View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. Or, in the case of a convertible note, they’ll explicitly state a valuation cap. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Startup Professionals Musings

JANUARY 27, 2012

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Seat on the board.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

Startup Professionals Musings

SEPTEMBER 14, 2010

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. However, there is no set pattern of terms an entrepreneur might be able to anticipate from an angel, either. Marty Zwilling.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Genuine VC

JULY 30, 2012

Sharing these expectations early in potential lead investor discussions fundamentally qualifies the conversations, but it also runs the risk of prematurely losing a potential financing partner or reducing options to maximize a financing process outcome. By definition, all entrepreneurs should think that their endeavor is truly exceptional.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

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.” In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. Most would agree this is not a fair outcome.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

OCTOBER 5, 2011

In case it isn’t clear by now, angel investors aren’t in the business of making risky early stage investments in order to earn 6% interest on their money, or even 10%— the upside is all in conversion to equity—so the interest rate isn’t a major point of negotiation. This paragraph is the heart of the whole deal.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79