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The Changing Structure of the VC Industry

Both Sides of the Table

Lower costs to start a business (95% reduction), many more companies created & funded by angels / seed. Note the full presentation deck with additional slides can be found on SlideShare here or you can simply scroll through it at the bottom of this post.]. We’re all socially connected (so great businesses spread faster).

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Shark Tank Season 4 week 7 breakdown

Lightspeed Venture Partners

The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. Unsurprisingly, all the sharks passed, based on market size and valuation expectations. They should have raised money from friends and family, and grown sales further before seeking to raise outside capital.

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The Great VC Ice Age is Thawing (for now) – Part 1 of 3

Both Sides of the Table

But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. While the company continues to perform well it has come at a cost.

Burn Rate 263
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Strategy Roundtable: Try To Get At Least $2M Pre-Money In Seed Round Valuation

ReadWriteStart

Before I do, however, I want to talk about a thumb rule that I'd like to propose to entrepreneurs about raising money. So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. I encouraged Todd to keep building.

Valuation 119
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Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

As he said, “Great innovations solve problems or reduce costs. This does neither, so I’m out” Cuban said, “I see you guys not as entrepreneurs but as wantrepreneurs” I agree with him. In this way, they remind me of the Lifter Hamper entrepreneur. The entrepreneur was clearly desperate.

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Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

Term-sheets and Valuations: Thinking about Negotiations. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.

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Shark Tank Season 4 Week 6 breakdown

Lightspeed Venture Partners

The first company to present was an LA based food truck selling fresh Maine lobster rolls, founded by two cousins, Saban Lomac and Jim Tselikis. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). Cousins Maine Lobster.