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

Feld Thoughts

” Many companies have hired ahead of their growth rate because they had the cash to do so. I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. Then, if you end up doing a down round, it suddenly matters a lot.

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Why Raising Too Much Money Can Harm Your Startup

Both Sides of the Table

It is a truism that with more capital you will hire people more quickly and spend more liberally whether it’s on external contractors, PR firms, attending events, doing legal work (trademarks, patents) or whatever. It forces harder decisions about whom you’ll hire and whom you’ll delay. million or $4 million.

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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

New investors hate down rounds. Huge structural under-employment in much of the country and full employment in some niche tech markets where it’s impossible to hire developers, designers or sales professionals. So I’m not advocating panic or a need to rush your funding round. Get funded now, if you can.&#.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

So in 2011 as a startup company if you can generate lots of demand you can definitely raise an A round of capital (say $3 million) at a $7 or 8 million pre-money valuation or slightly higher whereas just two years ago you would have struggled. That’s the deal you get when you’re raising in a good market for startup financing.

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How to Find the Perfect Startup Job: Part III "Selecting the Right Venture"

Genuine VC

Start-ups hire ahead of growth (or at least predicted growth), which translate into a viable company, a healthy work environment, and future internal opportunities. Has there ever been a down round, inside round, a flat round, or a CEO change? What is the burn rate and how much cash is in the bank now?

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On the Road to Recap:

abovethecrowd.com

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat.

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Premature scaling at Series B

The Equity Kicker

To meet growth and revenue targets, you hire and spend like never before. You rush a few key hires, overbuild the team, ramp marketing spend. Investors who paid up for your financing are not happy. hiring B players to fill the roster and generally doing everything they avoided when they were running lean and smart.