Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. You rarely find full ratchets in early-stage deals any more. That’s not possible.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

NOVEMBER 14, 2017

As a startup in this phase you often raise capital, get press, hire staff and everything feels possible. As an early-stage VC I love this phase. I always push companies to hire “an operationally focused CFO” during this phase because in order to systematize you need somebody who brings economic rigor to decision making.

Operations 286

Operations New York City Technical Review Startup 286

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. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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. Sustaining short-term losses is all predicated on ability to finance the losses through venture capital or other means.

Metrics 150

Metrics Cost Acquisition Startup 150

YoungUpstarts

OCTOBER 28, 2015

This article highlights their advice on issues ranging from financing to patent trolls: While startups may believe lawyers are too costly, working with one early on avoids potentially serious problems later. “And if you have a valuation cap; a higher cap is always better than a lower cap.” Convertible Securities.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

Mucker Lab

MAY 28, 2020

These lost startups land higher valuations, have larger teams, outsource more product development and spend more money on customer acquisition than their peers. Hire the wrong people. Bad hiring decisions are often a symptom of premature scaling. Why hire a sales team when you have nothing to sell yet?

Startup 78

Startup Cofounder Burn Rate Technical Review 78

Up and Running

SEPTEMBER 19, 2017

They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. 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.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Feld Thoughts

NOVEMBER 18, 2013

Following is his advice to early stage entrepreneurs for creating structure in their company. Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

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

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. However, at the very early stage, they are taking as much risk with their future as the founders. As stated earlier, investors will dilute ownership upon nearly every round of financing. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

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!

Silicon Valley 291

Silicon Valley Ireland Technical Review Valuation 291

David Teten

DECEMBER 3, 2019

Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. The Pocket Negotiator is very early-stage attempt to aid in the negotiating process itself. I have not found a thorough platform for due diligencing all aspects of a potential investment. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

www.entrepreneur.com

SEPTEMBER 22, 2011

Entrepreneur Homepage Startups Starting a Business Home How-To Guides Startup Basics Business Ideas Business Planning Startup Financing Success Stories Home-Based Business Starting a Business Play Video How to Take a New Product from Just an Idea to a Business (Video). Financing Some Jobs Act Proposals Make Headway.

Sweat Equity 55

Sweat Equity Equity Fractional CTO CTO 55

Austin Startup

FEBRUARY 13, 2019

Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. Some came from angel investors, but we also sought out industry experts to be early contributors in this stage, which leads me to tip number three.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Up and Running

DECEMBER 9, 2014

Bates: Good morning and welcome to our CEO panel, “How to Fine-Tune Your Small Business Finances From Funding to Growth” which I think is the direction that we would all like to be going. I’m here with some really phenomenal CEOs who are going to talk to us today about small business finances from funding to growth.

Small Business 95

Small Business Finance Forecast Metrics 95

Steve Blank

FEBRUARY 26, 2020

For startups the early stage funding landscape looks like this: Step 1: The Pre-seed round – you raise $100-$750K. Btw, the definition of each startup financing stage has changed in the last decade. On the other hand, in a SaaS business $1 in recurring annual revenue equals ~10x in valuation.). Valuations.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. Seed stage was super tough. In addition, the competition for and the cost of hiring people, especially in the San Francisco Bay Area, has gone up dramatically. A re-jiggering of deal stages and sizes had begun in 2013. The Epilogue.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Austin Startup

AUGUST 20, 2017

Early stage startups have to survive one day at a time and are often presented with limited choices of the moment that enable them to continue. Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. In the old days VCs funded off of a “pre-money” valuation. It’s very simple.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

500hats.com

AUGUST 2, 2012

Other angel investors and smaller funds also copied this innovation, and many of these new Micro-VC fund managers (like me) came from operational backgrounds at companies like PayPal/eBay, Yahoo, Amazon, or Google, rather than finance backgrounds from investment banking or Wall Street. and no, we didn’t.

Silicon Valley 74

Silicon Valley Early Stage Venture Capital Valuation 74

Austin Startup

MAY 19, 2018

 —  @birsic So without further ado, here are my thoughts on some dos and don’ts for early stage investors. Disclose intentions early It’s not a big deal if you’re doing diligence on a competitor. The bottom line is that being a seed stage founder is mostly a very thankless job. Wonder why that is ??

Founder 75

Founder Early Stage Software Review Deal Flow 75

Up and Running

JULY 22, 2019

A telling success factor for new businesses looking to make an impact in their industries is whether they can attract investment at an early stage of development. . More specifically, companies are able to see notable success when they allow investors to engage early on. Start early. Do not be greedy.

Canada 78

Canada Early Stage Valuation Finance 78

Early Growth Financial Services

AUGUST 30, 2013

Outsourced financial services firm adds valuation to suite of services to provide early-stage companies with a comprehensive integrated-service approach to finance. Their mission in expanding their service offerings is to provide an increasingly more comprehensive financial solution for early-stage companies.

Valuation 31

Valuation San Francisco Silicon Valley Stock Options 31

www.businessinsider.com

SEPTEMBER 6, 2012

This Chart Shows Why VCs Are Willing To Give Hyped Startups Absurd Valuations. Many if not most seed investments in startups these days are done in the form of convertible debt, which is a loan that can convert to equity in a subsequent financing. But the convertible cap has increasingly been used as a guide for valuation.

Silicon Valley 54

Silicon Valley Startup Valuation Venture Capital 54

reidhoffman.org

NOVEMBER 12, 2013

Friendster’s valuation set the tone for the entire social networking space. You may happen to emphasize the right points that pique an investor’s interest, but you shouldn’t leave your financing up to chance. Second, understand the broader financing climate. Steer into your investors’ objections.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. Do you have relationships with other investors at the next stage of the investment lifecycle?

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Reid Hoffman

JANUARY 19, 2021

With his usual awesome first principles focus, my friend Reed Hastings has articulated that the fundamental responsibility of the board is to hire, fire, and compensate the CEO. For example, I frequently tell people that hiring a CEO is an activity that usually has–at best–a.500 500 batting average for improving the company.

Startup 36

Startup Cofounder Advertising Hiring 36

VC Cafe

MARCH 27, 2022

As an investor, it’s not always easy to assess the team at the very early stage, especially if they didn’t come from working in the space before. Yuga Labs, the team behind the Bored Ape Yacht Club (BAYC), announced earlier this week that it had raised $255 million seed round led by A16Z at a $4 billion pre valuation.

Cofounder 179

Cofounder Venture Capital Equity 179

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 21, 2011

The question is further complicated when the new hire is getting a salary. Here’s why: Suppose a new hire just quit a job paying $10,000/month and agrees to take $3,000/month for a year with you, after which time (assuming the company does as well as everyone hopes) she’ll be raised back up to $10,000/month.

Equity 276

Equity Salary Hiring Institutional Investors 276

www.currentlyobsessed.com

MAY 28, 2010

Valuation is an important aspect of VC deal terms, and a major determinant of your ultimate outcome. I unexpectedly found that it was more helpful to think about the company valuation as an output variable in the fund-raising equation. It hardly deserves any attention at all in the early stages. Or is it?

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

YoungUpstarts

APRIL 18, 2019

As a founder, you have to come to terms with not having complete control — of your team, the market, or your valuation. But early-stage startup founders can’t think this way, because when immediate goals are unrealistic or unachievable, a startup is bound to crash and burn. We’re not worth a billion dollars.

Cofounder 127

Cofounder Startup Private Equity Equity 127

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Would I hire a broker? That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business. I have the weeks to follow to make mine.

IP 54

IP Intellectual Property Investment Bankers Product 54

K9 Ventures

APRIL 9, 2014

Massive late stage rounds The late stage (Series B and Series C) investors are hunting for breakout companies that have serious traction. The low supply and high demand is driving up the valuations and deal sizes. Hiring costs are up dramatically The cost of hiring top quality talent in the bay area has gone up dramatically.

Mezzanine 134

Mezzanine Seed Stage Early Stage IPO 134

Seeing Both Sides

SEPTEMBER 15, 2015

Only a handful of so-called unicorns — companies that have achieved a valuation of over $1 billion in the last 10 years — come from Israel, and only one Israeli firm, Teva, ranks in the world’s 500 largest companies by market capitalization. until the late-stage go-to-market phase may be too late. That’s the good news.

Cofounder 20

Cofounder Technical Review United States 20

Eric Friedman

AUGUST 18, 2021

He is also co-founder and Managing Partner of Deciens Capital, an early stage investment fund. This doesn’t concern any specific industry, but that kind of behavioral finance. We do that primarily through leading financings. Today, we are lucky to welcome Dan Kimerling of Deciens Capital. You have to pick one.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88