David Teten

JANUARY 19, 2021

See Why Are Revenue-Based Investors Investing in Women & Diverse Entrepreneurs? This causes the cost of capital for Flexible VC, often calculated through IRR (similar to an interest rate), can be higher than that of venture debt or traditional RBI. Less established regulatory framework. . Lower level of community familiarity.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

MAY 19, 2018

Or if you’re a VC raising from LPs you have to list all of your deals, your investment value, your carrying value, your multiples, your IRRs, TVPIs, DPIs, etc along with net cashflows plus your previous LPAs. These collective sets of documents form the basis of what somebody looking at investing would call “financial due diligence.”

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Gust

NOVEMBER 1, 2011

The selling price can be estimated by establishing a reasonable expectation for revenues in the year of the sale and, based on those revenues, estimating earnings in the year of the sale from industry-specific statistics. Based on the Wiltbank Study, investors should expect a 27% IRR in six years. OK…let’s split the difference.

Venture Capital 161

Venture Capital Valuation Pre-Money Valuation Post-Money Valuation 161

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.   Internal Rates of Return naturally compound, so a 50% IRR is 7.59

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Hippoland

NOVEMBER 13, 2016

When I was an entrepreneur, it never crossed my mind how VCs measure their success. So, as an entrepreneur, in many cases, you are pitching people who may not even be good investors. Companies that exit are valued at whatever the sale is. So there are a lot of unrealized gains built into the IRR of an early fund.

IRR 48

IRR Valuation Portfolio Due Diligence 48

Up and Running

AUGUST 19, 2014

Many angels are entrepreneurs themselves, or executives and business or community leaders. My favorite part of pitching to them was the due diligence process. This will definitely change company dynamics, so it’s important to conduct your due diligence on any investors who are interested in investing capital into your company.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Up and Running

DECEMBER 22, 2015

My personal favorite in the “pure nonsense category” is the IRR, the Internal Rate of Return , something that was interesting for about one hour as part of the MBA curriculum, but which has no relevance in the real world. Angel investors are not impressed by projections of 30-40-50% or more profits on sales.

Angel Investor 60

Angel Investor IRR Software Review Startup 60