Both Sides of the Table

JUNE 22, 2011

In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. million pre-money valuation is now raising $1 million at a $12 million valuation the next investor has nowhere to go but up (or sit out the investment).

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Berkonomics

AUGUST 3, 2023

When the need is high… For the rest of us, desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Lightspeed Venture Partners

OCTOBER 7, 2012

As he said, “Great innovations solve problems or reduce costs. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

SEPTEMBER 18, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

MAY 20, 2016

I would summarize the views and qualms from professional investors as the following: Crowdfunding platform costs could trickle down to angel groups. These groups are now largely run by volunteers at no cost to entrepreneurs. Lack of checks and balances on startup valuations.

Angel Groups 136

Angel Groups Accredited Investor Equity Due Diligence 136

VC Cafe

FEBRUARY 27, 2024

Everyone moved to earlier stage – part of the decline in late stage investing is the ‘baggage’ of companies that previously raised money at inflated valuations that they would struggle to justify in today’s market. The post How the pre-seed round made a comeback in 2024 appeared first on VC Cafe.

Valuation 186

Valuation Software Review Generative AI Seed Stage 186

Both Sides of the Table

FEBRUARY 4, 2016

They point to some widely known facts: financings & valuations are up massively over the past 7 years and non-VC money has entered the system. Median pre-money valuations skyrocketed – shooting up 3x in just three years as investors competed to christen imaginary animals with imaginary valuations. So what happened?

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

VC Cafe

OCTOBER 31, 2022

Many companies are now having to resort to tough measures in order to stay afloat, including layoffs, down rounds and tough terms from current investors. The market for pre-seed and seed rounds should remain relatively active, since those companies are many years away from even thinking about going public.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

Gust

SEPTEMBER 17, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Berkonomics

JUNE 8, 2017

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Berkonomics

MARCH 28, 2019

This is only a minor problem in that both forms can convert easily into ‘C’ corporations at low cost and little consequence. First: Is the price paid for shares by previous investors excessive, creating a post-money valuation too high for the actual value of the company? How did you structure your first round? .

Limited Liability Company 48

Limited Liability Company Post-Money Valuation Valuation Down Round 48

David Teten

AUGUST 7, 2019

Likely signs of a Value investment: the company has challenges in filling out the round; the investors have more negotiating leverage than the founders during the closing process; the company has significantly better metrics (e.g. than comparable companies in the same sector that raised at a higher valuation. Why, yes, they are.

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Pragmatic cost cuts are always possible and often productive. Down rounds are corrosive.

Burn Rate 150

Burn Rate Cap Table Dilution Balance Sheet 150

VC Cafe

SEPTEMBER 26, 2022

The press took notice, especially since just a few months later startups were laying off employees en-masse to cut costs. Sustainable growth: Prioritise sales efficiency over growth at all costs. ValuatIon should be a function of value, not ego. 2022 VC Market Update Median valuations January through April Pre-seed: $7M ? $9M

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Berkonomics

APRIL 6, 2012

This is only a minor problem in that both forms can convert easily into ‘C’ corporations at low cost and little consequence. Is the price paid for shares by previous investors excessive, creating a post-money valuation too high for the actual value of the company? Email readers, continue here.]

Limited Liability Company 79

Limited Liability Company Post-Money Valuation Valuation Down Round 79

Startup Company Lawyer

MARCH 14, 2010

I was actually somewhat surprised that the following investors have agreed to use the Series Seed documents in certain of the their deals: Baseline, Charles River Ventures, SV Angel (Ron Conway), First Round Capital, Harrison Metal Capital, Mike Maples, Polaris Venture Partners, SoftTech VC and True Ventures. under $500K). Investor pressure.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Tim Keane

SEPTEMBER 17, 2009

.  (WAN is a trade group of angel organizations in Wisconsin; I'm on their board.)  Joe, a friend and colleague, is writing about the "great deals" in venture valuations that have been created by economic conditions.   It's inarguable that valuations are lower.   First, there's less money.

Wisconsin 60

Wisconsin Valuation Angel Investor Startup 60

Berkonomics

JANUARY 20, 2010

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

VC Cafe

JANUARY 29, 2024

That’s the case for most companies that are already in the market, especially if they raised funding at imaginary valuations before. Dealroom global tech report ( source ) As a result, 2023 has also seen a 43% decline in mega rounds of over $100M, though they still exist. In many ways, Edward is right.

Generative AI 171

Generative AI Global Venture Capital Valuation 171

For Entrepreneurs

APRIL 7, 2011

Introduction This post aims to help startup CEOs optimize their funding strategy by examining how investors value startups, and explaining how to avoid the common cash management pitfalls. Note: The concepts in this post will likely be obvious to experienced CEOs and entrepreneurs.

Finance 167

Finance Startup Cost Entrepreneur 167

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

I have been talking about my concerns about valuations for the past couple of years because, well, they’ve been rising very rapidly the past two years! ” “Mark has a vested interest in talking down valuations of startups.” Do Investors WANT Valuations to Drop? The Motive for Speaking Up.

Valuation 150

Valuation Down Round Startup Later Stage 150

www.paulgraham.com

APRIL 28, 2010

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value. Better how?

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

VC Cafe

NOVEMBER 30, 2022

According to Pitchbook’s Q3 2022 European VC Valuations Report , Europe minted 40 unicorns in the first 3 quarters of 2022. Atomico’s founder Nicklas Zennstrom recently called the end of the high valuations era and urged founders and VCs to remove the stigma from down rounds.

Europe 97

Europe Balance Sheet Valuation 97

Scalable Startup

OCTOBER 26, 2011

The second round is often for some or all of the following – corporate growth, go to market, turn the prototype into a robust offering, marketing costs, or to hire a sales force. It’s no longer based on a hunch, unless the company is in trouble and needs money to finish what the first round started.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

Both Sides of the Table

JUNE 5, 2016

In other words, it isn’t that VCs suddenly got smart, it’s that the costs of starting a company went down dramatically. This led median valuations to triple in 3 years and led to this stupid phenomenon that people refer to as “unicorns ,” which I am convinced will the the thing most historians laugh most about in this era.

Venture Capital 150

Venture Capital Silicon Valley Burn Rate LP 150

Both Sides of the Table

MARCH 30, 2016

Investors had grown too used to the idea that any deal you funded would get marked up to a higher valuation in the next round and that’s clearly not always true. Mutual funds had begun marking down the valuations of their private investments in high-profile deals. Fall turned to winter. 2015 turned to 2016. FOMO was NOMO.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Altgate

MARCH 8, 2009

Later stage funds will end up owning more of their portfolio companies via down rounds and ultimately should see ok returns. trillion of unrealized returns is by and large the valuation based on the price paid or the most recent round. Also, the $1.5

Later Stage 34

Later Stage Early Stage Venture Capital Balance Sheet 34

Both Sides of the Table

OCTOBER 18, 2015

Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation. Here is a chart to show you the median valuation of late stage private tech companies compared to traditional growth rounds of capital led by VCs and also vs. the public markets. 25% “down rounds?

IPO 150

IPO Venture Capital LP SEC 150