The Startup Magazine

SEPTEMBER 12, 2019

While the rewards may be a boon to their company in the short term, the consequences of accepting outside funding too early can be debilitating. There’s a reason why I refer to early-stage VC funding as vulture capital, and to be honest it’s pretty accurate. Money in Exchange for Control. There was no outside pressure.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

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

Both Sides of the Table

SEPTEMBER 5, 2012

As in, “your money into my company will convert at a 15-20% discount to the next round of capital I raise with a maximum price of $8 million pre-money valuation (or whatever the cap was).” You rarely find full ratchets in early-stage deals any more. What happens in a sale or acqui-hire?

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

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. percent going to Investor C.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

ReadWriteStart

OCTOBER 7, 2010

Bottom line, early stage equity is very, very expensive. So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. Then Liana Thompson pitched Trendy Loot , a very early stage deal site for low-end jewelry.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. Few entrepreneurs can do it alone, with subordinate hired help and no expert management to share the burdens, skill sets, and efforts involved in growing the enterprise. Reward for early risk. It starts with sharing the opportunity and upside.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. It’s very simple.

Pre-Money Valuation 150

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

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

Both Sides of the Table

FEBRUARY 17, 2011

million and you’re an early stage business this is probably a fair deal. You’re offered a $9 million pre-money to raise $3 million (e.g. 5 million raised at a $9 million pre-money valuation or 35.7% They hire a team that spends more time with more customers. 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

This is going to be BIG.

JULY 30, 2015

Toss in a few acqui-hires in the $6-8mm post seed. After factoring in price and mortality rate (risk), every stage's investor would be trying to get a return that satisfies their LPs--and I think that's the same across all early stages. Series A's are done as a $5mm round on a pre-money valuation of $15mm.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

www.paulgraham.com

APRIL 28, 2010

4 ] Seed Funding Firms Seed firms are like angels in that they invest relatively smallamounts at early stages, but like VCs in that theyre companiesthat do it as a business, rather than individuals making occasionalinvestments on the side. Angels and even VC firms occasionally do this, but they alsoinvest at later stages.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million. I don''t think early stage investors are taking enough risk.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

www.currentlyobsessed.com

MAY 28, 2010

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. For some closing thoughts, I’ll just add that: Valuation tends to be too much of a focus for most early stage companies.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

www.paulgraham.com

OCTOBER 23, 2010

One of the best tricks I learned during our startup was a rule for deciding who to hire. And when businesspeople try to hire hackers, they cant tell which ones are good.Even other hackers have a hard time doing that. When we got real funding nearthe end of 1996, we hired a great CFO, who fixed everything retroactively.

Startup 105

Startup Cofounder Software Stock 105

This is going to be BIG.

SEPTEMBER 7, 2012

So, the idea that it's a good or bad idea to follow on, or to play in certain stages versus others--honestly, it's a lot of marketing hype and anecdotal stories that really don't play out across the law of large numbers. Some of this thinking is also driven by folks who aren't well connected to the rest of the later stage venture community.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99