View from Seed

APRIL 30, 2015

Especially in the early stages, so much about the company may change in how they think about product or go-to-market — and change multiple times — before raising an institutional round. It’s not often a seed-stage company — usually it’s later — but the trends are going earlier and larger.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

The Equity Kicker

MARCH 17, 2015

Forgive me for that, but I do think we are in the vanguard of a trend towards ever more active investing. This is, in fact, a trend that has been underway for some time. Most of the best funds are embracing this trend and hiring dedicated teams so they can add more value. The opportunity for investors is to help fill the gaps.

Early Stage 60

Early Stage Venture Capital San Francisco Silicon Valley 60

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

YoungUpstarts

MAY 31, 2016

While it’s fair to say that the aforementioned cornerstones apply to more established companies and are intended to ensure for their continued well-being, early stage entrants can benefit from their guidance as well. Hire smart, ambitious, get-it-done employees and lead them with emotionally intelligent innovation leadership skills.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

View from Seed

SEPTEMBER 14, 2021

For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Early-stage valuations are up 70%, and late-stage valuations are up 103% (source Pitchbook ). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

SEPTEMBER 14, 2021

For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Early-stage valuations are up 70%, and late-stage valuations are up 103% (source Pitchbook ). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

JANUARY 9, 2014

I recently developed a more human framework for early-stage startups to define their startup DNA and lay some foundations for a sustainable business. By trying to appeal to everyone and adding features left, right and centre, you will actually dilute your message and could end up with a complex, bloated product.

Early Stage 102

Early Stage Startup Cofounder Design 102

Haystack

JULY 8, 2018

So, that’s why I’m writing this short post specifically for 1) employees of early-stage startups and 2) the earliest investors in these startups, who are often themselves new to the entire sector. This trend has created new challenges but also some new opportunities.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Startup Professionals Musings

DECEMBER 27, 2014

What characterizes them is the number of companies they invest in, as well as the size of their investments (less than $250,000), and the seed or startup stage where they specialize. This can cause early investor dilution, lower ultimate returns or leave the startup stranded.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

View from Seed

SEPTEMBER 14, 2021

For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. Early-stage valuations are up 70%, and late-stage valuations are up 103% (source Pitchbook ). Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Both Sides of the Table

AUGUST 30, 2010

I have to say that I didn’t take the question to mean that convertible debt had won for the entire market, but either way it’s clear that convertible debt has become an increasing trend. Clearly this is is a trend and a topic that is interesting entrepreneurs. Why many early-stage investors DO price rounds (e.g.

Equity 319

Equity Early Stage Angel Investor Valuation 319

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. I told my friend that I felt that in 2014 too many new VCs feel the pressure to chase deals, to be a part of syndicates with other brand names and to pounce on top of every startup whose numbers are trending up quickly.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

View from Seed

JANUARY 26, 2016

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. I used 2007 as the marker to delineate this, but the trend probably started a bit sooner.).

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

The Next Web

OCTOBER 3, 2012

Here’s the problem: this opportunity doesn’t exist for early-stage startups, because, by definition, they have no users or customers. Worrying about “scale” in the early days of your startup is simply a bad investment. Adding a tenth team member reduces everyone’s stake to 10%.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. To prepare, please study the Thought Leaders in Cloud Computing trends and opportunities series. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though).

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. It is also a factor that early stage investors don’t want a controlling interest in your company. Projections for your future. The more you ask for – the more equity you give up.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Rob Go

MAY 2, 2016

Part of this is the emergence of “pre-seed” as a category, but I’ve also seen traditional institutional seed investors trending towards smaller initial rounds as well. And I think this is a really good trend for a few reasons. Dilution is the big question here. One reason is that smaller seeds lead to more speed before PMF.

Seed Stage 28

Seed Stage Dilution Valuation Seed Capital 28

VC Adventure

AUGUST 30, 2010

It’s an interesting data point on Y-Combinator companies, but is this truly a macro trend? The most common forms of investment in early stage business are convertible debt and preferred equity. The trend that Paul is pointing out appears to be taking place, but is less than definitive (and much less so than I expected).

Angel Investor 103

Angel Investor Early Stage Equity Valuation 103

Ben's Blog

MAY 24, 2021

There are a number of trends concerning IPOs and capital formation to note: First, the raw number of IPOs has declined significantly: From 1980-2000, the US averaged roughly 300 IPOs per year; from 2001-2016, the average fell to 108 per year. A number of implications flow from these trends: First is jobs.

SEC 36

SEC Accredited Investor IPO Technical Review 36

Gust

OCTOBER 12, 2011

I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Austin Startup

SEPTEMBER 10, 2017

SAFEs and Notes are optimized for speed and simplicity, with a cost of future uncertainty and dilution. Convertible notes/SAFEs are usually executed around times of maximal uncertainty for a company; the very early stages. The PR story behind that trend — the way it gets sold — is that it’s about saving companies money.

Valuation 48

Valuation Dilution Silicon Valley Seed Stage 48

Up and Running

APRIL 24, 2018

Every business needs to adapt to emerging market trends, and your health startup is no exception to this rule. That’s why having a revenue-minded focus from the early stages helps to secure funding. Here are seven factors that you must take into account to build a successful health startup and keep it afloat forever.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

Hunter Walker

NOVEMBER 17, 2014

There’s LOTS of growth still needed to make it sustainable, but if the trends of the last three years are indicative of the future, we’re in a good spot. HW: Is it getting more competitive for early stage VCs like yourself? Then they prove themselves and we get diluted. It’s a small scene. Everyone knows everyone.

Detroit 91

Detroit Michigan Brazil Seed Stage 91

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

Startup Company Lawyer

JANUARY 9, 2011

Convertible debt with a price cap seems to be the preferred structure for early-stage financings. Over the last 12 months, I’ve noticed a trend where early-stage startup companies raise seed financings of between $250K and $1M using a convertible note with a price cap.

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

Rob Go

NOVEMBER 30, 2012

I was surprised to find that it has been more than two years since my post summarizing the state of the seed stage market, and trying to bring a balanced view on the rise of Super Angels and Micro-VC’s. The venture capital market continues to be in transition, and a lot of changes have occurred in the early stages of the market.

Seed Stage 55

Seed Stage Pre-Money Valuation Dilution Early Stage 55

Professor VC

JANUARY 17, 2008

The theme of the event was angel investment trends for 2008. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. My facebook can beat up your facebook. 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

www.paulgraham.com

OCTOBER 23, 2010

They get the same kind of stock and get diluted the same amount in futurerounds. So the deals take longer, dilute you more, and imposemore onerous conditions. Im happy to see Google is bucking that trend. There is nothing more valuable,in the early stages of a startup, than smart users.

Startup 105

Startup Cofounder Software Stock 105

Up and Running

DECEMBER 9, 2014

The first is really about understanding leading indicators and I want to give some examples of that and basically trends and data that can help you better forecast your business. The pro is that it’s cheap capital and it’s not diluted. My name is John Bates.

Small Business 95

Small Business Finance Forecast Metrics 95