Both Sides of the Table

FEBRUARY 17, 2011

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. You’re offered a $9 million pre-money to raise $3 million (e.g. 5 million raised at a $9 million pre-money valuation or 35.7%

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Lightspeed Venture Partners

NOVEMBER 19, 2012

Interestingly, this new deal actually lowered the pre money valuation for the company. 75,000 for 10% implies a $675,000 pre money valuation. 150,00 for 20% implies a $600,000 pre money valuation.

Pre-Money Valuation 161

Pre-Money Valuation Valuation Alabama Churn Rate 161

Lightspeed Venture Partners

OCTOBER 22, 2012

The founders have more demand than they know what to do with, and want to raise $55k for 5% equity in the company to buy a second truck. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). Freaker USA.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

ithacaVC

APRIL 25, 2012

If you want to scare off VCs, start your pitch with “we are looking to raise $X at a pre-money valuation of $Y” Stating how much you want to raise is fine and recommended. However, stating a desired pre-money valuation early in the process is not a good idea. Here is why.

Valuation 49

Valuation Pre-Money Valuation Liquidation Preference Preferred Stock 49

Tim Keane

JANUARY 12, 2010

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. An average of these ranges results in a pre-money valuation of about $4MM.

Term Sheet 68

Term Sheet Valuation Dividend Pre-Money Valuation 68

Both Sides of the Table

MAY 30, 2018

How you talk about valuation will of course depend on how well your business is performing and how much demand you have from other investors. If I assume 20–25% dilution that implies a price of between $20–28 million pre-money valuation ($25-$35m post-money). I’m not so naive as to completely believe that?

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Gust

OCTOBER 21, 2011

a) payable upon demand as of the closing of such transaction; or. (b) This is particularly true under the severe time pressure that tends to accompany M&A. “ Payable upon demand as of the closing of such transaction ” is the fallback position described above as #1.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

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

Rob Go

AUGUST 29, 2016

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. That is, the valuation of the company prior to the investment of new capital.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Gust

OCTOBER 12, 2011

Thus, it’s in everyone’s best interest to see the startup raise more capital rather than declaring default and demanding repayment. First, a word about the maturity date. In my experience, a term of 12 to 24 months is common, with 12 months being on the short end.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Pascal's View

AUGUST 21, 2011

Does the primary and secondary capital raising prowess of companies such as Facebook, Linked In, Pandora, Twitter, Groupon, Zynga, and others, mean that we have finally crossed the threshold and reached a sustainable new valuation paradigm (it’s different this time, really), or is this another accident now happening in real time?

Valuation 50

Valuation Social Media Media IPO 50

Both Sides of the Table

SEPTEMBER 5, 2012

As in, “your money into my company will convert at a 15-20% discount to the next round of capital I raise with a maximum price of $8 million pre-money valuation (or whatever the cap was).” .” What this did is set the maximum price of the deal. Convertible debt with no cap is stupid for investors.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

David Teten

NOVEMBER 15, 2013

I have frequently heard the expression from other investors, “We can put a lot of money to work here.” This is the psychology that drives VCs to load up a company with more capital, rationalizing that $5m at a $20m pre-money valuation is little different than $10m at a $40m pre-money valuation.

Management 114

Management Pre-Money Valuation Venture Capital Valuation 114

www.paulgraham.com

APRIL 28, 2010

A lawyer I asked about it said: When the company goes public, the SEC will carefully study all prior issuances of stock by the company and demand that it take immediate action to cure any past violations of securities laws. In an IPO, it might not merely addexpense, but change the outcome. So theyre going to raise $200,000.

Technical Review 76

Technical Review Startup Software Review Vesting 76