Seeing Both Sides

AUGUST 28, 2017

Early stage entrepreneurs will also still likely value experienced advice on company-building from seasoned venture capitalists. In short, token sales allow early stage companies to skip the series B round and beyond. 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 short, token sales allow early stage companies to skip the series B round and beyond. But many are. Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. As far as customer acquisition is concerned, we discussed, again the power of organic search engine optimization. In 1M/1M, our preferred financing strategy is customers. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Berkonomics

MARCH 21, 2019

If there is no record of revenues, see the “The Berkus Method” available with any search query for valuing the business before revenues. And you should “know your numbers and be able to defend them” during early meetings with candidate investors. The more you ask for – the more equity you give up.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Both Sides of the Table

APRIL 27, 2014

Seed investors are aplenty and of course they need downstream money to fuel their early-stage bets. If we got an offer to raise $25 million to grow would she take it or be too worried about exit price, dilution, valuation expectations, etc. And we live in public so many people are able just to reach out. Probably more.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

View from Seed

APRIL 16, 2015

An easy way to think about it is that value over time doesn’t go up and to the right in a straight line like this: Instead, it’s more of a stair step like this: So, what are the value inflection points that create the stair steps, and how does one think about it at the earliest stages? These might include: Bring on a technical co-founder.

Seed Stage 120

Seed Stage Cofounder Early Stage Startup 120

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. So if faced with this situation, my only word of advice for entrepreneurs is that it is important to know that there is a fine line between dilution and delusion.

Dilution 60

Dilution Term Sheet Valuation Early Stage 60

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. This is because excessive capital becomes toxic for an early stage company. This situation is not always in the best interest of founders.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. This is because excessive capital becomes toxic for an early stage company. This situation is not always in the best interest of founders.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

rapidrollout.wordpress.com

JANUARY 15, 2011

And finally, you may be able to avoid diluting your equity. Avoid delay by using a consulting CTO on a short-term basis while you are searching for a permanent technology partner. Preserve your equity by using a consulting CTO to ramp up your company before securing early-stage financing and hiring a permanent technology partner.

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40

Tim Keane

JANUARY 12, 2010

  A cumulative dividend can get to be very expensive and is not often a feature in early stage terms.   A full ratchet anti-dilution clause is very unfriendly to entrepreneurs; it requires them to make up the entire difference in price from their own holdings.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

www.payne.org

SEPTEMBER 22, 2011

3 Dilution. The total preference is less of an issue in early stage companies (e.g. However, it can be a significant issue in later stage companies that have raised a lot of money. Those new shares are created out of thin air by the company, and will dilute all of the current stockholders. diluted) terms.

Equity 56

Equity Employee Vesting Preferred Stock 56

Agile VC

JULY 11, 2012

Here’s a slightly perverse scenario… Acme Ventures starts out as an early-stage VC investing in US-based IT companies. But usually what makes a VC partnership great in its early days doesn’t easily translate into other new strategies down the road. My partner @ LeeHower looks back: [link] 5 days ago Search.

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

www.startupnorth.ca

OCTOBER 23, 2010

But for every founder, there is an early employee that takes near equal risks in joining an early-stage company. Remember the goal is to incent early employees to have an emotional ownership of the product and company they are building. Darmesh Shah has a great list of insights for employees joining early stage companies.

Employee 41

Employee Founder Salary Equity 41

Occam's Razor

MAY 2, 2017

The very best analysts distill, rather than dilute. There are Search people and Content people and Landing Page Optimizers and Cart fixers and Attribution Specialists and more. Outcomes: Revenue | Ideas Funded Behavior: Path Length | Cart Abandonment Rate Acquisition: Assisted Conversions | Share of Search.

Metrics 141

Metrics Acquisition eCommerce Analytics 141

The Startup Lawyer

FEBRUARY 4, 2011

As equity in the company tends to be the currency of early stage startups, the startup should have a good foundation for assigning value in terms of equity. Most incubators take common stock and sit “side-by-side&# with the founders, but some may want some (weak) preferred stock and/or dilution protection.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. Dont worry about giving up too much equity at an early stage.

Equity 40

Equity Employee Dilution Valuation 40

Professor VC

JANUARY 17, 2008

It is several thousand dollars, which is a lot of cash for a struggling entrepreneur in search of seed funding. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. The best way to describe my work is probably start-up CFO guy.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. At the same time, early-stage companies are thinking beyond the high prices of Silicon Valley to put down roots and find financing and growth partners.

Texas 90

Texas San Antonio Houston Dallas 90

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. But the business principles are very different.

Cofounder 69

Cofounder Differentiation Search Advertising 69

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. But the business principles are very different.

Cofounder 69

Cofounder Differentiation Search Advertising 69

venturehacks.com

SEPTEMBER 22, 2011

When you evaluate a candidate, ask yourself whether she is likely to increase the next round’s share price (include the dilution of her market rate options). That’s true – someone who can help you fundraise in the next round can easily make up for the added or extra dilution from the current round. Part 2: Deck.

Equity 40

Equity Cap Table Valuation RSS 40

www.paulgraham.com

OCTOBER 23, 2010

Googles plan, for example, was simply to create a search site thatdidnt suck. They had three new ideas: index more of the Web, uselinks to rank search results, and have clean, simple web pages withunintrusive keyword-based ads. For example, dating sites currently suck far worse than search didbefore Google.

Startup 105

Startup Cofounder Software Stock 105

www.paulgraham.com

APRIL 28, 2010

Sometimes angels deal terms are as fearsome as VCs.Other angels, particularly in the earliest stages, will invest basedon a two-page agreement. Whatkind of anti-dilution protection do they want? Angels and even VC firms occasionally do this, but they alsoinvest at later stages. The problems are different in the early stages.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? How much equity do early employees typically get? link] 8/12/15.

Equity 40

Equity Employee Founder Cofounder 40

maplebutter.com

JANUARY 8, 2013

Search for: Videos. When it comes to early stage investing – it’s all gut. Does it make sense to spend this time speaking about your early stage start-up when your product has not even entered Alpha testing? Co-founders are the highest form of dilution to a business. Maple Butter. Just one piece of advice?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Professor VC

DECEMBER 8, 2015

one company running out of cash and another with cash but searching for a business model). Musk was the early winner taking the CEO role (for a brief period) in the merged company and the largest equity stake as well. Not surprisingly, the merger was highly dilutive, particularly to Confinity/PayPal shareholders.

Merger 28

Merger LP IPO Redemption 28

www.paulgraham.com

APRIL 28, 2010

Dilution is normal. They cant dilute you without diluting themselves justas much. And they wont dilute themselves unless they end up net ahead. So its your choicewhether you get diluted. [ Theres no real answer.There is no rational way to value an early stage startup. How much does an angel invest?

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Up and Running

JULY 14, 2015

Peter: Techstars is probably the most famous accelerator but the idea of the accelerator versus the incubator because there is living field, because there’s this very early stage fields for them both. The cool thing is with the device like, that with the science like that, there’s a lot of early stage proving ground needed.

Incubator 60

Incubator Email Startup Oregon 60

Ben's Blog

MAY 24, 2021

Among the findings are: SPAC dilution amounts to roughly 50% of the cash ultimately delivered to the companies brought public. The former are often institutional shareholders who can earn rates of return as high as 11% for “loaning” money to the SPAC in search of its target. Enhance access to private, secondary market transactions.

SEC 36

SEC Accredited Investor IPO Technical Review 36

Seeing Both Sides

JANUARY 13, 2015

Others prefer to come in at the later stages, post product-market fit, and not have to deal with the risk and roller coaster of the early stages. Gluttons for punishment, we prefer to start early, take the risk and stick around through the end. The first version of the go to market team is hired (i.e.,

Mezzanine 20

Mezzanine IPO Finance Business Model 20

Up and Running

DECEMBER 9, 2014

What should my startup be focusing on, marketing, searching for leads, or working on our strategy? The pro is that it’s cheap capital and it’s not diluted. My name is John Bates. I’m the CEO of Executive Speaking Success and I’m a long-time entrepreneur.

Small Business 95

Small Business Finance Forecast Metrics 95