Startup Professionals Musings

JUNE 13, 2020

Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds. VCs tend to demand more control of your spending and strategic decisions, with required board seats and lower valuations.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices.

Asia 132

Asia Silicon Valley India Term Sheet 132

David Teten

SEPTEMBER 23, 2017

PEVCTech is partnering with Blue Future Partners to run the first large-scale survey of VCs’ technology stack. Johann Kratzer of Blue Future Partners , a fund of funds, observed, “The majority of the hundreds of funds we’ve diligenced rely predominantly on their relationships to source deals. Greylock Partners.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

David Teten

MARCH 18, 2021

A typical VC thesis: “we invest in tech startups in Europe at an early stage” However, our experience shows that in many cases: . Thirty-four VC firms in OpenVC call themselves “early-stage” Yet, 30% of those don’t actually invest in pre-revenue startups. Valuation: $1M – $3M.

Technical Review 78

Technical Review Cofounder Venture Capital Deal Flow 78

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

Berkonomics

AUGUST 3, 2023

My experience with early valuations by founders for friends… I’ve arrived at a significant number of companies that were looking for additional growth capital after a “friends and family” round and had to “clean up” the cap table more than a few times over the years. It is most often a win-win for both you and the strategic partner.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

VC Cafe

JULY 5, 2010

To learn more, VC Cafe interviewed Brian Rosenzweig, one of the managing partners in the new fund and the former marketing director at 21Ventures. based Angel capital with early stage technology companies in Israel, and do so in a way that substantially mitigates the risk of seed stage investing.

Technical Review 106

Technical Review Software Review Seed Stage 106

K9 Ventures

JUNE 5, 2015

There were massive late stage rounds because all the big funds wanted companies which already had traction. Low supply of companies with traction drove the valuations and deal sizes up. Seed stage was super tough. Valuations are rising to match. The risk here is what I refer to as the curse of over-capitalization.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

View from Seed

APRIL 30, 2015

Use good judgment, talk to your co-founders/investors/lawyers, and partner with a bank that values transparency and relationships such as SVB.]. Especially in the early stages, so much about the company may change in how they think about product or go-to-market — and change multiple times — before raising an institutional round.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

AUGUST 2, 2014

Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds. VCs tend to demand more control of your spending and strategic decisions, with required board seats and lower valuations.

Angel Investor 266

Angel Investor Entrepreneur Venture Capital IRR 266

Austin Startup

JUNE 27, 2017

Collectively they have $850M in capital in their most recent funds: [link] Both Silverton Partners and LiveOak Venture Partners have filed regulatory documents associated with new fundraising efforts in 2017 so we should all look forward to announcements from them on successfully raising new funds.

Venture Capital 54

Venture Capital Austin Texas Private Equity 54

Startup Professionals Musings

JUNE 5, 2016

Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds. VCs tend to demand more control of your spending and strategic decisions, with required board seats and lower valuations.

Angel Investor 120

Angel Investor IRR Valuation Startup 120

Both Sides of the Table

DECEMBER 3, 2013

I’m an early-stage investor. I normally look to invest my first money below a $20 million valuation and when deals get to lofty prices I normally bow out to later-stage investors who have deeper pockets. In the B round we invested the maximum amount we could alongside the lead – Scale Venture Partners.

Iran 358

Iran API San Francisco Nigeria 358

Both Sides of the Table

AUGUST 24, 2015

I made my calls around to a few firms today to hear how their partner meetings went. 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.

Stock 150

Stock Finance Marketing Valuation 150

Hunter Walker

SEPTEMBER 22, 2014

If you’re one of these funds, it’s probably the right strategy in the nearterm, although I think greatest risk is that you’re ‘winning’ these deals but end up applying your later-stage POV to these early stage companies. 2) Larger Funds Buying Up Early to Outbid Other Funds Later.

Later Stage 95

Later Stage Valuation Semantic Institutional Investors 95

Startup Professionals Musings

FEBRUARY 5, 2012

It wouldn’t work anyway, since your valuation at that stage would be less than the funding, meaning you would have to give away all ownership for the money. You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages.

Investment Bankers 241

Investment Bankers Venture Capital Startup Initial Public Offering 241

Feld Thoughts

NOVEMBER 2, 2016

The existential freakout that occurred in January and February seemed like the distant past with the lingering hangover being a clearer focus on valuation and overall funding needs from new investors. It continues to be highly dependent on company, stage, and location. Will this continue through the year? Decide to do it.

Venture Capital 70

Venture Capital Private Equity Early Stage Valuation 70

Berkonomics

JUNE 8, 2017

It is most common to greatly overprice such a round of financing, valuing the enterprise well above what it may be worth at the moment for friends or related investors who do not have the sophistication or willingness to challenge the valuation. It is most often a win-win for both you and the strategic partner.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

OCTOBER 13, 2010

It wouldn’t work anyway, since your valuation at that stage would be less than the funding, meaning you would have to give away all ownership for the money. You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages.

Investment Bankers 231

Investment Bankers Venture Capital Startup Initial Public Offering 231

Both Sides of the Table

MARCH 1, 2010

But when I’m looking to invest the dollars that my Limited Partners have entrusted my firm with I’m going with my view. This return won’t be enough for me to justify for me partners.” In 2006, Steven Dietz, a partner at my firm, GRP Partners, had given me $500,000 in a seed in convertible debt when I started my second company, Koral.

Entrepreneur 321

Entrepreneur Warrant Silicon Valley Early Stage 321

Gust

NOVEMBER 22, 2011

It wouldn’t work anyway, since your valuation at that stage would be less than the funding, meaning you would have to give away all ownership for the money. You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages.

Venture Capital 171

Venture Capital Investment Bankers Angel Investor Initial Public Offering 171

The Equity Kicker

JANUARY 14, 2016

Through much of last year there was talk of a bubble in venture capital, particularly in late stage investments. That process started quietly after the summer last year.

Cloud 60

Cloud Valuation Venture Capital Later Stage 60

Reid Hoffman

JANUARY 19, 2021

They might both be accomplished writers or editors, but for a particular project, each partner focuses on a single role, and their different foci make the partnership stronger. The first and most fundamental application of this oath is understanding that, for early stage startups, replacing the CEO is almost never an option.

Startup 36

Startup Cofounder Advertising Hiring 36

Ben's Blog

MAY 24, 2021

Editor’s Note: This testimony was delivered by a16z managing partner Scott Kupor to the U.S. By way of background, I am the Managing Partner for Andreessen Horowitz, a $16.5 billion multi-stage venture capital firm focused on IT-related investments… I also serve on various investment committees, including for the St.

SEC 36

SEC Accredited Investor IPO Technical Review 36

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Rob Go

NOVEMBER 30, 2015

In October, we held our annual Limited Partners meeting at NextView. While we continue to focus on companies that are very early, usually well before PMF, we also hear of more and more seed funds that “want to see more traction” before investing. Usually, the balancing force for this sort of momentum strategy is pricing and ownership.

Later Stage 28

Later Stage Marketing Early Stage Ratchet 28

techcrunch.com

FEBRUARY 19, 2010

According to VCs, there’s been a 65% decrease in up-rounds (where a company gets a bigger valuation) in the last six months and more than 60% of those polled expect a longer wait for an exit. Been there Done that This is very depressing for all future founders, or even currently early stage founders.

Venture Capital 62

Venture Capital Technical Review Sweat Equity Valuation 62

K9 Ventures

MAY 14, 2011

In my view the terminology being used for early stage investors by the press and the media is not as clear as it should be. I’ve talked about this on several occasions when I’ve been at conference and on panels, but I figured it would make sense to do a post explaining my taxonomy of the early-stage investing world.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

www.paulgraham.com

APRIL 28, 2010

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Gust

SEPTEMBER 5, 2012

” Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum” Taku , a partner at my “alma mater” law firm Wilson Sonsini Goodrich & Rosati , created quite a stir this past week by announcing a new set of template deal documents dubbed “ Convertible Equity.”

Finance 134

Finance Convertible Security Equity Seed Stage 134

Hippoland

NOVEMBER 13, 2016

But as we’ve seen, these valuations can be hocus-pocus — even at later stage rounds, we’ve seen lots of companies of late fall from grace and become massively devalued overnight when they cannot raise their next round at a higher valuation. Shouldn’t they get a bump up in valuation? Equity rounds of $10m pre.

IRR 48

IRR Valuation Portfolio Due Diligence 48

Both Sides of the Table

APRIL 3, 2010

Because it is a “series&# I plan to get into some of the deeper complexities of funds such as “cross over funds&# and “why VC’s hate to price their own deals&# at a later stage. First, if the VC does 15-20 of these under one partner then it is certain he can’t spend any time with these investments.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Berkonomics

FEBRUARY 9, 2010

We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. In a number of cases, these VC partners have made the difference between success and failure or at least growth vs. stagnation. This statement could be considered controversial.

Covenant 59

Covenant Angel Investor Valuation Later Stage 59

pandodaily.com

NOVEMBER 29, 2012

This time around, there has been an explosion at the early stages, and the very late pre-IPO growth stages. But at a macro level, widespread failure this early is far less painful than if it came at later stages. In fact, if anything, there are fewer. But the Series A has remained the same.

Technical Review 93

Technical Review Silicon Valley Incubator Syria 93

Professor VC

DECEMBER 8, 2015

I think we will see more of these in 2016 and beyond as IPOs are still far and few between and unicorns struggle to justify their stratospheric valuations. Musk was the early winner taking the CEO role (for a brief period) in the merged company and the largest equity stake as well. At the IPO, Musk held a 14.2%

Merger 28

Merger LP IPO Redemption 28

Altgate

MARCH 8, 2009

I say ecosystem as opposed to industry because it is not just the VC funds themselves that are imploding, instead the collapse includes entrepreneurs and startups that were funded by VCs, angel investors, service providers like lawyers, bankers and accountants as well as limited partner investors in VC funds. But some will be saved.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

K9 Ventures

NOVEMBER 30, 2008

However, even though this is a young industry, I’m going to posit that “early-stage” venture capital as it exists today is broken and in need of reform. The General Partners (GPs) are the operating guys. Assume Shylock Ventures has 10 partners who are going to invest the $500M fund over 5 years.

IRR 48

IRR Venture Capital LP Early Stage 48