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Vulture Capital: Why Early Stage VC Could Kill Your Startup

The Startup Magazine

While the rewards may be a boon to their company in the short term, the consequences of accepting outside funding too early can be debilitating. There’s a reason why I refer to early-stage VC funding as vulture capital, and to be honest it’s pretty accurate. Money in Exchange for Control. It certainly was for us.

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The Changing Structure of the VC Industry

Both Sides of the Table

pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. ” The pioneering fund of funds realize that their source of differentiation is much more about the latter than the former. ” Stated simply – if you seed funded Uber at $4.5m

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8 Questions to Help Decide if You Should be Raising Money Now

Both Sides of the Table

million and you’re an early stage business this is probably a fair deal. 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% What might future markets hold in terms of valuations? 25% dilution).

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Don’t Pitch A Venture Capitalist Without This Checklist

David Teten

I’ve listed below the points I recommend you cover when pitching your business to early-stage investors, including but definitely not limited to ff Venture Capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.”

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What to Expect When You're Expecting Venture Capital Returns

This is going to be BIG.

After factoring in price and mortality rate (risk), every stage's investor would be trying to get a return that satisfies their LPs--and I think that's the same across all early stages. I assumed the following: Seeds are done as a $1mm round on a pre-money valuation of $5mm. Exits are $250mm.

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Time is the Enemy of All Deals

Both Sides of the Table

million at a $15 million pre-money valuation. We had people hearing through the grapevine that we were about to raise money and new investors started calling us to get in on the deal. Had I delayed my fund raising in 99/00 by even 3-4 weeks I’m convinced I would not have raised any money at all. We hit sub 2 weeks.