ithacaVC

DECEMBER 13, 2013

There are many reasons for this, but fundamentally, it is impossible to calculate a share price for the investment round unless you have complete agreement on how many shares are outstanding pre-money. The share price is calculated by taking the pre-money valuation and dividing it by the number of shares outstanding pre-money.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

The Startup Lawyer

FEBRUARY 4, 2011

The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value. Pre-money valuations startups receive from incubators are typically low…really low. 2) Scrutinize the Investment Structure.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. management, founders, angel investors) get any money. But pass they will. Brain damage. Reputation. Your existing investors tell you, “Don’t worry.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. The company came back and offered him 20% of the company for the $200k (an $800k pre money valuation). They were seeking $200k for 10% of the company (a $1.8M

Pre-Money Valuation 153

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 153

Gust

OCTOBER 21, 2011

(i) Preferred Stock (if a Preferred Financing is pending at the time of the transaction) or, (ii) if no Preferred Financing is pending, to Common Stock at a price per share equivalent to a fully diluted pre-money valuation of $3 million, to be paid in the same form of consideration (e.g.,

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Tim Keane

JANUARY 12, 2010

An average of these ranges results in a pre-money valuation of about $4MM.   If similarly situated companies are seeing $3.5MM pre-money valuations, this might become the target valuation. An average of these ranges results in a pre-money valuation of about $4MM.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Lawyer

JANUARY 10, 2012

A liquidation preference is the amount that must be paid to a preferred stock holder before any sale proceeds may be paid to the holders of common stock (i.e., The amount of the liquidation preference is usually expressed as a multiple, with the most common liquidation preference being “1X non-participating.”

Liquidation Preference 73

Liquidation Preference Pre-Money Valuation Participating Preferred Preferred Stock 73

ithacaVC

APRIL 10, 2012

They have raised some money from 12 friends and family (let’s assume the friends and family have purchased common stock). ” The impact of such a stock option grant to the VC is zero because it would be done pre-money and simply factor into the pre-money valuation and share price calculation.

Pre-Money Valuation 49

Pre-Money Valuation Cap Table Stock Options Due Diligence 49

Gust

OCTOBER 12, 2011

In my experience, a term of 12 to 24 months is common, with 12 months being on the short end. There are as many variations on this scenario as there are startups, but here are some common scenarios upon maturity: The startup negotiates with the bridge lenders to extend the maturity date. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Scott Edward Walker

APRIL 9, 2012

Why Can’t a Startup Issue Shares of Common Stock to Investors? In fact, many incubators like Y Combinator and TechStars are issued shares of common stock for their initial investment (usually about $20,000). Friends and family are also often issued shares of common stock.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Both Sides of the Table

SEPTEMBER 5, 2012

As in, “your money into my company will convert at a 15-20% discount to the next round of capital I raise with a maximum price of $8 million pre-money valuation (or whatever the cap was).” they now have 4x the stock and thus 4x the liquidation preferences (since each share has liquidation preferences on it).

Liquidation Preference 354

Liquidation Preference Ratchet Equity Stock 354

K9 Ventures

MAY 14, 2011

The incubators invest usually for an equity stake and buy equity at a extremely low valuation (for example, 7% for $15,000, which implies a pre-money valuation of less than $200,000). Personal Money. Personal Money. Personal Money AND Limited Partners. Limited Partners, very little Personal Money.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Both Sides of the Table

SEPTEMBER 8, 2012

We plan to raise at a $5 million pre-money valuation. million pre-money. In the document it outlines that you will issue stock at a $5m pre-money valuation and in recognition of the additional risks and commitments of early money you have allocated warrants to the first $150,000 of investors.

Pre-Money Valuation 294

Pre-Money Valuation Finance Warrant Liquidation Preference 294

www.paulgraham.com

APRIL 28, 2010

Some VCsnow require that in any sale they get 4x their investment backbefore the common stock holders (that is, you) get anything, butthis is an abuse that should be resisted. Theres only common stock at this stage. For example, VCs generally write it into the deal thatin any sale, they get their investment back first.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

venturehacks.com

OCTOBER 21, 2010

If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle You have successfully negotiated a $2M investment on a $8M pre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68