Steve Blank

APRIL 26, 2022

Cram downs are back – and I’m keeping a list. At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies.

Cram Down 414

Cram Down Founder Venture Capital Recapitalization 414

Startup Professionals Musings

MARCH 22, 2020

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation.

Management 308

Management Cram Down Angel Investor Equity 308

Startup Professionals Musings

MARCH 9, 2018

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation.

Cram Down 148

Cram Down Angel Investor Equity Dividend 148

Startup Professionals Musings

OCTOBER 10, 2014

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation.

Founder 254

Founder Cram Down Angel Investor Equity 254

Startup Professionals Musings

APRIL 17, 2013

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation.

Cram Down 230

Cram Down Angel Investor Equity Dividend 230

Startup Professionals Musings

NOVEMBER 11, 2015

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation.

Cram Down 120

Cram Down Angel Investor Equity Dividend 120

Rob Go

SEPTEMBER 2, 2014

I’ve seen a few cases now where a number of very high-quality institutional investors were interested in investing in a company at valuation, but a non-institutional investor was willing to set terms 1.5 – 2X higher than that valuation. Getting Crammed Down. The institutions walked, but the round got done.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66