SoCal CTO

SEPTEMBER 27, 2011

I've talked about this topic before in How Investors Think About Valuation of Pre-Revenue Startups. You can also take a look at StartupRoar 's topics: Startup Valuation , Pre-Money Valuation , and Early Stage Valuation. Same Value for Sweat Equity as Investment Dollars?

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

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

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

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Here’s the “what.”. And here’s the “why.”.

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

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

JUNE 22, 2011

In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. million pre-money valuation is now raising $1 million at a $12 million valuation the next investor has nowhere to go but up (or sit out the investment).

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

SoCal CTO

FEBRUARY 2, 2011

Because of this, I've always tried to stay up-to-speed on how early-stage investors look at valuation of companies. Bill Payne is an expert on how early-stage investors should look at valuation. He just post: Establishing the Pre-money Valuation of Pre-revenue Startups. What are they really looking for?

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

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

Lightspeed Venture Partners

NOVEMBER 19, 2012

He developed the product out of necessity. 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. He was pretty impressive.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

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. Ask yourself, where is your startup currently struggling? What could be improved?

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Agile VC

MAY 26, 2011

I certainly bear no ill will to the various firms that ultimately passed on our fundraise… as a seed stage VC myself now I can appreciate how hard it is evaluating companies at the earliest stages of development. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

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

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. The company came back and offered him 20% of the company for the $200k (an $800k pre money valuation). They were seeking $200k for 10% of the company (a $1.8M

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

The Startup Magazine

SEPTEMBER 12, 2019

Focus on Product Development First. We prioritized validation from our customers by listening carefully to what our customers wanted and focusing on early-stage product development. During the ten years we spent as a self-funded company, we worked tirelessly on product development.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

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

Both Sides of the Table

MAY 30, 2018

If you are aware you may have some issues or if you are constantly getting feedback that you may have issues then it’s a smart strategy for you to develop a set of talking points to get in front of the issue when asked. What expectations do you have about valuation? Maybe she wants slightly higher but she certainly won’t want lower.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

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

Andrew Payne

MARCH 8, 2016

From a statistical analysis of over 6,000 startups, the paper (and article) argue (roughly) that founders with board control, the CEO position, or both, can “harm the firm’s prospects, reducing pre-money valuation by up to 22%.” ” Really?

Pre-Money Valuation 40

Pre-Money Valuation Founder Valuation Startup 40

Altgate

OCTOBER 18, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Startup Executive Compensation Scorecard Pre-Money Valuation vs Number of Founders → No one wants to tell you your baby is ugly Posted on October 18, 2010 by admin No one wants to tell you your baby is ugly.

Pre-Money Valuation 59

Pre-Money Valuation Venture Capital Valuation Lean 59

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. Well, it had to happen.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

www.mattbartus.com

DECEMBER 9, 2012

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. Take a look at the numbers: Pre-Money. One possibility is to negotiate a higher valuation and offer warrants (i.e., Post-Money. Option Pool.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

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.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

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

Gust

OCTOBER 12, 2011

To angels , prepayment defeats the entire purpose of making a convertible note investment in an early stage startup: A 6% or 10% return within a year or two isn’t worth the risk associated with making an unsecured, non-recourse loan to an unproven, development-stage company with little or no revenue. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Both Sides of the Table

APRIL 14, 2010

Reputation – Equally, the investor might not be worried about squeezing out your existing VC, per se, but doesn’t want to develop a reputation as a VC with an edge. Some investors love to get out sharp elbows. Most play the gentlemanly sport. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

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

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

Pascal's View

AUGUST 21, 2011

These markets are not yet well developed and remain asymmetric. This was the sixth straight quarter in which their barometer showed an average valuation increase, including a 28% bump the prior quarter. Thomson Reuters data indicates that pre-money valuations for VC deals in the U.S.

Valuation 50

Valuation Social Media Media IPO 50

Scott Edward Walker

APRIL 9, 2012

Indeed, as a corporate lawyer for 18+ years, I have seen this development first-hand. As a result, the pendulum has swung dramatically in the founders’ favor, and the issuance of convertible notes for seed financing has never been more prolific. This post is the first part of a three-part primer on convertible note seed financings.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

crowdSPRING Blog

APRIL 26, 2013

Why developers are leaving the Facebook platform | by Andrew Chen – [link]. Q1 Venture Capital Spending & Number Of Deals Down, M&A Activity Drops 44 Percent And Pre-Money Valuations Plummet – [link]. 11 Things I Wish I Knew About Django Development Before I Started My Company – [link].

Social Media 90

Social Media Small Business Design Media 90

thestartuplawyer.com

FEBRUARY 24, 2010

I think you'll have trouble developing your idea without bringing on people, probably as co-founders. Even if you are able to do so w/o bringing these skill people on, potential investors will likely ding you since you can't implement the idea (even if already 'developed').

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

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. In my years of investing, I’ve developed a set of tough questions that are sure to elicit both information and a vibrant dialog – questions not on the usual checklists of angel groups or investors.

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. There never has to be atime when you have no revenues.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

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. Paul Erdos wasparticularly good at this.

Startup 105

Startup Cofounder Software Stock 105