Both Sides of the Table

FEBRUARY 16, 2017

I hear tons of ideas for early-stage apps. 12m on a $60m for an early-stage business is a not a bet that most LA firms could or would take. We felt proud to be the lead investor in Maker Studios at a sub $5 million valuation. I simply couldn’t see it. I should have.

IPO 214

IPO Los Angeles Technical Review Silicon Valley 214

YoungUpstarts

OCTOBER 12, 2017

To outside investors, the future of early stage and startup companies can be murky. Many of these companies are pre-revenue and in the cash burn stage as they try to establish their technology and market. When investors believe in the founders, products, or ideas they will provide companies with funding.

San Francisco 114

San Francisco Forecast Early Stage Term Sheet 114

Rob Go

SEPTEMBER 4, 2018

It occurred to me that although we mentioned our new thematic approach when we raised our last fund in 2017, we haven’t really shared a broader manifesto about how we are approaching the early stage market. It’s been an interesting several years in the early stage venture eco-system, and the sands have shifted considerably.

North America 36

North America Seed Stage Early Stage Lead Investor 36

David Teten

DECEMBER 15, 2018

Existing investors have said they’d be glad to invest…if she gets a new lead investor, which 6 months of searching have failed to generate. Never forget, on their best day any group of investors is a step away from a lynch mob…and that’s their best day. . Almost all VCs will have companies that fail.

Startup 60

Startup Later Stage Technical Review Software Review 60

View from Seed

FEBRUARY 23, 2021

For early stage VC ‘s, Syndication is the process of sharing investments with other potential co-investors. The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor. The post The End of Syndication appeared first on NextView Ventures.

Syndicate 207

Syndicate Syndication Term Sheet Cofounder 207

David Teten

SEPTEMBER 6, 2018

See my summary on how lead investors think about building out their syndicate. . See Beyond the Money: Best Practices of Venture Capitalists in Helping Early-Stage Companies Create Value and It’s the People: Improving Private Equity Portfolio Company Valuations by Working with Operating Executives. 5) Manage deal flow.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

David Teten

SEPTEMBER 6, 2018

See my summary on how lead investors think about building out their syndicate. . See Beyond the Money: Best Practices of Venture Capitalists in Helping Early-Stage Companies Create Value and It’s the People: Improving Private Equity Portfolio Company Valuations by Working with Operating Executives. 5) Manage deal flow.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

Both Sides of the Table

FEBRUARY 15, 2016

There are ways to do this politely and even if your investors don’t answer as directly as you may like – there is at least something that can be read into this. If you have mostly angels or don’t feel your existing investor can support you without new capital from the outside then you might want a smaller burn rate.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

View from Seed

DECEMBER 6, 2018

Almost seven years ago, I wrote a post about the difference between a “no” answer and a “no yet” when pitching early-stage VCs. Parsing Seed & Early-Stage VCs. Increasingly some seed VCs are specializing in a particular segment of the “spectrum” of seed stage. [ When “Too Early” Isn’t a “No”.

Seed Stage 120

Seed Stage Early Stage Differentiation Lead Investor 120

Berkonomics

JANUARY 25, 2024

Board members or lead investors as coaches If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success. However, there surely are experienced executives out there who’ll work for a meal. It is worth asking.

SBA 62

SBA Warrant Stock Options Vesting 62

View from Seed

JANUARY 11, 2021

billion across 2,288 deals in Q3, with deal count exceeding Q2’s at nearly every stage. . Early stage deal activity showed real resilience coming off of a slow Q2, with deal count at angel and seed stage in 2020 now about at par with the same period in 2019. Familiar loops offered invaluable, pre-seeded confidence.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

techcrunch.com

APRIL 26, 2013

From 2004 to 2007, she helped lead Congresswoman Carloyn Maloney’s community outreach and relations efforts in New York City. In December, AngelList , a service that matches early-stage startups with investors, debuted the ability to allow accredited investors to actually invest in startups on the platform with as little as $1,000.

SEC 61

SEC Accredited Investor San Diego New York City 61

Hippoland

APRIL 9, 2017

3) You act cagey about information Early stage investors understand that there is a lot of work to do in an early stage startup. This leads investors to believe that there is something either really wrong with your business or that you, as a founder, are not sharp. But that’s ok.

Cofounder 48

Cofounder Early Stage Software Review Naming 48

The Next Web

JUNE 6, 2014

Jay Patani is an analyst at EC1 Capital, a London-based early stage, Web technology focused venture capital company. Whilst exact details remain unclear, Tech City declared that companies on the program have access to a team of leading investors, accounting firms and business leaders for ongoing advice and support. .

United Kingdom 141

United Kingdom Europe IPO Early Stage 141

A Crowded Space

OCTOBER 3, 2018

Very shortly after I joined, Greg Gretsch (now my partner at Jackson Square Ventures) co-led oDesk’s Series A along with Venky Ganesan (partner at Menlo Ventures and lead investor in Rev.com). Back in 2004 - 2010, he would routinely send me early stage companies to check out as part of his diligence process.

San Francisco 60

San Francisco Bangladesh Ukraine Philippines 60

Hunter Walker

JUNE 14, 2019

Because as an early stage lead investor one of our responsibilities is to help a company think through its strategy and provide feedback on the pace and quality of execution. The company most likely did not accomplish the milestones required to move their business forward. Why do I raise this distinction?

LP 100

LP Early Stage Lead Investor Founder 100

Hunter Walker

NOVEMBER 21, 2018

If you don’t have a mission or problem you’re passionate about, where investors are aligned on the business, and it’s still early stage, you’re better off returning the cents on the dollar. At the same time, investors should give the founders some space to figure out if they want to push on or not.

Founder 96

Founder Cap Table Seed Stage Cofounder 96

View from Seed

JANUARY 26, 2016

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. Series A investors invested quite early, often before product/market fit. These tend to be cases where founders are proven.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Hunter Walker

DECEMBER 30, 2022

What there isn’t a whole lot of: Early stage investors with institutional lead check experience (and a small support team, large networks, etc), who are investing their own capital, in a flexible manner, and then working post-investment to provide additional ongoing support.

Cap Table 67

Cap Table Venture Capital Cofounder Portfolio 67

David Teten

SEPTEMBER 5, 2014

Over the past 15 years we’ve built this amazing membership to serve our core clients – leading investors, corporations, consulting firms, and nonprofits. For example, if you’re an early stage company dealing with complex regulation (think Uber in transportation, Oscar in healthcare, LendingClub in finance), we have people who can help.

New York 114

New York Technical Review Networking Advisory Board 114

Both Sides of the Table

JUNE 5, 2015

Pre-money ($8m) + investment ($2m) = Post-money ($10m) and the investors now own 20% of your company $2m / $10m. In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. So how DOES a VC think about financings at early stages?

Pre-Money Valuation 150

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

Both Sides of the Table

JULY 5, 2011

We’re almost always the lead investor and usually the most active, too. In the past 15 years our partners have backed nearly one company every year that was early stage and eventually exited for North of a billion dollars. Look more modern than our previous website, which had a very 2000 feel to it.

Early Stage 260

Early Stage Lead Investor Portfolio Partner 260

ithacaVC

FEBRUARY 27, 2014

For example, “VC will serve as the lead investor up to $400,000; Company would source balance of the round up to $600,000 (so round size would be up to $1,000,000 in the aggregate).”. At the early stage, the founding team often has lots of “interest” lined up waiting for a lead. I hear this often.

Term Sheet 71

Term Sheet Aggregator Lead Investor Early Stage 71

Berkonomics

DECEMBER 7, 2017

If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success. There must be many more creative ways to pay a coach, especially for early stage businesses. It is worth asking.

Warrant 97

Warrant Stock Options Vesting Equity 97

OnlyOnce

APRIL 27, 2021

The conversation with a new potential investor about not taking a board seat. If you have a big new lead investor writing a $40mm check into a growth round, you may not have a leg to stand on. If they ask why you’re not renewing them, you can simply say something like “We’d like to add some fresh outside perspective to the team.”

Vesting 48

Vesting Cofounder Startup Term Sheet 48

Haystack

SEPTEMBER 2, 2018

I am not here to judge what the investor cited in the tweet did or didn’t do well. What I do feel deeply, however, is that we all in the early-stage startup ecosystem are likely being a bit too over-protective. For any investor raising their own funds, you may have to chase down capital calls for each investment.

Seed Stage 76

Seed Stage Seed Capital Equity Europe 76

The Startup Toolkit

NOVEMBER 4, 2011

Regarding structure, the first deal is a rolling round with committed lead investors. In an early stage deal, you check the numbers to avoid getting exploited, but you make your decision based on the investors. Next, we check that we’re safe from any particularly onerous terms like participation preferred.

Term Sheet 31

Term Sheet Dilution Participating Preferred B2C 31

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Both Sides of the Table

APRIL 3, 2010

So if a VC wants to work with really talented early-stage entrepreneurs there are times where they have to be willing to seed fund them in order to be in the deal. A very well known early stage fund used to have a rule that they didn’t do follow ons. Foundry is both stage agnostic and s yndication agnostic.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Hunter Walker

APRIL 20, 2018

Like we do at the seed stage, USV almost always plays the role of “ lead investor.” ” And later: “The truth about these situations is a few seed investors will massively over deliver and the rest will massively disappoint.” But it often is not.”

Seed Stage 48

Seed Stage Lead Investor Portfolio Reputation 48

Rob Go

AUGUST 29, 2016

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. Today, nearly all early stage term sheets I see are expressed as post-money valuations. That is, the valuation of the company prior to the investment of new capital. Worst case, they say no.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Feld Thoughts

DECEMBER 15, 2016

Post seed boards tend to be founder and investor-centric. With each round, the new lead investor gets a board seat and all of the other significant investors get either a board seat of an observer seat. This is the norm that I’ve seen over the past 20 years.

Sales 70

Sales Seed Stage Early Stage Finance 70

Both Sides of the Table

MAY 30, 2018

Many VCs will have a distribution curve where they’ll do a small number of early-stage deals (say $1.5–3 3 million invested at a $6–10m pre-money), a larger number of “down the fairway” deals ($4–5 million at a $15–25 million pre) and a few later-stage deals (say $8–10 million at a $30–40 million pre).Of

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

www.seriesseed.com

DECEMBER 9, 2012

I hesitate to use a quote from one of the greatest people ever to grace planet earth, and certainly the question of how to structure early stage investment is a laughable cause as compared to the rights that Ghandi (also a lawyer) fought to advance.  I’ve attached version 2.0

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Rob Go

JULY 17, 2014

We’ve often explained to entrepreneurs that the second fund of a venture firm is very much like the series A for an early stage company. For a seed stage venture capital firm, product/market fit comes down to two questions. But a larger fund also allows us to invest a broader range of amounts in early seed rounds.

Seed Stage 69

Seed Stage Early Stage Due Diligence Liquidity Event 69

The Startup Toolkit

NOVEMBER 4, 2011

Regarding structure, the first deal is a rolling round with committed lead investors. In an early stage deal, you check the numbers to avoid getting exploited, but you make your decision based on the investors. Next, we check that we’re safe from any particularly onerous terms like participation preferred.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20

Hunter Walker

JANUARY 10, 2022

The needs of the lead investor for ownership? A round that is most accommodating for the existing investors while allowing you to get new people involved? Next would be the fund itself: reputation, expertise (early stage vs. multi), and market experience (fintech/insurtech).

Cofounder 89

Cofounder Founder Acquisition Startup 89