View from Seed

FEBRUARY 19, 2015

I called the recruiter running the search and told him I was going to step down and hire a CEO. Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. So, in order to hire a CEO, we have to give someone their first shot at the job.”

Founder 120

Founder Startup Cofounder Business Model 120

The Equity Kicker

JANUARY 22, 2014

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. You fall into the spiral of death: head of sales gets replaced (at least once), CEO gets replaced (at least once), a down-round financing happens (if lucky).

Venture Capital 102

Venture Capital Down Round Valuation Lean 102

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Reid Hoffman

JUNE 8, 2021

And I hired a COO, Belinda Johnson , and she said, “No, if people don’t like you, you should meet with them.” But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. That was totally counterintuitive.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Growthink Blog

MAY 23, 2011

This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years. With this capital, the company propels itself to $50 million+ in revenues, and to either a sale to a strategic acquirer or to an initial public offering.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. For example, a seed firmshould be able to give advice about how to approach VCs, which VCsobviously dont need to do; whereas VCs should be able to giveadvice about how to hire an "executive team," which is not an issuein the seed stage. So theyre going to raise $200,000.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Reid Hoffman

JUNE 8, 2021

And I hired a COO, Belinda Johnson , and she said, “No, if people don’t like you, you should meet with them.” But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. That was totally counterintuitive.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Scalable Startup

OCTOBER 26, 2011

The second round is often for some or all of the following – corporate growth, go to market, turn the prototype into a robust offering, marketing costs, or to hire a sales force. It’s no longer based on a hunch, unless the company is in trouble and needs money to finish what the first round started.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

This is going to be BIG.

SEPTEMBER 7, 2012

In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive. That wasn't a bubble bursting issue--that was a poor financing strategy issue of people getting caught with their pants down, hands in the cookie jar, and all the metaphors you can think of at once.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99