Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. For a primer, I would recommend refreshing yourself here. Ok, let’s jump in.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. For a primer, I would recommend refreshing yourself here. Ok, let’s jump in.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Genuine VC

JULY 19, 2010

With that choice, they’re maximizing their full Series A options, potentially reducing ultimate founder dilution, and retaining flexibility for strategic options (including exit) along the path – all while raising money with a more efficient diligence and decision-making process.

Seed Stage 175

Seed Stage Technical Review Dilution Offshore 175

Both Sides of the Table

NOVEMBER 14, 2017

Raise too soon and likely take on more dilution, wait and get valuation up (as our metrics continue to rise) but then run to a point where you have a lower cash balance and place more risks on the business. Summary Startups are fun and exhilarating and filled with challenging problems to solve.

Operations 286

Operations New York City Technical Review Startup 286

David Teten

JANUARY 19, 2021

This structure allows for alignment on the front end, and real-time flexibility for performance metrics,” says Samira Salman , a family office investor and advisor. . Flexible VCs have created structures based on other company performance metrics than revenues, such as profits or founder salaries. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

SEPTEMBER 18, 2014

There were no metrics. Him: On metrics. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. People seem concerned about valuation. Me: More dilution?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Up and Running

JULY 14, 2015

Any investor will put their valuation on your business based on a number of factors, including looking at important metrics for your business, patents, or assets. But raising too much money will cause the valuation to increase. Let’s say the valuation an investor puts on your business is $2 million.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. For a primer, I would recommend refreshing yourself here. Ok, let’s jump in.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. Valuations are based more on typical later-stage type of metrics. Finally, don’t over-optimize on valuation. Third, investors are generally much more conservative in Asia.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

SEPTEMBER 28, 2013

Good press and industry mojo wasn’t enough to overcome the financial metrics of the business and the offers came in at more like $10 million. Dilution / valuation. I hate when companies publish too much information about the total stock option allocations, the company valuations, the dilution faced in every round, etc.

Startup 417

Startup Dilution San Diego Stock Options 417

Both Sides of the Table

JULY 16, 2013

Because at least while the VC spigot is open and flowing for high-potential individuals that fit a pattern that some VCs seem to favor they can access cheap capital that isn’t terribly dilutive and can use the to fund development and swing for the fences with limited focus on monetization. And the dilution that goes with it.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Gust

SEPTEMBER 17, 2014

There were no metrics. Him: On metrics. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. People seem concerned about valuation. Me: More dilution?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

The Next Web

FEBRUARY 27, 2014

One of the questions I get, more often than not, is what is the appropriate valuation of my business. multiple interested investors competing for the deal, and driving up your valuation in the process). Never have an investor think they are the only investor pursuing your business, as that will hurt your valuation.

Valuation 167

Valuation Forecast Seed Stage .Net 167

David Teten

NOVEMBER 10, 2011

The model outputs standard financial statements and key operating metrics based on a wide range of user inputs, and is highly customizable and entirely transparent. We included a Discounted Cash Flow Valuation tab for the sake of completeness, but it’s irrelevant for most startups. Download the template financial model in Excel here.

Balance Sheet 154

Balance Sheet Startup Equity Valuation 154

Both Sides of the Table

JULY 17, 2018

" Revenue doesn't pay your bills, GM does  —  @msuster 2/ Founders obsess with revenue as a vanity metric. But if you want to add some in the comments section on Medium and I’ll make sure to read them. Some even grow "bad" revenue just to show growth.

Founder 242

Founder Dilution Software Review Later Stage 242

Board Effect

MAY 13, 2019

At this stage, startups should be taking the time to develop a cap table structure that supports growth; plugging in the formulas to eventually model valuations and equity dilution during seed-stage negotiations. This gives investors a clearer picture of the degree to which their equity may be diluted should the startup meet its goals.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Scott Edward Walker

NOVEMBER 21, 2013

at 2:33) “With any product, it’s ‘do the users like it?’” (at 3:48) “You never argue with the metrics.” (at at 14:36) “Valuation and dilution are secondary to [bringing] in a top-tier investor who adds value to the space that you’re in… That’s worth millions and millions to your valuation.” (at

Angel Investor 65

Angel Investor Dilution Valuation Metrics 65

Ben's Blog

AUGUST 17, 2020

When speaking with founders and private growth investors, we hear countless references to “multiples paid” on current or near-term revenue; both obsess over this because a higher multiple translates to a higher valuation. How valuation multiples work Why did multiples become a shortcut-heuristic for estimating valuations in the first place?

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

The Next Web

SEPTEMBER 29, 2013

You’re learning what the metrics that matter are, what your funnel looks like, and what actions you want your prospects to take. Clearly investors should promote the idea that startups need to have clear metrics for terminating the discovery mode. You need to nail your metrics to graduate discovery mode. What does that mean?

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

K9 Ventures

OCTOBER 10, 2017

If the Micro-VCs are looking for Series A-like metrics, what does a company do when it’s just getting started? In order for a company to attract a full Seed round ($2M – $3M), that company needs to show an almost completed product, an advanced prototype, or some kind of traction/demand metrics.

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

View from Seed

JUNE 30, 2015

For all of these, the metrics and growth need to be the result of legitimate PMF and execution, not tricks. (If think about terms (you may get more dilution later, but you don’t want to create valuation overhang either), and think about your pace of capital deployment (slow until you have strong PMF).

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

ithacaVC

APRIL 5, 2011

It should also provide a combined summary so that it is easy to see who owns what % of the company on a fully diluted and converted basis. Additionally, at the seed stage, investors and the company might want to issue the investors convertible debt to avoid the question of valuation. There are no exceptions to this rule.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

Rob Go

FEBRUARY 29, 2016

There is always a market for strong companies, but you just may take more dilution than you otherwise would if you raise capital, or you may raise less for the same dilution. Did you raise way too much money at too high of a valuation with downside protection for your most recent investors?

Marketing 28

Marketing Dilution Burn Rate Seed Stage 28

This is going to be BIG.

JUNE 2, 2010

That’s going to be very problematic for anyone expecting an up round—or even a flat valuation. On top of that, when you set out to raise a certain size round, and the round grows on you, you usually wind up taking a lot more dilution than you intended. Drive one key metric. Once you have that, keep your focus simple.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

BeyondVC

JUNE 11, 2007

It is quite simple – the dollars are relatively cheap compared to an equity financing and extending your runway to hit more critical milestones means a potentially better valuation for your company down the road. Of course the more flexibility you have with respect to uses of cash means that pricing will go up.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

betashop.com

OCTOBER 8, 2012

Never, ever, choose your investors based on valuation. A couple of dilution points here or there wont matter in the long run but working with the right people will.? Alignment of business objectives and personal relationships means tons more than valuation. Don’t skimp on fundraising because of dilution fears.?.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Board Effect

MAY 10, 2019

Cap tables list a company’s authorized and outstanding shares, the parties to which those shares have been assigned, and the various metrics relevant to managing them. Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

NZ Entrepreneur

JULY 8, 2019

Valuations. If a valuation is too low, the founders become over-diluted over time and will struggle to do a later series A or B raise if they’re sitting at single digits – global venture capitalists (VCs) won’t touch this scenario. This often carries the double whammy of dilution.

New Zealand 42

New Zealand Entrepreneur Valuation Dilution 42

betashop.com

OCTOBER 8, 2012

Don’t choose your investors based on valuation. A couple of dilution points here or there wont matter in the long run but working with the right people will. Don’t skimp on fundraising because of dilution fears. 10M post-money valuation = $100M target. It ruins you and wastes your time. This is tricky.

Post-Money Valuation 92

Post-Money Valuation Valuation Dilution Advisory Board 92

Up and Running

DECEMBER 9, 2014

Maybe you are wondering which metrics to track, or whether or not you should take out a loan for your business. Which metrics do you most rely on to understand your business itself. The question is what metrics do you most rely on to understand your business’s health? What specific metrics should they be monitoring?

Small Business 95

Small Business Finance Forecast Metrics 95

Seeing Both Sides

JANUARY 13, 2015

Always testing and trying to run fast tests to put up some strong metrics before running out of money (did I mention we''re running out of money?). The founders are getting restless because they have been diluted, have less responsibility and realize that the company isn''t going to reach $1 billion in 3 years. 10-50 million.

Mezzanine 20

Mezzanine IPO Finance Business Model 20