Both Sides of the Table

JULY 23, 2014

pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. Just 3 years ago there was talk of institutional investors “not being able to write small enough checks.” ” Stated simply – if you seed funded Uber at $4.5m and hasn’t abated.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Startup Professionals Musings

NOVEMBER 26, 2012

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

SoCal CTO

FEBRUARY 2, 2011

A lot of my time is spent helping early-stage companies get to proof points so that they can raise capital. They might have some seed money and are thinking or raising a Series A based on success of an early release (MVP). Bill Payne is an expert on how early-stage investors should look at valuation.

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

Startup Professionals Musings

SEPTEMBER 30, 2011

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Agile VC

MAY 26, 2011

In another we decended into a debate about our 5 year forecasts (I built the models so fielded most of these questions), and it became clear they probably weren’t the best fit for our Series A round (this group is no longer in the early-stage VC business). And a third firm “pressure tested” (i.e. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Gust

NOVEMBER 18, 2012

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Startup Professionals Musings

SEPTEMBER 6, 2010

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. Do you have relationships with other investors at the next stage of the investment lifecycle?

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

Both Sides of the Table

FEBRUARY 17, 2011

Because times are slightly better now for fund raising I’d probably say two extra things: a) it may be worth a modest increase in your team size / activities / development IF you can raise more money to do this now & b) if you can raise more than you need right now (within reason) without too much extra dilution I would do so.

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

MAY 30, 2018

If a firm typically invests $5 million in its first check and its target is to own 20% or more that means that most if its deals are in the $15–20 million pre-money range. If you’re raising at $40 million pre then you might be out of their strike zone. What expectations do you have about valuation?

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Gust

OCTOBER 20, 2011

This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. In most regions, the pre-money valuation does not vary significantly from one business sector to another.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

OCTOBER 12, 2011

Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs. 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

YoungUpstarts

SEPTEMBER 11, 2013

Sometimes the list of challenges may feel never ending – from writing the business plan to finding the right partner – but one of the single most important challenges entrepreneurs face is calculating a realistic, defensible pre-money valuation. . What is a pre-money valuation and why should I care?

Pre-Money Valuation 133

Pre-Money Valuation Valuation Angel Investor Cofounder 133

Berkonomics

NOVEMBER 4, 2016

Originally created in the mid 1990’s to help with the imprecise problem of how to value early stage companies, especially those in technology, I developed what soon became known as “The Berkus Method” when published in the popular book, “Winning Angels” by Harvard’s Amis and Stevenson with my permission in 2001.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

Professor VC

JANUARY 17, 2008

Again, I see nothing wrong with this, although entrepreneurs often prefer convertible debt as it defers the valuation discussion and leaves the Series A price for the venture firm to set. He also said they typically only invest at a $1 million pre-money valuation or less.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Feld Thoughts

JULY 29, 2011

Through a series of conversations, Jane and Dick have come up with the idea to develop a social network tailored to the medical community. Jane felt comfortable with receiving 10% for $50k, but no less, so they agreed on a $450k pre money valuation of their startup. warrants or discounts).

Equity 137

Equity Finance Pre-Money Valuation Denver 137

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).” You rarely find full ratchets in early-stage deals any more. That’s not possible.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

VC Cafe

SEPTEMBER 26, 2022

It can mean addressing the UN’s SDGs (Sustainable Development Goals) and thinking about the impact of your startup on wider society and the planet as a whole. We should all care about the UN Sustainable Development Goals. ValuatIon should be a function of value, not ego. Our goals, their goals. subtract $250,000.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. Another critical aspect of the cap table is that it represents money , a potentially significant amount of money for the company.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Berkonomics

DECEMBER 19, 2013

In the process of raising funds to create and develop a business, entrepreneurs make many statements to those they seek to attract as investors. If you are an investor in an early stage venture, wouldn’t a dialog using these questions help greatly in defining and perhaps reducing your risk? By: Arthur Lipper.

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

www.paulgraham.com

APRIL 28, 2010

Then you can gradually transformyourself from a consulting company into a product company, and haveyour clients pay your development expenses. An advantage of consulting, as a way to develop a product, is thatyou know youre making something at least one customer wants. The problems are different in the early stages.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Feld Thoughts

JULY 14, 2015

But instead of adding it on to the note or doing an equity round with a price, which could still be an early stage price but below the cap, they make the argument that since the company couldn’t raise a round, the company is worthless. So the new investment gets 60%, the founders get 39.9%, and the $1m of seed money gets 0.1%.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

www.paulgraham.com

OCTOBER 23, 2010

People who dont want to get dragged into some kind ofwork often develop a protective incompetence at it. This was not uncommonduring the Bubble, especially in companies run by business types, who thought of software development as something terrifying thattherefore had to be carefully planned. At this stage the company is just a bet.

Startup 105

Startup Cofounder Software Stock 105