Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. In the old days VCs funded off of a “pre-money” valuation.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Agile VC

MAY 26, 2011

Not long after the product launch we began the initial conversations with VCs for a Series A round. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. Btw, here’s our startup [link] We are bringing yield management to the restaurant industry. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Both Sides of the Table

MAY 30, 2018

If a VC prices a flat or down round it means that management teams are often taking too much dilution. It was 20 months ago and the founder clearly told me she has made great process (code words for higher price expected) She is raising $5–7 million and knows the range of valuations for this amount.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Tim Keane

JANUARY 12, 2010

When companies seeking their first round of serious funding are good enough to receive a term-sheet from an investor, the first issue that always arises is valuation.   For individual angels and others investing their own money, this may be more fluid than for someone with responsibility for a managed fund.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

K9 Ventures

MARCH 23, 2011

Obviously, both the founders and the note holders have the common objective of getting the company funded; but assuming the company is fundable, there is a basic misalignment of incentives when it comes to valuation. The typical fix for this problem is to put in a cap in the note for the pre-money price for conversion.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

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. Deal with the small ownership allotted to management. Talk openly about valuation and what they’ll accept so you know what you’re dealing with.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

Seeing Both Sides

JULY 15, 2009

A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). Entrepreneurs often mistakenly focus solely on the pre-money valuation while VCs look at multiple knobs in the negotiation to drive to a set of terms that, in total, they find acceptable.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

The Startup Lawyer

AUGUST 24, 2010

It also makes any potential back-and-forth on terms easier to manage. Convertibility : What amount of equity financing is required to trigger automatic conversion of the convertible notes to equity (i.e., Do the convertible notes convert to equity on the maturity date, and if so, at what pre-money valuation ?

Term Sheet 62

Term Sheet Pre-Money Valuation Liquidity Event Warrant 62

Up and Running

SEPTEMBER 20, 2021

A cap table will help you in the strategic management of business decisions. For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. One of these terms is the valuation cap, ie. Let’s dive in.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Professor VC

FEBRUARY 12, 2015

In the episode, Kristy Kruger talks about picturing unicorns roaming the planes in Africa as a kid and being at a party many years later when the topic of conversation turned to endangered species: It was about a group of five to seven people, kind of standing around the keg, just talking. or a market cap of $800M. And this is not it."

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. 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. My co-founder and other management team members wanted us to hold off and see whether we could get the deal done at a higher price.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

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