Austin Startup

JUNE 21, 2018

Our pre-money valuation for the seed round is 2 trillion dollars.” In 1937 (yeah, it takes that long to win the Nobel prize), Coase wrote a paper called the Nature of the Firm that revealed the fact that transaction costs are almost always material and do shape economic transactions. Why does this matter to crypto?

Securities and Exchange Commission 61

Securities and Exchange Commission SEC Pre-Money Valuation Security 61

Both Sides of the Table

APRIL 20, 2011

As a courtesy if you enjoyed his write-up please check out his startup company, ChannelStack. They chose the name First Round Capital because they thought capital would be deployed most efficiently at smaller seed stage rounds considering the cost to build an internet business had come down drastically. Investing Strategy.

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

Startup Professionals Musings

SEPTEMBER 6, 2010

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Lightspeed Venture Partners

OCTOBER 29, 2012

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. The SBU retails for $1,800 and costs $250 to make in an offshore factory.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

Startup Professionals Musings

SEPTEMBER 30, 2011

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Lightspeed Venture Partners

SEPTEMBER 21, 2013

The smartphone app that enables this is free but it costs $2.49 to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. pre money valuation and planned to use the money to market the app. pre money valuation). pre money valuation.

Pre-Money Valuation 160

Pre-Money Valuation Valuation Dilution Distribution 160

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” Team strength and experience is value.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

View from Seed

OCTOBER 21, 2014

As the seed-stage startup fundraise process has received more transparency in recent years, ranging from published advice on how to raise seed capital to increased availability through AngelList, Funders Club, and various accelerator programs, I’ve noticed another trend emerging. Lower-Than-Market Value.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

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

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. The answer is likely a mix of both.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. The answer is likely a mix of both.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

ReadWriteStart

OCTOBER 7, 2010

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. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. Photo by lco.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Term-sheets and Valuations: Thinking about Negotiations. 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.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Lawyer

FEBRUARY 4, 2011

Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Pre-money valuations startups receive from incubators are typically low…really low.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Both Sides of the Table

FEBRUARY 17, 2011

I’m a very big believer in the “Lean Startup&# principles as espoused by Steve Blank and Eric Ries. For many businesses you should keep your costs low & your capital raises low until you discover whether you are really on to a big idea where there is market demand. What might future markets hold in terms of valuations?

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. In the old days VCs funded off of a “pre-money” valuation. Pre-money ($8m) + investment ($2m) = Post-money ($10m) and the investors now own 20% of your company $2m / $10m.

Pre-Money Valuation 150

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

Lightspeed Venture Partners

NOVEMBER 19, 2012

They believed that they could get customer acquisition costs to the $10-12 range, but as Cuban points out, that was just hope, they had no evidence to back this up. All e-commerce businesses should be examined through the lens of customer acquisition cost and lifetime value. The cost of shipping and handling is at least 4 x $2= $8/mth.

Pre-Money Valuation 159

Pre-Money Valuation Alabama Valuation Churn Rate 159

David Cohen

AUGUST 1, 2018

For example, a company may be raising $1M in notes at $15M pre-money valuation cap with a 20% discount. They’re doing this, because they’re “so close” to raising $5M in equity at $15M pre or more! What a deal! It will be an easier sell to your investors. Seem reasonable to you?

Pre-Money Valuation 83

Pre-Money Valuation Valuation Equity Finance 83

Lightspeed Venture Partners

OCTOBER 7, 2012

As he said, “Great innovations solve problems or reduce costs. 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. So the entrepreneur was willing to accept a valuation more than $10M lower than a previous valuation.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. The answer is likely a mix of both.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

VC Cafe

SEPTEMBER 26, 2022

The past year was a wild ride for startups and founders, giving a whole new meaning to the ”rollercoaster” aspect of being an entrepreneur. A combination of competition for top talent and an effort to bring employees back to the office drove startups in Israel to throw extravagant parties and all-inclusive retreats abroad.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Both Sides of the Table

FEBRUARY 4, 2016

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. 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.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). But it only costs $65k to buy a new food truck, so it is easy for others to enter the market. and costs $1.10 to make, although that cost is expected to drop with scale.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. The company came back and offered him 20% of the company for the $200k (an $800k pre money valuation). There is a lot of momentum in startups.

Pre-Money Valuation 151

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 151

This is going to be BIG.

JULY 30, 2015

You don't want the "average" fund, because average funds don't do well--just like you don't want to model the average startup, because you might as well draw a big flaming hole in the ground. Second, their dollars dollar cost average at cheaper entry prices. Here's another way to look at it--the cost of capital argument.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

K9 Ventures

MARCH 23, 2011

It’s a tough tough job to be running a startup and you need to have people who are willing to listen, provide useful input, and sometimes a different point of view. If you think the answer is 5%, because the financing happened at the same pre-money valuation as the cap in the note, then you’re wrong.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

Both Sides of the Table

SEPTEMBER 5, 2012

When convertible debt first started being introduced as a “faster, cheaper way to get startups funded” they didn’t have pricing built into them. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. Once you take money from the generalpublic youre more restricted in what you can do. [

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Scott Edward Walker

APRIL 9, 2012

Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. Why Can’t a Startup Issue Shares of Common Stock to Investors? Speed, simplicity and cost. price the round).

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. I’m of the belief that early ideas can never effectively deploy $4-$5m in a very cost effective way. Post-seed (pre-A) : This is a stage that was created, because the bar for the series A has gone sky high.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

David Teten

NOVEMBER 15, 2013

Each new investor tends to raise valuations and lower returns for all the other competitive investors. It is mathematically impossible for the median investor to beat a low-cost index, after expenses. (Of I have frequently heard the expression from other investors, “We can put a lot of money to work here.”

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

venturehacks.com

OCTOBER 21, 2010

Venture Hacks Good advice for startups. SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

VC Cafe

JANUARY 20, 2014

Now the cost of entry to the Party is rising. Across all investment stages, median pre-money valuations last year rose dramatically. In the next 12 to 24 months, brand budgets will encourage startups to address the scalability challenges of content creation. Seed-stage deals now require $5.1

Venture Capital 155

Venture Capital Pre-Money Valuation IPO 155

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. I’m of the belief that early ideas can never effectively deploy $4-$5m in a very cost effective way. Post-seed (pre-A) : This is a stage that was created, because the bar for the series A has gone sky high.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48