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Shark Tank Season 4 week 7 breakdown

Lightspeed Venture Partners

The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. It had done about $30,000 in sales in a little over a year, and had emerged from a natural trade show with interest but no orders. Unsurprisingly, all the sharks passed, based on market size and valuation expectations.

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Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

The founders were very sympathetic; a man, laid off from his job, and his very pregnant wife, who sold their house and investing $150k into the business and are working hard to make a go of it. At this point, the very pregnant cofounder was weeping. He had been at it for 6 months and had no sales or distribution lined up yet.

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Have you heard the rule of the thirds?

Berkonomics

Think of startups and early stage businesses whose entrepreneurs you know. One: The entrepreneur. First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. Two: Co-management. So, co-management is the second group to share in the bounty upon a liquidity event.

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Don’t get hung up on early stage valuation.

Berkonomics

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Lessons founders learned.

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The Rule of Thirds

Berkonomics

First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. Few entrepreneurs can do it alone, with subordinate hired help and no expert management to share the burdens, skill sets and efforts involved in growing the enterprise. Email readers, continue here.]

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Keep It Under Your Hat: Valuation Caps and the $650 Million Sale of MySpace for $125 Million

Gust

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. The cap is irrelevant if the next equity financing is at a valuation below the cap amount.) was spun out, and the valuation was set by that financing round.

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Valuations 101: Scorecard Valuation Methodology

Gust

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 million and is established by negotiations between the entrepreneur and the angel investors. Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures.

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