Up and Running

MAY 21, 2015

All the other sharks typically make a traditional equity investment; for example they’ll invest $100,000 at a $1,000,000 business valuation, and take 10 percent of the business. They generally also get additional rights that common shareholders don’t get, such as anti-dilution protection, and liquidation preference (discussed further below).

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

ithacaVC

SEPTEMBER 20, 2011

In “VC world” Rule 409A is best known for providing a safe harbor for private company valuations, and in particular the setting of strike prices for employee stock options. A whole cottage industry popped up, and the cost of a valuation is typically $4-8K. Here is one reason why 409A valuations drive people nuts.

Liquidation Preference 49

Liquidation Preference Common Stock Stock Options Valuation 49

Both Sides of the Table

NOVEMBER 4, 2009

If you’re thinking about joining as the director of marketing, product management manager, senior architect, international business development lead, etc. Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have.

Equity 40

Equity Technical Review San Jose Stock 40

crowdSPRING Blog

MARCH 13, 2014

These posts and videos are about logo design , web design , startups, entrepreneurship, small business, leadership, social media, marketing, and more! The Essential Email Marketing Metrics You Should Be Tracking | Hubspot blog – crowdspring.co/1gY786G. Does A Billion-Dollar Valuation Buy Employee Happiness?

Social Media 96

Social Media Small Business Design Media 96

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? 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. Should I take Angel or VC money?

Equity 40

Equity Employee Dilution Valuation 40

K9 Ventures

NOVEMBER 21, 2011

You raised a Series A round, a Series B round, and this year are just about to raise a big Series C round at a great valuation. If they have, then there is no reason the founders shouldn’t get some liquidity of their own. 3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

You raised a Series A round, a Series B round, and this year are just about to raise a big Series C round at a great valuation. If they have, then there is no reason the founders shouldn’t get some liquidity of their own. 3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity.

Founder 84

Founder Common Stock Preferred Stock Stock 84

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

abovethecrowd.com

FEBRUARY 24, 2015

Over the last few years, the late-stage (pre-IPO) market has become the most competitive, the most crowded, and the frothiest of these financing stages. An unprecedented 80 private companies have raised financings at valuations over $1B in the last few years. You must subtract it from your top-line revenue.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Professor VC

JULY 25, 2013

In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc. Well, those 3 weeks came and went, and they decided they weren''t sure about the market and needed to get other partners in the firm on board.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. If you’re confident you’ll get a huge exit, maybe.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

Both Sides of the Table

FEBRUARY 14, 2016

I recently survey more than 150 VC friends from all stages and geographies what they thought about the market by asking “Which of the following statements best describes your mood heading into 2016?” ” “Mark has a vested interest in talking down valuations of startups.” What is the True Sentiment of VCs?

Valuation 150

Valuation Down Round Startup Later Stage 150

The Equity Kicker

DECEMBER 30, 2013

Another example of optionality is cash held by a disciplined patient value investor with the temperament to not buy until Mr. Market is fearful. Seth Klarman, Howard Marks and other value investors use dry powder in the form of cash to harvest optionality since Mr. Market is bi-polar. Most venture capitalists employ this strategy.”.

Finance 129

Finance Liquidation Preference Valuation Harvest 129

www.paulgraham.com

APRIL 28, 2010

When youhear people talking about a successful angel investor, theyre notsaying "He got a 4x liquidation preference." 2 ] When you negotiate terms with a startup, there are two numbers youcare about: how much money youre putting in, and the valuation ofthe company. The valuation determines how much stock you get.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Austin Startup

APRIL 1, 2017

They’ll focus on high-level issues like valuation, liquidation preference, and board composition (# of seats), and then prematurely check out once a term sheet is signed. The wrong way to define “independent” is simply as “not an investor or employee.” And, broadly speaking, that is correct.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

Up and Running

MARCH 29, 2017

I focused on the product—making something better than anything else available on the market. I hired an employee who had B2B SaaS marketing experience, and he worked on getting users while I worked on building new features that would convince them to stick around.

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60