Both Sides of the Table

FEBRUARY 17, 2011

This conversation seems to come up very frequently these days both with portfolio companies and with entrepreneurs just looking for mentorship. If you are able to raise money from credible sources at a reasonable dilution percentage then I personally favor getting the round done now and building your business.

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

View from Seed

SEPTEMBER 14, 2021

This post is inspired by some of the earliest conversations I have had with the team here at NextView and since the beginning of my VC journey. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Back in 2018, my colleague Rob wrote a blog post about how the VC asset class is doing.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Both Sides of the Table

MAY 30, 2018

If a firm typically invests $5 million in its first check and its target is to own 20% or more that means that most if its deals are in the $15–20 million pre-money range. If you’re raising at $40 million pre then you might be out of their strike zone. But there is also another very rational reason.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

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.   A cumulative dividend can get to be very expensive and is not often a feature in early stage terms.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

OCTOBER 21, 2011

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. Investors would be repaid their principal, plus accrued interest, divided by the conversion price (let’s say 30% discount, so 1 – 0.3 = 0.7). a mix of cash and stock) received by other equity holders in the transaction.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

OCTOBER 12, 2011

In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. 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.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

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

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).” You rarely find full ratchets in early-stage deals any more. Let me explain it more clearly in equity terms.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

K9 Ventures

MARCH 23, 2011

The founders’ interest is to maximize the valuation of the company at the time of a follow-on financing, thereby minimizing founder dilution. However, the note holders’ motivation is to minimize the valuation of the company so that the dollars committed as part of their note convert in to as large a piece of the company as possible.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Feld Thoughts

JULY 29, 2011

Through a series of conversations, Jane and Dick have come up with the idea to develop a social network tailored to the medical community. That narrowed the possibilities down to an equity transaction, which would in turn require a conversation about valuation. It helps control transaction costs in terms of both time and money.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. Here is an example of a cap table after a round of funding, with a pre-money valuation of $1 million. One of these terms is the valuation cap, ie.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. We had people hearing through the grapevine that we were about to raise money and new investors started calling us to get in on the deal.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301