Startup Professionals Musings

JANUARY 27, 2012

It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” Anti-dilution protection. Seat on the board.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

Startup Professionals Musings

SEPTEMBER 14, 2010

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” Anti-dilution protection. Seat on the board.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Gust

OCTOBER 17, 2011

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” Anti-dilution protection. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Gust

OCTOBER 21, 2011

What these approaches have in common is that they cap the investors’ upside such that even in the most spectacular of liquidity events, unless the notes convert to equity first at a lower valuation, angels don’t get anywhere near the payoff awarded to equity holders. Most would agree this is not a fair outcome.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

VC Cafe

SEPTEMBER 6, 2011

Deal structure – I could write a full post just on this, but some aspects that were brought up are the need to agree on a reasonable valuation, what investment vehicles are used (convertible debt vs stock, options and warrants and other non-dilutive mechanisms). Are you offering them a board seat or a chairman role?

Startup 133

Startup Cofounder Warrant Stock Options 133

K9 Ventures

OCTOBER 10, 2017

The amount of capital (and therefore the resulting valuation) also sets the stage for the next round of financing for a company. This is another common question, especially from founders who are worried about how they now have one more round of dilution to take before they get to their Series A.

Seed Stage 82

Seed Stage Finance Later Stage Mezzanine 82