YoungUpstarts

JUNE 26, 2020

If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. To do that you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation. Unfortunately, much of this advice is wrong.

Finance 205

Finance Silicon Valley Valuation Startup 205

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? On the one hand, you’re over paying for every investment and valuations aren’t rational. Of course we can’t.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

The Startup Magazine

JUNE 1, 2023

As an early-stage company that just closed our seed round at $8.1 There are currently tons of “zombie” startups that have runway, but growth has slowed and they have valuations that they won’t be able to grow into. So what does an early-stage company do to avoid the doom and gloom plaguing the world of startups?

Early Stage 110

Early Stage Los Angeles Silicon Valley Cofounder 110

Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. The “big boom” in startup financing started around March 2009?—?more Where are we today? .” more than 5 years ago?—?and and hasn’t abated.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

ReadWriteStart

OCTOBER 7, 2010

Before I do, however, I want to talk about a thumb rule that I'd like to propose to entrepreneurs about raising money. Bottom line, early stage equity is very, very expensive. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

OCTOBER 12, 2014

These tensions seep out in some angels or seed funds publicly or semi-privately deriding later-stage VCs for their “bad” behavior. I have seen bad behavior from later-stage VCs, believe me. But I have seen equally bad behavior from super early stage investors. As always a balanced perspective is in order.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. Or, in the case of a convertible note, they’ll explicitly state a valuation cap. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. I have conversations with entrepreneurs and other VCs on a daily basis about fund raising, the prices of deals, how much companies should raise, etc. You can be pissed off, but I don’t set prices. That’s stupid.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. So I spend an inordinate amount of time with entrepreneurs focused on payback. LTV is imprecise.

Metrics 150

Metrics Cost Acquisition Startup 150

View from Seed

JANUARY 27, 2021

. $100M is a meaningful increase from our $50M third fund, though it’s still quite small in the grand scheme of venture, especially amid the recent wave of late stage financings and SPACs. We believe that this fund is the perfect size for us to be the best possible partners to early-stage entrepreneurs today.

LP 411

LP Early Stage Seed Stage Venture Capital 411

YoungUpstarts

OCTOBER 28, 2015

This past summer, the Lightspeed Summer Fellowships program invited selected guests to provide aspiring entrepreneurs a perspective into all aspects of starting a new company. The program provides entrepreneurs the resources and mentoring they need to build their companies and develop their skills. ” The Cost of Financing. .

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder. Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

MARCH 22, 2020

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. In these cases both the entrepreneur and the friends are the fools. Don’t be one or create one.

Management 308

Management Cram Down Angel Investor Equity 308

Both Sides of the Table

AUGUST 14, 2009

I recently wrote a post on angel financing covering the topic of convertible notes but I realized I was thinking about the issue more from investor perspective and a very narrow topic of how to price the round. So if you’re casually reading and don’t really care about angel financing – abort now! That’s OK.

Silicon Valley 291

Silicon Valley Ireland Technical Review Valuation 291

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations. 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.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation?

Valuation 100

Valuation Stock Options CPA Merger 100

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, playing coy, or quoting an exorbitant number.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Feld Thoughts

NOVEMBER 18, 2013

Ari Newman is an entrepreneur, mentor, investor, and a friend. He works at Techstars where his responsibility is to ensure that the connections between alumni, mentors, and staff are as robust as they can be – helping entrepreneurs “ do more faster ” day in and day out.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Hearpreneur

MAY 31, 2021

An entrepreneur and financial asset manager, Bardya Ziaian is an innovator within the emerging industry of fintech. Now, he is CEO and President of Sittu Group , where he consults with companies, designs systems, and works to invest in early-stage businesses. Bardya Ziaian: I knew that fintech represented the future of finance.

Finance 62

Finance Early Stage Canada Agile 62

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

The Startup Magazine

JUNE 2, 2021

Over the past few years, the number of entrepreneurs has been rising steadily. The path of being a successful entrepreneur isn’t for the faint-hearted. The path of being a successful entrepreneur isn’t for the faint-hearted. The following are alternative ways in which entrepreneurs can raise funds for their startups.

Due Diligence 124

Due Diligence Startup Finance Early Stage 124

www.entrepreneur.com

SEPTEMBER 22, 2011

Follow Entrepreneur on Facebook Follow Entrepreneur on Twitter Follow Entrepreneur on LinkedIn Subscribe | Mobile. Startup Basics Does College Matter for Entrepreneurs? Financing Some Jobs Act Proposals Make Headway. Branding From Entrepreneur to Icon in Five Steps. Business & Small Business.

Sweat Equity 55

Sweat Equity Equity Fractional CTO CTO 55

Version One Ventures

DECEMBER 14, 2016

In other words, any correction in public valuations happened quickly and has now stabilized. From Series A and onwards, fundraising takes longer and valuations are typically below the expectations and benchmarks of 2015. This can set up a perfect storm if early-stage companies don’t manage their expectations and reality properly.

Technical Review 60

Technical Review Early Stage Portfolio Valuation 60

OnlyOnce

JULY 30, 2020

If you’re a founder entrepreneur who has led your company for several years, the odds are you have a significant amount of emotional investment in your company, too. For many entrepreneurs, the company is a deeply embedded part of their identities as a human – right or wrong, for better or for worse.

Cap Table 48

Cap Table Institutional Investors Startup Early Stage 48

View from Seed

JANUARY 11, 2021

As high-conviction, seed stage investors, we are inherently relationship-driven, and we value meeting exceptional founders face-to-face. With the onset of COVID-19, we, along with the broader ecosystem of venture capitalists and entrepreneurs, have been pushed to rapidly adapt, forge connections, and do our jobs remotely.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

Both Sides of the Table

JULY 27, 2014

We both agree that the later-stage valuations are being driven up to a point that feels irrationally priced [he uses b-round SaaS valuations as an example and I am willing to be even more broad based]. Video 1 is here : Late stage valuations are in a mini bubble.

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

Mucker Lab

MAY 28, 2020

Some entrepreneurs think that (more) money will solve all their company’s problems. These lost startups land higher valuations, have larger teams, outsource more product development and spend more money on customer acquisition than their peers. We believe the message applies as much today as it did in 2015 when it was published. --.

Startup 78

Startup Cofounder Burn Rate Technical Review 78

Berkonomics

JANUARY 20, 2022

Dave’s note: This is a reprint of a 2015 insight that seems to have struck a chord with investors and entrepreneurs. None of this advice has changed… Let me tell you a few short hair–raising stories of entrepreneurs who have raised money and regretted it later. The problem, of course, comes if the business fails.

Valuation 127

Valuation Startup Seed Money Early Stage 127

Gust

SEPTEMBER 29, 2011

The most successful serial entrepreneurs in the world may found three or four, perhaps even eight or ten venture-backed startups over the course of their careers. It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Both Sides of the Table

AUGUST 24, 2015

So why invest in that period of uncertainty unless it’s early-stage and thus valuation matters less. You might also favor a quicker close at a slightly lower valuation than you had hoped in order to decrease risk. At least later stage investors. This could have an impact on later-stage valuations.

Stock 150

Stock Finance Marketing Valuation 150

OnlyOnce

OCTOBER 31, 2013

If you’re fortunate enough to have built a really strong early stage company, you will find yourself in the position of being able to pick from a number of potential venture investors. But as an entrepreneur, you can mitigate the number of times you have to walk away by developing good alternative options to a particular deal.

Valuation 133

Valuation Term Sheet B2C Security 133

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … 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. Your A round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Genuine VC

NOVEMBER 12, 2012

Dharmesh Shah had a great post up last week about the lessons learned from raising a mezzanine round of financing. It’s really interesting, but perhaps only applicable to a more limited set of entrepreneurs. When you compromise on terms in the early stages, you will have to pay the price in the later stages.

Finance 128

Finance Mezzanine Valuation Seed Stage 128