Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Term-sheets and Valuations: Thinking about Negotiations. The Valuation Question. When companies seeking their first round of serious funding are good enough to receive a term-sheet from an investor, the first issue that always arises is valuation. Let’s start at the end.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

MAY 30, 2015

When you do a convertible note with a cap that converts into the next round of funding one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels often get “multiple liquidation preferences” on their dollars in.

Liquidation Preference 150

Liquidation Preference Ratchet Angel Investor Entrepreneur 150

abovethecrowd.com

FEBRUARY 24, 2015

As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. An unprecedented 80 private companies have raised financings at valuations over $1B in the last few years. We are in a risk bubble.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Both Sides of the Table

MAY 13, 2013

For the past 5 years or so Google, Facebook and a handful of tech industry giants have been quietly buying scores of early-stage startups for their talent. I’m supposed to believe that my best innovation can only come from scores of startup founders who just made millions and have now become CVOs at my company?

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Berkonomics

MAY 22, 2014

Angels, as group of accredited investors funding startup companies, are assumed to meet a Regulation D exemption for purchasing equity in private companies. I have yet to read a PPM written for a startup company that meets the parameters we angels generally establish for funding new ventures. Raising money'

Early Stage 79

Early Stage Accredited Investor SEC Private Placement 79

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. So while the infrastructure cost and startup costs may have declined, the operating costs have increased.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Austin Startup

AUGUST 1, 2017

This is most clearly highlighted in the “unicorn” boom we all saw over the past few years, where founders raised very large rounds, with terms very onerous to the underlying common stock, hoping they could eventually justify billion dollar valuations to skeptical acquirers or public market investors. Angels/Seed Funds v.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

abovethecrowd.com

APRIL 20, 2016

In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “ The Age of the Unicorns ” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.” Next came Rolfe Winkler’s deep dive “ Highly Valued Startup Zenefits Runs Into Turbulence. ”

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

K9 Ventures

MARCH 23, 2011

Since the financing would likely happen in short order, there was no need to have a valuation cap in the note. The founders’ interest is to maximize the valuation of the company at the time of a follow-on financing, thereby minimizing founder dilution. Notes may have fewer rights associated with them, but they come with one big hammer.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

genylabs.typepad.com

SEPTEMBER 24, 2011

Planning, Startups, Stories. Before you agree to take equity in lieu of cash, you need to understand that any individual early stage start-up company equity is most likely going to be worthless. where your stock sits in the liquidity preference stack. where your stock sits in the liquidity preference stack.

Equity 40

Equity Technical Review San Jose Stock 40

Startup Company Lawyer

JANUARY 9, 2011

Convertible debt with a price cap seems to be the preferred structure for early-stage financings. Over the last 12 months, I’ve noticed a trend where early-stage startup companies raise seed financings of between $250K and $1M using a convertible note with a price cap.

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

Altgate

DECEMBER 16, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← More on Liquidation Preferences Happy Holidays → Where Do Tech VCs Invest? 11% of deals were Cleantech and most of those were early stage. Not sure how to explain that.

Liquidation Preference 59

Liquidation Preference Early Stage Venture Capital Later Stage 59

Hunter Walker

NOVEMBER 23, 2015

So we want someone who is a very solid engineer, who cares about customers, who wants to be in a startup environment, but who also has a strong sense of engineering quality and skill. We test for both engineering skill and the softer skills. HW: You told me the other day that every Sunday you write a letter to the entire engineering team.

Engineer 48

Engineer Liquidation Preference AJAX IPO 48

K9 Ventures

OCTOBER 19, 2015

It should be clear from the first element that the process has to begin with investors who are unusually perceptive, unconventional, iconoclastic or early. ” Seeing something others don’t see is critical to early stage investing. ” That right there summarizes how I/K9 got into investing in hardware early.

Venture Capital 48

Venture Capital Liquidation Preference Valuation Portfolio 48

www.paulgraham.com

APRIL 28, 2010

When we sold our startup in 1998 I thought one day Id do some angelinvesting. You give a startup money and they give you stock. When youhear people talking about a successful angel investor, theyre notsaying "He got a 4x liquidation preference." Thats how you win: by investing in the right startups.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? The entrepreneur expects the company to be worth many times this valuation and so does the investor. So they will give you a pre-money valuation somewhere around the amount you raise.

Equity 40

Equity Employee Dilution Valuation 40