ReadWriteStart

JUNE 1, 2020

Instead of funding, you pay the investors a structured royalty, which is a portion of the sales. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Raising higher capital at an early stage means more equity to be diluted to the investors. Royalty based investment.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

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

Both Sides of the Table

SEPTEMBER 10, 2021

I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. On the one hand, you’re over paying for every investment and valuations aren’t rational.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

AUGUST 14, 2017

The administrative work we actually do at board meetings? Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Berkonomics

AUGUST 10, 2023

From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering. There is no middle ground. Resetting your priorities Taking money from these sources involves resetting priorities over time.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

Both Sides of the Table

SEPTEMBER 29, 2009

They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. Should VC’s really be impacted by public market valuations when the money that they’re investing today should be for returns in 7-10 years? Short answer – yes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

OCTOBER 11, 2009

But if you approach them with a very fair valuation and ask for a small check (say $10k, which should be nothing to someone in this position) I believe you’ll have a reasonable shot at it provided that you actually have an interesting company. At a $2 million valuation this is 0.5% of the company – about right.

Advisory Board 306

Advisory Board Startup Equity Valuation 306

Berkonomics

FEBRUARY 23, 2023

So, the question: load up with more equity and dilution? For young companies, often the question is whether to suffer a new round of dilution to stimulate growth, or to sell earlier and not share the (presumably) increased proceeds with additional investors. Or sell now?

Dilution 62

Dilution Valuation Early Stage Equity 62

Hunter Walker

AUGUST 8, 2023

At the time, this is last quarter and the stock market has trended upwards nicely since then (a potential leading indicator of private tech valuations), we all agreed venture portfolios were probably still 25-40% overvalued. Valuations. As The Information proclaims, “ Unicorn Fire Sales Ahead.”

Portfolio 98

Portfolio Cap Table LP Valuation 98

Both Sides of the Table

FEBRUARY 17, 2011

A year ago I blogged about one of my most common mantras that applies to sales, biz dev & fund raising alike: “ Time is the Enemy of all Deals.&#. When times are really good for fund raising many teams delay to maximize their valuation. How much dilution am I going to have to take now? 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

NOVEMBER 14, 2017

It wasn’t just front-end processes like sales tools, marketing funnels, dynamic pricing, driver routes and so forth but we also had to build comprehensive systems to manage numerous warehouses across four different cities. Summary Startups are fun and exhilarating and filled with challenging problems to solve.

Operations 286

Operations New York City Technical Review Startup 286

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. NVV: Is there any dilution? NVV: Let’s talk about the seed stage specifically.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

APRIL 14, 2012

Did raising money at a $500 million valuation help secure the $1 billion deal? “it’s smart to use an impending investment valuation to drive a higher acquisition valuation” I would like to amend her statement slightly to read, “it’s smart to use an impending investment valuation to drive an higher acquisition.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

www.avc.com

SEPTEMBER 22, 2011

This is NOT your 409a valuation (we call that "fair value"). This "best value" can be the valuation on the last round of financing. The other important data point is the number of fully diluted shares. The first thing you do is you figure out how valuable your company is (we call this "best value").

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Both Sides of the Table

JULY 25, 2010

Because I built two SaaS companies and sold my second one to Salesforce.com (where I then took on the role of VP Products) I am often asked to look at SaaS and/or sales-oriented deals for others. I’d far rather dilute 10% early and get some investor traction than to wither for another 3-6 months trying to get my seed round together.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Berkonomics

OCTOBER 18, 2018

For investors, a subsequent down round at a lower valuation than the last, or an exit opportunity at a loss are all opportunities for the affected stakeholder to show a side that can sometimes shock an entrepreneur or CEO. I have seen investors allow a company to die, rather than suffer the massive dilution of an offer by a new investor.

Valuation 96

Valuation Dilution Down Round Employee 96

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. That said, Jonathan Bragdon, General Partner, Capacity Capital , points out that Flexible VC terms “twin” well with equity: providing less dilution while still providing investor assistance. . Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Company Lawyer

MARCH 14, 2010

If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection. Deleting anti-dilution rights saves several pages of text in the Certificate of Incorporation. Co-sale rights. under $500K). Future rights.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Startup Professionals Musings

MARCH 23, 2014

Stock dilution control. Everyone wants to minimize dilution of shares, so this special clause is common. Valuation has very little meaning until an outsider invests. These have less to do with the type of stock and more to do with who the person is and how strategic they are to the organization.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Startup Professionals Musings

SEPTEMBER 26, 2015

Perhaps they're way off in their valuation (usually far too high), or paralyzed by fear at seeing the other terms, because they have no idea what's normal, and what's worth a fight to the death (their startup's). In very early startups, which have no valuation, the term sheet may specify a convertible note.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120

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

Lightspeed Venture Partners

SEPTEMBER 21, 2013

to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. pre money valuation and planned to use the money to market the app. pre money valuation). pre money valuation. pre money valuation and a $2.7M The smartphone app that enables this is free but it costs $2.49

Pre-Money Valuation 161

Pre-Money Valuation Valuation Dilution Distribution 161

Startup Professionals Musings

JANUARY 22, 2013

Stock dilution control. Everyone wants to minimize dilution of shares, so this special clause is common. Valuation has very little meaning until an outsider invests. These have less to do with the type of stock and more to do with who the person is and how strategic they are to the organization.

Vesting 245

Vesting Common Stock Stock Founder Vesting 245

Berkonomics

JUNE 15, 2017

From the moment such an investor looks seriously at your company, the investor or VC partner is thinking of the end game, the ultimate sale of the company or even of an eventual initial public offering. Taking in angel or venture money requires a setting of an entrepreneur’s expectations that may come as a shock at least at first.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Haystack

JULY 8, 2018

While folks will feel sympathy for line employees at startups who don’t make any gains in a sale, no one will feel sorry for early-stage investors who get washed out. valuation, that’s sort of like a new IPO, but without the lockup period.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. Why not go further, develop more valuation, customer experience, and really, deeply validate the business? Kristen is doing about $70,000 year-to-date, and expects to hit $200,000 for the 2010 fiscal year based on her holiday sales projections.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

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

The Startup Toolkit

NOVEMBER 4, 2011

Roughly 33% dilution for full round ($2mm pre-money). 40% dilution for full round (roughly $2mm pre-money). Vision for B2B, sales-driven technology. The financials immediately jump out when we talk about term sheets: what’s the valuation? What’s the dilution? Deal 1 is a sales-driven company.

Term Sheet 31

Term Sheet Dilution Participating Preferred B2C 31

Gust

MARCH 16, 2014

Stock dilution control. Everyone wants to minimize dilution of shares, so this special clause is common. Valuation has very little meaning until an outsider invests. These have less to do with the type of stock and more to do with who the person is and how strategic they are to the organization.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

Lightspeed Venture Partners

NOVEMBER 19, 2012

They talked about a referral program, as well as direct sales. The company did $250,000 in sales last year and is profitable. Barbara thought that the company should be further along for $240,000 already invested, and didn’t like that the founder only owned 43% and would be diluted by a further 10% in this round, so she passed.

Pre-Money Valuation 160

Pre-Money Valuation Alabama Valuation Churn Rate 160

www.inc.com

SEPTEMBER 24, 2011

Sales & Marketing | Wednesdays. SALES & MARKETING. Besides the future potential earnings youre forgoing, youre also diluting your own ownership in the company. As you think about how much equity to offer, have a reasonable valuation in mind thats been determined using professional advice. Finance | Tuesdays. Newsletters.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

This is going to be BIG.

MARCH 16, 2020

Part of it was that we had gotten over our skis on valuation, making further investment unattractive to both new and existing investors. Some key existings who didn’t want to see their prior money get lost wouldn’t budge on a dilutive financing, despite the fact that they knew where we were headed.

Bankruptcy 95

Bankruptcy Private Equity Seed Stage Dilution 95

Both Sides of the Table

SEPTEMBER 5, 2012

What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. In a standard VC term sheet there is a standard term called an “anti dilution provision” and they are in nearly 100% of deals. ” Full R at-shits.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Berkonomics

DECEMBER 20, 2018

These are your candidates, because they are companies already absorbing much or all the marketing expense necessary to make sales of your invention. That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business. So, there you have it.

IP 54

IP Intellectual Property Investment Bankers Product 54

Berkonomics

FEBRUARY 9, 2017

[Email readers, continue here…] For young companies, often the question is whether to suffer a new round of dilution to stimulate growth, or to sell earlier and not share the (presumably) increased proceeds with additional investors.

Dilution 48

Dilution Valuation Early Stage Naming 48

The Startup Toolkit

NOVEMBER 4, 2011

Roughly 33% dilution for full round ($2mm pre-money). 40% dilution for full round (roughly $2mm pre-money). Vision for B2B, sales-driven technology. The financials immediately jump out when we talk about term sheets: what’s the valuation? What’s the dilution? Deal 1 is a sales-driven company.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20