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When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

And as my partner Rob Go likes to say, “Time kills all deals.”). So What Should Founders Do? Lower-Than-Market Value.

Startup Blog: Take a Stand!

Taffy Williams

It may be around deal structure, testing or design of product, new hires, downsizing or firing, how much to spend on a program or some other issue.

How VCs Think About Adding New Partners

Both Sides of the Table

In Kara’s case I got to see her work on deal structuring first hand having worked closely with her on her board at P.S. XO.

Your (Potential) Investor's Business Model

David Lee

believe that this is important for founders to remember as they raise money. Different business models lead to different approaches to valuation, deal structure and diligence process. Talk to other founders who have worked with them. ” - Jeff Bezos, 9/6/12, on Amazon’s business model. Ask them directly.

My First Investment

A VC : Venture Capital and Technology

They had negotiated a deal to purchase an editor called BRIEF and a version control package whose name escapes me (might have been VCS?) So I negotiated a deal to invest the funds into the company for a revenue share on the sale of both products plus a warrant to buy stock in SDC. That deal taught me a few big lessons.

Acquisitions Aren't About the Money

Fresh Inc.: The Staff Blog

When PopCap was being sold, we spoke to multiple potential acquirers, and in the end were extremely fortunate to get a great deal from a great partner.

Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. But due diligence and paperwork take time, and can change everything.

Who Invests In Investors: Homebrew LP Shares VC Performance Goals, Importance of Diversity & What They Look For In New Funds

Hunter Walker

The James Irvine Foundation  joined us in Fund I and has been a great partner since. How could we not get up each morning excited to help that cause!?!

LP 36

Startup Business Development Strategies: 7 Tips For Putting.

Seed Stage Capital

Any meaningful partnership deal will require a significant amount of time and attention from your management team. Focus on the right targets.

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Not necessarily a bad deal, but if you didn’t have that in your head you’re setting yourself up for a big surprise. Venture Economics

Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups.  In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal.  This paragraph is the heart of the whole deal.  Amount of Financing :  Up to $600,000 may be issued.

10 Tips for Startups Raising Money from Angels

VC Cafe

Management team that sounds and looks like they can execute the plan – if you didn’t finish building the team yet, make sure you have at least one co-founder with complementary skills. 10 tips for raising money from business angels. Have an upfront proposition – how much money are you raising? Have a sigle main idea.

Should You Sell Your Business? 7 Things to Consider

Fresh Inc.: The Staff Blog

Prior to the process, my business partner and I wrote down the criteria for the deal that we would accept. Have you sold a company recently?

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Not necessarily a bad deal, but if you didn’t have that in your head you’re setting yourself up for a big surprise. Venture Economics

SeedRuption

charliecrystle.com

If I'm a hot deal in NY or SOMA, maybe I can raise and close an angel round in a few weeks. So, context matters to deal structure. So maybe the guidance for deal docs should be this: Convertible Debt: for founders who need a rolling close so the cash can come in as it's raised. Fred followed up.

How to value your company for sale (Part 2)

A Smart Bear: Startups and Marketing for Geeks

Remember how the buyer has his own way of valuing the deal ? Would you take a lower “number&# to get Deal B? Do you prefer Deal B?

Walker Twitter Highlights: August 11th – 21st

Scott Edward Walker

p2Pkk0 cc:  @jack “One by one, all the things founders dislike about raising money are going to get eliminated.” prAYlf Quora-Related Quora: What deal structure should be in place for a friend/family investment of < 20k in your startup? ” -Warren Buffett   nyti.ms/rrLud7 ” -Paul Graham   bit.ly/prAYlf

Piercing the Corporate Veil of Sweat Equity

grasshopperherder.com

« Thanks but No Thanks – Things to Avoid When Recruiting Co-founders Why is Cyber Squatter a Bad Word? Finding Co-Founders (11).

Knowing When It’s Time To Sell Your Startup

YoungUpstarts

The founders sold the two year old company to eBay in 2005 for $2.6 The deal closed only four months later in August of 2012. Zappos.

in search of.the ideal term sheet

Seed Stage Capital

So if you raise $10 million at a 3x liquidation preference and then sell for $25 million, founders and emplyees get nothing. Please share it!

The Corrosive Downside of Acquihires

Fresh Inc.: The Staff Blog

The Aqui-hire Business Many buying companies price these deals on the basis of $1 million per engineer on the team for an early-stage deal.

Clean Deal Terms

David Lee

Sam Altman has a nice post here on a founder-friendly term sheet. He said one thing there that I agree with 100%, among others: I have an allergic reaction to complex deal structures, as they invariably end up with all sorts of unintended consequences. link). One glaring example is the “super pro-rata right of X%.”

A Primer on Angel Investment ‘Simple Term Sheets’

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. But due diligence and paperwork take time, and can change everything.

Knowledge Is Power: Convertible Note Financing Terms, Part V

Gust

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. It’s common to skip the questionnaire when dealing with “known quantity” institutional investors provided they are willing to make the representations in the purchase agreement.

Should You Co-Found Your Company With a Software Development Shop (2 of 2)?

David Teten

What are the terms of their relationship with the founder? Individual companies can be built by strong founders. What are the timelines?

Knowledge Is Power: Convertible Note Financing Terms, Part IV

Gust

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes.  To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. 

Startup Blog: 7 Questions You May Get from Potential Investors

Taffy Williams

Many founders have eventually been replaced by investors or the board at some point in the development of the company. Who’s the Boss?

The downside of high valuations

StartupCFO

When it comes to deal structuring, the higher you push the valuation, the more “protections&# investors will build in. This is up from 17% ( a small jump). - 53% of deals had participating prefs. So, frothy times aside, the right deal is about more than the share price today. Valuations are high.

You Think It's About the Money. It's Not About the Money.

Fresh Inc.: The Staff Blog

When PopCap was being sold, we spoke to multiple potential acquirers, and in the end were extremely fortunate to get a great deal from a great partner.