article thumbnail

Down Rounds: Deal With Reality

Feld Thoughts

She has a good article today in TechCrunch titled Embrace the down round (it’s going to be okay, maybe). ” Now, I’m not encouraging anyone to do a down round if unnecessary., ” Now, I’m not encouraging anyone to do a down round if unnecessary., and a bunch of other things.

article thumbnail

Three Startup Financing Myths You Should Avoid

YoungUpstarts

If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. For some entrepreneurs, raising financing can seem like a full time job, particularly in these trying times. Unfortunately, much of this advice is wrong. Well not, wrong exactly.

Finance 167
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

A heartbreaking story about time and money.

Berkonomics

Many of the start-ups my various angel funds have financed died a slow death , not because of poor concept but because of poor execution, wasting fixed overhead and draining the financial resources from the company coffers. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result.

article thumbnail

Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. I suffered through the next financing after implementing a complex structure, or a sale of the company, or a liquidation. Then, if you end up doing a down round, it suddenly matters a lot.

article thumbnail

Cram Down – A Test of Character for VCs and Founders

Steve Blank

For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. A cram down is different than a down round. A down round is when a company raises money at valuation that is lower than the company’s valuation in its prior financing round.

Cram Down 404
article thumbnail

How do the sample Series Seed financing documents differ from typical Series A financing documents?

Startup Company Lawyer

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70
article thumbnail

Why Raising Too Much Money Can Harm Your Startup

Both Sides of the Table

And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. These types of firms may see your follow-on financing as a chance to “buy up ownership.” Most firms are somewhere in the middle.