are often disadvantaged in their negotiation vs. investors because they’re less familiar with the long-term implications of different structural options. 645 Ventures released a cap table simulator to help level the playing field. Capital has built a free online tool for founders to calculate their cost of capital.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Both Sides of the Table

OCTOBER 7, 2014

I had very smart entrepreneurs where I gave the company $2-3 million and we raised anywhere between $3-5 million and when I put A-round in the term sheet they had their lawyers change it back to seed rounds. It is less about actual money and more about structure of your Cap Table. I saw this myself a few times in a row.

Cap Table 399

Cap Table Silicon Valley Term Sheet Finance 399

Gust

OCTOBER 8, 2014

I had very smart entrepreneurs where I gave the company $2-3 million and we raised anywhere between $3-5 million and when I put A-round in the term sheet they had their lawyers change it back to seed rounds. It is less about actual money and more about structure of your Cap Table. I saw this myself a few times in a row.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

This is going to be BIG.

FEBRUARY 27, 2022

Besides, there were a limited number of places where I could do my job in venture capital anyway—and while I might be a go to for a pitch from super early stage pre-seed and seed founders looking for quick answers and decisive term sheets in New York City, the reality is that I would be pretty far down the list in the Valley.

Ukraine 128

Ukraine Russia Cap Table New York City 128

Gust

JUNE 28, 2014

If your term sheet calls for quarterly reports to investors, SEND THEM! The solution, however, is pretty straightforward: Make sure you have a good working relationship with your lead angel, who will often be on your board. Establish up front that he or she will be your primary interface with the group.

Angel Groups 148

Angel Groups Cap Table Term Sheet Valuation 148

This is going to be BIG.

JUNE 4, 2017

What happens when a founder has that rare wealth of riches when they're choosing who they're going to allow onto their cap table? The tables turn and the one being pitched to becomes the one pitching. One aspect of venture capital that rarely gets talked about is competition to get into a deal.

Reputation 67

Reputation Cap Table Term Sheet Green 67

Both Sides of the Table

JANUARY 21, 2010

I’ve seen startup CEO’s send requests like, “can you please update our Cap Table with the latest stock option allocations approved at the board meeting?&# My email response (in my head, not sent), “can you please waste more money having expensive lawyers do something that you could / should easily do for free?

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Genuine VC

MAY 20, 2013

VCs who swear publicly that they’ll never make an investment with less than 20% ownership show up on cap tables in the teens… the 20% pronouncements are just posturing for negotiation. MYTH: Goal of entrepreneur’s VC fundraising is a term sheet.

Venture Capital 244

Venture Capital Cap Table Portfolio Early Stage 244

Rob Go

AUGUST 29, 2016

Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation. Today, nearly all early stage term sheets I see are expressed as post-money valuations. Overall, I think this move towards post money valuations in term sheets is a good thing.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

David Teten

AUGUST 19, 2019

We’re currently evaluating about 20 companies a month and issuing term sheets to 25% of them; those that fit our investment criteria. Limited amount of existing debt and a clean cap table”. We make fast, data-driven credit decisions for these types of businesses and show Founders how the math/ROI works.

Revenue 60

Revenue Technical Review Software Review Equity 60

abovethecrowd.com

APRIL 20, 2016

The Sharks Arrive With Dirty Term Sheets. Dirty” or structured term sheets are proposed investments where the majority of the economic gains for the investor come not from the headline valuation, but rather through a series of dirty terms that are hidden deeper in the document. Who are the Sharks?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

ithacaVC

APRIL 10, 2012

So, talk to them about adjusting the cap table prior to our investment – have the board grant you stock options (to avoid a tax issue) prior to our investment to compensate you for the deferred comp.” You would call this solution part of “cap table clean up”, a topic I just realized I should write about soon.

Cap Table 49

Cap Table Pre-Money Valuation Stock Options Due Diligence 49

Feld Thoughts

JULY 14, 2015

But instead of adding it on to the note or doing an equity round with a price, which could still be an early stage price but below the cap, they make the argument that since the company couldn’t raise a round, the company is worthless. So they recapitalize the company. It’s not pretty, but it happens.

Recapitalization 70

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

Business Plan Blog

NOVEMBER 13, 2013

She recently published an ebook with insights about the impact of JOBS Act & Dodd Frank Act on startup funding, terms like angel, accredited investors, venture capitalists, stock options, Restricted Stock, RSUs. Links to Download Arushi’s eBook. Apple iBook: STARTUP Financing, Equity and Tax.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Feld Thoughts

JUNE 2, 2015

But if they don’t know this, and they are negotiating terms with a VC who is expecting the notes to convert in the pre-money, it can create a mess after the terms are agreed to somewhere between the term sheet stage and the final definitives.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

www.paulgraham.com

APRIL 28, 2010

One experienced CFO said: The better ones usually will not give a term sheet unless they really want to do a deal. As oneVC told me: If you were talking to four VCs, told three of them that you accepted a term sheet, and then have to call them back to tell them you were just kidding, you are absolutely damaged goods.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Austin Startup

MAY 17, 2017

Having a VC already on your seed-stage Board can make it harder to get term sheets from outsiders for your Series A. This dynamic of committing early to a VC before you’re ready for a Series A is discussed somewhat in The Many Flavors of Seed Investor “Pro-Rata” Rights.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

venturehacks.com

OCTOBER 21, 2010

Later that evening you review the term sheet from Blue Shirt. Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# All our products Pitching Hacks , Cap Table , and Co-founder Interview.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

venturehacks.com

SEPTEMBER 22, 2011

For example, they may give you an exploding term sheet. How to make a cap table. Pitching Hacks , Cap Table , and Co-founder Interview. But overall, an offer from a top-tier firm increases your valuation. Top-tier firms try to avoid increasing your valuation when they make an offer. Popular Posts.

Equity 40

Equity Cap Table Valuation RSS 40

www.payne.org

SEPTEMBER 22, 2011

UPDATE: If youre a founder or near-founder, your equity terms are likely defined by the funding terms negotiated with the investors. For a very good summary of investor terms, see Brad Felds writeups on term sheet terms.

Equity 56

Equity Employee Vesting Preferred Stock 56

This is going to be BIG.

JANUARY 10, 2021

These people want to make the technology ecosystem the wild west where anyone that doesn’t have privilege and power just gets run over and I fully believe their views are going to make them less desirable to have on cap tables. Don’t let them tell you that living wages must come at the expense of “worker freedom”.

Venture Capital 150

Venture Capital Cap Table Accredited Investor Silicon Valley 150