Dilution Early Stage Pre-Money Valuation Syndication 
Professor VC
JANUARY 17, 2008
One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups. 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.
Both Sides of the Table
FEBRUARY 25, 2010
We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. million at a $15 million pre-money valuation. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. Yes, this was stupid.
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www.paulgraham.com
APRIL 28, 2010
Startups valuations aresupposed to rise over time. So if youre going to sell cheap stockto eminent angels, do it early, when its natural for the companyto have a low valuation. Some angel investors join together in syndicates. Whatkind of anti-dilution protection do they want? In the Bay Area its the Bandof Angels.
Feld Thoughts
JULY 14, 2015
A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario.
www.paulgraham.com
APRIL 28, 2010
Mechanics Angel investors often syndicate deals, which means they join togetherto invest on the same terms. In a syndicate there is usually a"lead" investor who negotiates the terms with the startup. Dont feel like you have to join a syndicate, though. The valuation determines how much stock you get. Dilution is normal.
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