Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Him: We didn’t want to price our round.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

www.mattbartus.com

DECEMBER 9, 2012

Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. You have a 20% option pool, so you know this will take your ownership down from 80% to 60%, and the VC will get 25%. Why else might this be useful? Matt Bartus.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

abovethecrowd.com

APRIL 20, 2016

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. The Sharks Arrive With Dirty Term Sheets.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Rob Go

JUNE 1, 2016

There is a lot of competition, so the fund ends up investing $5M into the A round at a pretty high price. A fancy firm puts down a term sheet to invest $40M in the new company. The company gets a term sheet for another $50M. No worries – insiders do a $20M round to get the company another year.

Term Sheet 28

Term Sheet Portfolio Valuation Warrant 28

NZ Entrepreneur

JULY 30, 2020

One common challenge arises when founders are presenting their opportunity to multiple investors or are considering alternative financing strategies. Many term sheets have confidentiality clauses, so be cognizant of what you are disclosing to other potential investors about the specifics of your negotiations.

Term Sheet 67

Term Sheet Due Diligence Valuation Down Round 67

Both Sides of the Table

FEBRUARY 14, 2016

When I was an entrepreneur there was no public information about how term sheets worked or how investors thought. But if you’re a seed investor and you’re worried that the A-round won’t get done if your post-money is too high you suddenly start paying less. Why Financing in Falling Markets is So Damn Difficult.

Valuation 150

Valuation Down Round Startup Later Stage 150

Both Sides of the Table

MARCH 30, 2016

Six firms had expressed strong interest, two had strong champions already trying to test price and round size and one had made it clear they were planning to submit a term sheet the following week. Great companies get financed. But of course public markets had begun gyrating.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Bryce Dot VC

APRIL 21, 2016

“Why the Unicorn financing market just became dangerous…for all involved.” Perhaps the answer to the Unicorn dilemma isn’t to take the down round or the dirty term sheet. That was the title of the bombshell dropped on silicon valley last night.

Silicon Valley 40

Silicon Valley Dilution Term Sheet Down Round 40