David Teten

JANUARY 19, 2021

Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder. See Why Are Revenue-Based Investors Investing in Women & Diverse Entrepreneurs? Less established regulatory framework. . Short track record.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Austin Startup

JULY 6, 2018

Ask the Users Startup Accelerators: Bundled and Unbundled Over the past several years, accelerators have emerged as a powerful filtering and signaling mechanism in early-stage startup ecosystems, allowing high-potential young startups to connect with investors, advisors, and other strategic partners far faster and more efficiently than before.

Dilution 48

Dilution Startup Technical Review Equity 48

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. According to John Borchers, Co-founder, Decathlon is the largest revenue-based financing investor in the US.

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

JUNE 5, 2011

I have conversations with entrepreneurs and other VCs on a daily basis about fund raising, the prices of deals, how much companies should raise, etc. These are not scientific, just anecdotal and just trying to provide some transparency for entrepreneurs on what I’ve seen the market. And of course there are always outliers.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Startup Professionals Musings

SEPTEMBER 5, 2016

In my experience as an advisor to aspiring entrepreneurs, I often encounter the myth that an initial startup requires investors. The media tends to highlight experienced entrepreneurs who succeed with early new venture funding, like Uber’s Garrett Camp , but fail to point out the more common bootstrapping successes.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

ReadWriteStart

SEPTEMBER 10, 2010

During this week's roundtable we discussed an area that deserves a serious look from entrepreneurs: Rural BPO. Today, I invited entrepreneurs to come up with ideas, apply the 1M/1M methodology to it, and come discuss with me at these roundtables. I call it drip-financing. In 1M/1M, our preferred financing strategy is customers.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. So how DOES a VC think about financings at early stages? It’s very simple. Size of my check.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

OCTOBER 7, 2014

This is something I think entrepreneurs don’t totally understand and it’s worthwhile they do. There weren’t a lot of seed funds in 2007 so this was often done by angels, funding consortia or sometimes early-stage funds that existed then (First Round Capital, True Ventures, SoftTech VC, etc.). Why the latter?

Cap Table 399

Cap Table Silicon Valley Term Sheet Finance 399

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Your A round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. In these early times, some startups may be hesitant to pursue this path because of the uncertainty and perceived risk. But many are. Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. In these early times, some startups may be hesitant to pursue this path because of the uncertainty and perceived risk. But many are. Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Both Sides of the Table

SEPTEMBER 25, 2011

Yesterday I saw a Tweet from Chris Sacca fly by that prompted me to want to write a blog post helping entrepreneurs understand why they should push back against VCs asking for “super pro-rata” rights. They might own 8% of your company after the first funding but demand up to 33-50% of your next round of financing.

Entrepreneur 310

Entrepreneur Dilution Finance Silicon Valley 310

Austin Startup

FEBRUARY 13, 2019

Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more. Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. I speak from experience.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Both Sides of the Table

AUGUST 30, 2010

I’ve written about the topic of convertible debt at length before specifically about how angels & entrepreneurs should think about pricing. Clearly this is is a trend and a topic that is interesting entrepreneurs. a priced/valued preferred stock financing)? a priced/valued preferred stock financing)?&#.

Equity 319

Equity Early Stage Angel Investor Valuation 319

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. I hesitate to use a quote from one of the greatest people ever to grace planet earth, and certainly the question of how to structure early stage investment is a laughable cause as compared to the rights that Ghandi (also a lawyer) fought to advance.  SeriesSeed.com. Blog Archives.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. Same, except at the option of the noteholders (per the term sheet example above).

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

View from Seed

JANUARY 26, 2016

There are a number of factors that have contributed to the rise of pre-seed rounds, but the strongest have been the frothy late-stage financing market, coupled with both the scaling-up of some of the early winners in the institutional seed ecosystem and the scaling-down of some larger funds that retrenched after the financial crisis.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. Was Paul Graham right in his “high resolution” financing post? But entrepreneurs – convertible notes have no MINIMUM!

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Both Sides of the Table

DECEMBER 1, 2009

I was reading one of my favorite websites for entrepreneurs, VentureHacks, this weekend and noticed that they are running a long piece on how to pick a co-founder. You agonize over whether it is better to take a “A investor&# for 30% dilution or a “nice to have&# investor for 25% and on better terms. You’ll be fine.

Hiring 289

Hiring Cofounder Dilution Startup 289

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Less or no dilution. These entrepreneurs want to maintain two major options: 1) To raise VC later (or not), and/or. 2) To sell their businesses when they want – early, mid term, or never.” .

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. Although it certainly doesn’t feel that way when you’re an entrepreneur trying to raise money for your own company. The question most entrepreneurs keep asking themselves is why isn’t that capital chasing me?

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

APRIL 14, 2012

What I want to talk about today is one of the insider baseball discussions of our industry this past week: The odd fact of the $500 million financing round completed just before the company sold for a B. ” In this week’s discussion with entrepreneurs I think the word impending wasn’t used often enough. Hang on, Mark.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

BeyondVC

FEBRUARY 6, 2007

I can also say that there is a similarly fine line between dilution and delusion but this one is easier to draw. Unfortunately, the entrepreneur was not terribly pleased as he had a much higher expectation for round size and valuation in his head. The post The fine line between dilution and delusion appeared first on BeyondVC.

Dilution 60

Dilution Term Sheet Valuation Early Stage 60

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. It’s like we need a finance 101 course for entrepreneurs.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

OCTOBER 8, 2014

Cautionary note: No competent VC is actually fooled when you show up after raising $6M in seed financing and say you’re now raising an A! This is something I think entrepreneurs don’t totally understand and it’s worthwhile they do. Marc Andreessen (@pmarca) October 7, 2014. Why the latter? and there''s always a but].

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

www.instigatorblog.com

OCTOBER 23, 2010

The more that those first employees feel like founders in terms of their ownership, emotional attachment, responsibility and overall understanding of the startup process (including financing , running day-to-day activities, etc.) I do believe that early employees should trade salary for equity. the better the startup will be.

Equity 41

Equity Employee Startup Vesting 41

Rob Go

JUNE 8, 2014

Raising capital is really difficult, no matter what people say about the influx of seed and early-stage dollars into the startup eco-system. I know very strong entrepreneurs that need to grind really hard to get seed rounds done, so I definitely don’t want to take away from the challenge of doing that.

Dilution 69

Dilution Early Stage Angel Investor Venture Capital 69

VC Adventure

AUGUST 30, 2010

I think the answer to these questions are that 1) it’s not at all clear that this trend is as definitive as Graham suggests; 2) it’s a mixed bag for entrepreneurs (more positive in the short run, potentially negative in the long term); and 3) it’s clearly not a positive trend for early-stage investors. Has Convertible Debt Won?

Angel Investor 103

Angel Investor Early Stage Equity Valuation 103

David Teten

JANUARY 21, 2021

VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020. 4 from our first year cohort of 10 crossed $1m ARR with less than 15% equity dilution while growing 2x; all are operationally profitable.

Equity 78

Equity Revenue Cofounder Colorado 78

Transformify

JULY 23, 2018

To boost innovation and SME sector growth, the EU Commission has launched the SME Instrument of the Horizon 2020 program – the largest non-dilutive fund in the world. Why non-dilutive? As of 2018, the removal of pre-defined topics allows entrepreneurs from all sectors of the economy to apply with their disruptive innovations.

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66

This is going to be BIG.

DECEMBER 28, 2013

If you are a venture capital investor and you''re not preparing yourself to succeed in a more diverse ecosystem of entrepreneurs, you''re just going to get left behind. The classes got too big and quality was diluted because, by PG''s own admission, YC " grew too fast.". YC''s best investing days may be behind it. That''s 25%.

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

Berkonomics

AUGUST 27, 2015

He has written numerous books and articles for entrepreneurs and investors, and was the publisher and editor-in-chief of Venture Magazine. Mr. Lipped addresses the issue of exits, and whether entrepreneurs should take the long view or cash out quickly when the opportunity arises. By Arthur Lipper.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

aweissman.com

JANUARY 30, 2010

Venture Innovation, or why the First Round Capital Entrepreneurs Exchange fund is good. There is an amazing wealth of innovation around early stage venture financing, most of which developed in just the past few years. In many cases they are run by operational entrepreneurs themselves. aweissman.com. Jan 30, 2010.

Early Stage 46

Early Stage Entrepreneur Cofounder Framework 46