View from Seed

JUNE 30, 2015

The cliff notes behind the idea is that what used to be considered a series A is now actually a seed round because… Capital efficiency allows founders to get further with less. Very experienced founders and founders working on really audacious companies can get funded earlier. Institutional seed rounds are getting bigger.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

View from Seed

JANUARY 26, 2016

Just yesterday, for instance, we saw a company raising a seed round that has no product and two founders … and we also saw a company raising a seed with hundreds of thousands of dollars of monthly revenue. technical co-founder). Many seed investors (as well as Series A investors) will back a founder at a very, very raw stage.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

View from Seed

JANUARY 28, 2016

As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases. This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution.

Cofounder 120

Cofounder Finance Founder Syndicate 120

Rob Go

SEPTEMBER 2, 2014

Some founders are able to skip an institutional seed round and go straight to a multi-million dollar A-round where a larger VC puts in the lion’s share of the capital. As I’ve blogged about in the past, there are positives and negatives to this strategy, but it is a viable option to some founders. Skipping Straight to A.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

Hunter Walker

JANUARY 20, 2015

Despite being the smallest line on a founder’s cap table, we were often one of the first calls they made when confronted with a problem to solve or opportunity to consider. If you just need the money, stick unknown angels in an AngelList Syndicate so they have more limited information rights. That’s a good thing.).

Cap Table 48

Cap Table Warrant Syndicate Syndication 48

Rob Go

AUGUST 26, 2013

No team aside from founders. Several employees in addition to founders. As a result, many seed funds have pulled back, started making later stage investments, and even focusing more on mini-Series A’s with a syndicate of seed funds. Pre-product. Mostly angels with occassional participation from small/seed funds.

Valuation 68

Valuation Seed Stage Syndicate Syndication 68

Austin Startup

MARCH 7, 2021

It seems like every day there is a new headline about an exceptional startup founder, investor, or corporate headquarters moving to Texas. 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. Joe Lonsdale. Drew Houston.

Texas 90

Texas San Antonio Houston Dallas 90

Professor VC

JULY 25, 2013

I''m a strong believer in fairness (although my daughters may not agree) and investors and entrepreneurs working together as a team to create something valuable to all stakeholders (customers, employees, founders, investors). AngelList (which I remain a big fan) also recently launched a syndicate program.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Both Sides of the Table

APRIL 3, 2010

They said that they didn’t want the extra money or dilution. You were a VP at a company that sold for $200 million making the founder very wealthy. That founder wasn’t one of your angels. 2 of the 3 were at the founders’ request. We offered them more : $750k-1 million. We took the $500k. is now a VC.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

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. There needs to be enough equity to go around for founders, early investors, later investors, and employees. Now the investors have 65% (35% for first round and 30% for second round), while founders have 35%.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Agile VC

JULY 11, 2012

Should there be a notion of “founder equity” for those individuals who put in the hard work to start a firm and build the brand? Like any other form of diluting your focus… it occasionally works, but usually doesn’t. Paul Ferri @ Matrix) though the vast majority had multiple co-founders. link] leehower.

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

Rob Go

JANUARY 17, 2017

In the last three investments I’ve made, there has either been a lifecycle VC involved or one was interested but didn’t end up being part of the syndicate. Tagging a deal is entirely in an investor’s best interests, but not really in the founders’ interest.

Due Diligence 28

Due Diligence Seed Stage Syndicate Syndication 28

Rob Go

JANUARY 28, 2016

As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases. This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution.

Cofounder 28

Cofounder Finance Founder Syndicate 28

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. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. We ended up agreeing a term sheet for $16.5 million at a $15 million pre-money valuation.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

www.paulgraham.com

APRIL 28, 2010

I think it would help founders to understand funding better—notjust the mechanics of it, but what investors are thinking. And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Some angel investors join together in syndicates.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hunter Walker

SEPTEMBER 5, 2021

I really liked Jason Lemkin’s “ Do You Have a Weak Investor Syndicate ” blog post from earlier in the summer. Instead I want to focus on Jason’s discussion of bridges and pro rata, because it’s an area which is dynamic in every deal and often misunderstood by founders. Go read it and then come back here…. Long term greedy!!!!

Cap Table 95

Cap Table Seed Stage Syndicate Syndication 95

Professor VC

JUNE 20, 2011

Since the iControl system chronicles all meetings, I was able to find the automatic picture snapped from my first meeting with the founders, Reza Raji and Chris Stevens on April 22, 2004. Now that iControl has raised over $100M, this got me thinking back to our original business plan. So what does this all mean.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

Rob Go

MAY 20, 2014

I find that it’s also pretty typical for an existing VC investor to be willing to syndicate the deal with another outside investor. In that case however, the founders might end up taking a lot of dilution. Today, it’s become a tool that is used earlier to better align incentives between founders and investors.

Valuation 76

Valuation Dilution Post-Money Valuation Syndicate 76

Feld Thoughts

JULY 14, 2015

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. The new money comes in at a pre-money valuation of $100, but includes a complete refresh of founder equity to 40% of the company. Here’s the scenario.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

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. Dilution is normal. So its your choicewhether you get diluted. [

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Austin Startup

AUGUST 1, 2017

This is most clearly highlighted in the “unicorn” boom we all saw over the past few years, where founders raised very large rounds, with terms very onerous to the underlying common stock, hoping they could eventually justify billion dollar valuations to skeptical acquirers or public market investors.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48