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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. No hidden terms.

Valuation 405
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Top 30 Startup Posts in June 2010

SoCal CTO

Creating Incremental Strategic Value - Ask the Angels , June 17, 2010 We can easily overlook the level of demand pull when we are assessing strategic value. haven't raised any money for my companies that required a term sheet (just friends & family money in my first company), and yet I still think it is important for a number of reasons.

Cofounder 175
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The Truth About Convertible Debt at Startups and The Hidden Terms You Didn’t Understand

Both Sides of the Table

I can’t say it much simpler than this: “What if I took some of the worst, most egregious terms in a standard term sheet and made them the defacto standard in most convertible debt deals? Let me explain it more clearly in equity terms. Some thoughts on raising angel money. That’s right.

Ratchet 354
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How to raise money for your startup from VCs and investors in Asia

The Next Web

The term sheets tend to be fairly standardized and straightforward as well. Term sheets are littered with many more obscure protective provisions and onerous terms. This is driven both by supply and demand. From there, you typically get the thumbs up or down within a day or two.

Asia 132
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Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. It is essential to understand the funding structure stated in your term sheet and the advantages and disadvantages it may have for your business.

Startup 150
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On the Road to Recap:

abovethecrowd.com

The Sharks Arrive With Dirty Term Sheets. Dirty” or structured term sheets are proposed investments where the majority of the economic gains for the investor come not from the headline valuation, but rather through a series of dirty terms that are hidden deeper in the document. Who are the Sharks?

IPO 40
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Understanding the Risks of VC Signaling

Both Sides of the Table

I believe these VC funds have suffered some amount of reputation fall out. We used the Y Combinator open source term sheet. We signed the term sheet within 48 hours and had funded in under 2 weeks. Great reputation. If you accept my terms you’re done. They elected to sign my term sheet.