Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). The question is whether they need to issue common or preferred stock. The answer depends on how and what rights are defined in the preferred stock. read more.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

www.inc.com

SEPTEMBER 24, 2011

Entrepreneur news from reporter Eric Markowitz. Why Arizona Bay started taking stock from its customers instead of cash. Dave Graham Business Venture Capital Private Equity GlobalLogic Inc. Venture Capital Firms. Small Business Success | Mondays and Thursdays. The Goods: Your Business Toolbox | Thursdays.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Professionals Musings

SEPTEMBER 26, 2015

Most entrepreneurs looking for an investor can tell you how much money they need, but few have given much thought to what they are willing to give up for it. In very early startups, which have no valuation, the term sheet may specify a convertible note. Even founder’s shares are common stock.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. On the phone ….

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Startup Company Lawyer

MARCH 14, 2010

My general opinion is that anything that makes the financing process faster and easier or otherwise educates entrepreneurs is a good thing. (A If you don’t, please educate yourself on this site, Venture Hacks and the term sheet series by Brad Feld/Jason Mendelson, among other places. under $500K). under $500K). Legal fees.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

MAY 13, 2013

A couple of tech giants throw millions around in either cash (for which they have hoards) or part with some publicly traded stock. And a few teams of super talented, educated and bright entrepreneurs make a few mill. If you don’t know venture economics – there is an overview here.). Acquihires and Venture Capital.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Scott Edward Walker

APRIL 9, 2012

Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. Why Can’t a Startup Issue Shares of Common Stock to Investors?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Gust

OCTOBER 12, 2011

In my experience, a term of 12 to 24 months is common, with 12 months being on the short end. Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

K9 Ventures

MAY 14, 2011

This is probably the very first group that an entrepreneur who is starting out may approach for some funding for his or her idea. The funding for the incubator of accelerator may come from the principals running the incubator (as I believe is the case for AngelPad , i/o ventures etc.)

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Professor VC

MARCH 12, 2015

If I''m going to pay a fee and carry, would prefer to invest in a venture capital fund, as the investments are being managed by professionals and have a duty to look out for LP interests. I have been a big fan of AngelList from day one and am definitely entrepreneur friendly. My intention of the post isn''t to bash AngelList.

Syndicate 28

Syndicate Syndication Silicon Valley Common Stock 28

Pascal's View

MARCH 9, 2010

This is the second in our series of ten frequently asked questions from investors in venture capital partnerships. To address the broader point about accuracy in book valuation, I am concerned that the developing industry standard for venture capital is at risk of going too far while providing no real benefit to investors.

Government 31

Government Private Equity Institutional Investors Venture Capital 31

Professor VC

JULY 25, 2013

Mike Markkula presenting Steve Jobs with first investment in Apple I recently watched an excellent documentary on PBS, Something Ventured: Risk, Reward, and the Original Venture Capitalists. This is the feeling you get from watching the venture capitalists talk about the entrepreneurs and other investors in the film.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

thestartuplawyer.com

FEBRUARY 24, 2010

Entrepreneurs often believe their startup company faces legal threats from only external sources. Even so, I believe the negative experience can end up producing a better entrepreneur if he or she applies lessons learned to current and future startups. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Professor VC

FEBRUARY 18, 2011

He obviously has a founders common stock stake along with cash invested. I asked him how the deal came out for investors since the sale price was significantly lower than the valuation on the round they were raising when we met. The Most Important Venture Capital Statistic. Venture News. Steve Bennet.

Acquisition 31

Acquisition San Jose Angel Investor IPO 31

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage. From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

Gust

AUGUST 6, 2014

two angel groups investing money in Series Seed Preferred stock purchase. a single venture capital fund putting in the full amount as Series A Convertible Preferred investment. The simple fact of the market is that there are many, many more entrepreneurs seeking capital than there are investors seeking to fund them.

Term Sheet 170

Term Sheet Lead Investor Preferred Stock Common Stock 170