Both Sides of the Table

SEPTEMBER 18, 2014

On the phone … Me: So, you raised venture capital? We raised a seed round. You’ll find out the minimum when the next round is raised. Him: But when I raised my first round we didn’t know how to price the company. There were no metrics. How will you price the next round? Objectively.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

David Teten

AUGUST 7, 2019

Likely signs of a Value investment: the company has challenges in filling out the round; the investors have more negotiating leverage than the founders during the closing process; the company has significantly better metrics (e.g. The reverse also holds: a Value investment can become Momentum, and then follow with a down round.

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Both Sides of the Table

JUNE 5, 2011

Another firm we saw tried to raise $15 million at a $60 million pre-money with similar metrics. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later. But he sold within 3 years for not a huge price after having raised more than $20 million. Here’s the problem.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Growthink Blog

MAY 23, 2011

With this seed capital – more often than not totaling between $100,000 and $1,000,000 - the company accomplishes a number of key technical milestones, gets a beta customer or two, and then goes on a "road show" to venture capitalists around the country for capital to “scale” the business. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? We raised a seed round. You’ll find out the minimum when the next round is raised. Him: But when I raised my first round we didn’t know how to price the company. There were no metrics. How will you price the next round? Your A round? Him: On metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

SEPTEMBER 27, 2010

There are real changes in the venture capital industry and it would have been fun to talk about them. If you do a $1 million angel round at $6 million pre-money and hope to do a Series A round for $2-3 million that’s fine as long as you’re doing awesome against your metric goals and the market continues to be frothy.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Feld Thoughts

SEPTEMBER 9, 2015

If private capital is no longer available in the future, these companies will seek a public offering or acquisition.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70