SoCal CTO

SEPTEMBER 27, 2011

For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. For example, suppose you're just two founders and you want to hire an additional hacker who's so good you feel he'll increase the average outcome of the whole company by 20%. n = (1.2 - 1)/1.2 =.167. and we have 11.1%

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Both Sides of the Table

SEPTEMBER 5, 2012

Because convertible debt deals often have both a ‘full ratchet’ and often have ‘multiple liquidation preferences’ “ Yup. What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. That’s right.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. In addition, the competition for and the cost of hiring people, especially in the San Francisco Bay Area, has gone up dramatically. As it happens almost every few years there was a new normal developing. Valuations are rising to match.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Up and Running

DECEMBER 30, 2015

Setting too high a valuation. Setting too high a valuation during a funding round can set you up for failure, setting expectations too high for ensuing rounds. It might be difficult to exceed your valuation, making investor relations difficult. – Phil Chen, Systems Watch. Timing is everything for valuation, market, and team.

Due Diligence 84

Due Diligence Valuation Liquidation Preference Redemption 84

www.mattbartus.com

DECEMBER 9, 2012

How to pump up your VC valuation. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. One possibility is to negotiate a higher valuation and offer warrants (i.e., Home About Matt Client references Contact. 10,000,000.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Both Sides of the Table

SEPTEMBER 28, 2013

The don’t understand VC liquidation preferences or multiple return expectations. Dilution / valuation. I hate when companies publish too much information about the total stock option allocations, the company valuations, the dilution faced in every round, etc. They see the dollar signs and the victory.

Startup 417

Startup Dilution San Diego Stock Options 417

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have.

Equity 40

Equity Technical Review San Jose Stock 40