Both Sides of the Table

FEBRUARY 6, 2013

I am fond of quoting that about 70% of my investment decision of an early-stage company is the team. My rationale is simple: everything goes wrong and only great teams can respond to competitors, markets, funding environments, staff departures, PR disasters and the like. Final startup grind from msuster.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

Startup Professionals Musings

SEPTEMBER 13, 2011

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. There are other chasms out there just as deadly as the technology one, such as the ones below: Market requirements chasm. Marketing and sales chasm.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

Both Sides of the Table

MAY 28, 2018

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. It’s true that some later-stage private equity firms like to fund “roll ups” (a company that acquires many related companies in it sector), but this is seldom the domain of VCs.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

ReadWriteStart

JUNE 1, 2020

The next reason is to establish a competitive advantage over your competition and quickly acquire a substantial market share. Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. These usually play a role in the very early stage of your business, primarily pre-revenue.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. It meant that the management teams hadn’t figured out a product / market fit for their own businesses. Want to sell early? Want to cut prices and go for market share? You’re in control.

Merger 276

Merger Technical Review Early Stage Dilution 276

The Startup Magazine

MARCH 14, 2022

Advertising and marketing tech. The journey of a startup is pretty adventurous, and the stages involved are as follows: 1) The ideation phase. Here the company looks to grow and strives to create a dominant position in the market. At this stage, the founder mainly raises funding from their sources or family and friends.

Technical Review 146

Technical Review Due Diligence India Startup 146

Startup Professionals Musings

APRIL 23, 2017

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. There are other chasms out there just as deadly as the technology one, such as the ones below: Market requirements chasm. Marketing and sales chasm.

Customer 191

Customer Entrepreneur Technical Review Dilution 191

Both Sides of the Table

OCTOBER 12, 2014

Prorata rights are one of the most important rights of a private market technology investors and yet are seldom fully understood. They often create the biggest tensions between investors who are investing at different stages in the business. I have seen bad behavior from later-stage VCs, believe me. How does this get resolved?

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

MARCH 19, 2013

The line of reasoning goes, “Services businesses are not scalable and the market won’t reward this revenue so make sure that third-parties do your implementation or clients do it themselves. If you’re an early-stage enterprise startup services revenue is exactly what you need. That it is non-dilutive financing?

Technical Review 403

Technical Review Software Review Startup API 403

View from Seed

MAY 2, 2019

This is the logical path that one would think is pretty “standard” for early stage companies. The challenge with pre-seed rounds is that pricing will sometimes be pretty dilutive. So your net dilution may end up worse and you may miss out on working with a really hands-on pre-seed partner early in your company’s life.

Early Stage 214

Early Stage Dilution Valuation .Net 214

This is going to be BIG.

JANUARY 18, 2024

While they might be generally smart, they’re unsophisticated investors who don’t know what the market is for where you are. They try to sign simple, market-standard deals, keeping the bells and whistles to a minimum while focusing on just a few critical deal points that are most likely to move the needle on their returns.

.Net 88

.Net Cap Table Startup Technical Review 88

Both Sides of the Table

SEPTEMBER 17, 2011

I recently wrote a post about why I didn’t think early-stage startups should have COOs. Still, I’ll bet that functionally you divide areas of competence like sales & marketing, product, engineering, biz dev, etc. Dilute your cash, equity or both. I expected it to be controversial and it was.

Operations 292

Operations CTO Hire Startup Early Stage 292

YoungUpstarts

OCTOBER 24, 2013

“The reality is that there has not been a reliable, simple, or cost-effective way to calculate an early stage company’s valuation – which is why so many entrepreneurs and angel investors get it wrong,” says Alan Lobock, co-founder of Worthworm.

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

YoungUpstarts

MAY 6, 2019

In this article, we will discuss why it is important to understand the whole startup stages concept before you start a business to get the most benefit. Early Stage. This startup stage starts from the day you decide to work on a startup idea. Here is the complete list of points available in early stage startup.

Startup 113

Startup Technical Cofounder Merger Early Stage 113

Startup Professionals Musings

NOVEMBER 10, 2012

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. There are other chasms out there just as deadly as the technology one, such as the ones below: Market requirements chasm. Marketing and sales chasm.

Startup 254

Startup Technical Review Dilution Early Stage 254

This is going to be BIG.

NOVEMBER 28, 2021

In fact, it’s why many startup folks leave the early stage world to go over to the big company side—because the benefits tend to be much better. Take a little more dilution, raise a little more money, and spend on the most ignored personal goal in the market.

Hiring 179

Hiring Early Stage Marketing Term Sheet 179

Both Sides of the Table

JULY 22, 2010

Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. The more senior members you have (say you already have a CEO, CTO, VP marketing, VP Biz Dev, VP Products) then the less options you’ll need and vice versa. This is a shame.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

SEPTEMBER 10, 2021

With the enormous changes to our economies and financial markets?—?how how on Earth could the venture capital market stand still? One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

YoungUpstarts

JULY 31, 2019

For start-ups in hot markets, the problem also manifests itself in fundraising. But “fundraising debt” comes into the picture when you raise too much too early, diluting your business at the beginning of the venture, with no real plan or unrealistic projections for how your business will scale.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. What sized team can I afford in order to sell, market & provide service to these customers? But expanding beyond our core customers was going to take more effort than simply launching in new markets. How profitable is my product or service?

Operations 286

Operations New York City Technical Review Startup 286

Startup Professionals Musings

DECEMBER 11, 2022

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Both Sides of the Table

SEPTEMBER 25, 2010

I talked about this in my social proof post where I gave some suggestions about how to get the early guys off of the fence. Most early-stage entrepreneurs who have worked with me (either as an angel or as a seed VC) know that I don’t rely at all on the social proof of other investors. When I’m in, I’m in.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

OCTOBER 1, 2009

In the first post in this three part series I described why I believe the VC market froze between September 2008 – April 2009. When the market run started in March people were relieved that “the world wasn’t ending” so they started spending again. Unemployment coupled with a stock market drop will stop this spending cold IMHO.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Startup Professionals Musings

APRIL 12, 2021

These programs don’t usually ask for equity, and they are particularly targeted to the early stages of your business to facilitate growth and survival. In these cases, you both win by expanding the market. Similarly, a custom contract for a big customer can get you over a growth gap, without diluting your brand in the market.

Dilution 404

Dilution Incubator Bootstrapping Government 404

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

Startup Professionals Musings

AUGUST 27, 2010

In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. There are other chasms out there just as deadly as the technology one, such as the ones below: Market requirements chasm. Marketing and sales chasm.

Startup 227

Startup Technical Review Dilution Early Stage 227

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. We also consider the market opportunity. Are they way ahead of the market?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

SEPTEMBER 28, 2014

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. We’re going to start aggressively spend money on marketing our product. (it is also the title of a fabulous book from Internet 1.0

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder. Volatile, uncapped.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

MARCH 14, 2020

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Both Sides of the Table

JUNE 5, 2011

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I can’t control the market. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

View from Seed

SEPTEMBER 14, 2021

Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? So, on one hand, the market see ms like a total frenzy these days. However, I am not sure that is the case with VC. of the Nasdaq.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

JULY 15, 2020

Some early stage businesses may even be able to get to CFBE fairly quickly. Mid-stage portfolios can be more acutely impacted if many companies have fat cost structures and were investing heavily in growth that is not materializing. Other companies are great businesses, but are effectively encountering a dilution event.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

The Equity Kicker

MARCH 17, 2015

In the 1990s when companies needed £2-5m to get a product to market they had money to hire a team of people to help them. Big picture this increased capital efficiency is great for entrepreneurs because they suffer less dilution, but it does mean they have to do things they aren’t skilled at.

Early Stage 60

Early Stage Venture Capital San Francisco Silicon Valley 60

View from Seed

SEPTEMBER 14, 2021

Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? So, on one hand, the market see ms like a total frenzy these days. However, I am not sure that is the case with VC. of the Nasdaq.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

The Next Web

SEPTEMBER 13, 2013

But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices. The region’s other strong VC presence resides in Japan, which has the typical Japanese model of a few large firms dominating the market.

Asia 132

Asia Silicon Valley India Term Sheet 132