Both Sides of the Table

JUNE 22, 2011

In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. million pre-money valuation is now raising $1 million at a $12 million valuation the next investor has nowhere to go but up (or sit out the investment).

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

SEPTEMBER 22, 2012

After all, growth equals high valuations and loads of venture capital! Instant growth = huge valuation from follow-on investors = big VC mark-up on our quarterly reports = LP interest. Startups will continue to be aggressive in spamming us in our Facebook timeline. And headlines. And approbation. Grow or die. million and then $5.9

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Startup Professionals Musings

JUNE 5, 2021

In finance, a bubble is too much money chasing assets, greater asset production and a herd mentality. In startup business plans, a bubble is too many entrepreneurs and too many investors chasing the latest “next big thing,” like Google search engine, Facebook social network, or Amazon e-commerce site. High valuation, low profit.

Demand 362

Demand Government Venture Capital Valuation 362

YoungUpstarts

MAY 14, 2018

Think of financing an acquisition as an exercise with two parts that work in concert: 1) structuring a desired deal with a suitable target and 2) obtaining the funding. A desired deal is one that is engineered specifically with the big picture in mind. And, namely, they pique the interests of those in the private capital markets.

Acquisition 109

Acquisition Finance Raleigh Mezzanine 109

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

View from Seed

MARCH 24, 2021

What Are Your Valuation Expectations? But mainly we did it because these corporate VCs were among the only groups willing to invest at PayPal’s somewhat inflated post-money valuation, during the middle of the dot-com crash when traditional VCs pulled back sharply and other sources of funding were constrained.” ” (Rob Go).

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

VC Cafe

JANUARY 2, 2023

On a global level, venture financing of private companies dropped 33% year over year, from a record $733B in 2021 to $490B in 2022. While 7,838 tech jobs were lost across 120 companies in 2022, according to an analysis by Tech12 , the demand for engineers remained high with 13,100 open engineering roles. Source: Vintage ).

Valuation 158

Valuation Down Round Venture Capital 158

Both Sides of the Table

NOVEMBER 14, 2017

what your product & engineering thought they cared about and you adapt your offering. We have well financed competitors whom despite competing with we respect deeply and when you see your competition launching in many markets it’s tempting to follow suit.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

MARCH 21, 2013

Often your sales engineers can do the customizations without bugging the core eng team. The closest analogy I have for a PS person is a “sales engineer” who is normally a technical staff member who assists in sales campaigns. By year 2 I’d like to see PS at 50% maximum, which is still high.

Software Review 321

Software Review Software IP Technical Review 321

Steve Blank

OCTOBER 24, 2017

A CEO brought in from a large company came with all the big company accoutrements – org charts, HR departments with formal processes and procedure handbooks, formal waterfall engineering methodology, sales compensation plans, etc. A 20th century VC was likely to have an MBA or finance background. 4. Founder-friendly VCs.

Founder 245

Founder Technical Review CTO Hire IPO 245

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. Sustaining short-term losses is all predicated on ability to finance the losses through venture capital or other means.

Metrics 150

Metrics Cost Acquisition Startup 150

Steve Blank

AUGUST 19, 2013

The last 60 years has seen remarkable breakthroughs in what we know about the biology underlying diseases and the science and engineering of developing commercial drug development and medical devices that improve and save lives. It was the best of times and the worst of times. For exits, acquisitions are the rule and IPOs the exception.

Venture Capital 301

Venture Capital Startup Lean Philadelphia 301

Reid Hoffman

JULY 27, 2021

In the startup world, one of the most important parts of building a network for non-technical entrepreneurs is getting to know brilliant engineers and technologists. In particular, Bill Sahlman’s Entrepreneurial Finance course was excellent. For example, MBA students take classes on accounting and finance.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Reid Hoffman

JULY 27, 2021

In the startup world, one of the most important parts of building a network for non-technical entrepreneurs is getting to know brilliant engineers and technologists. In particular, Bill Sahlman’s Entrepreneurial Finance course was excellent. For example, MBA students take classes on accounting and finance.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Startup Professionals Musings

OCTOBER 19, 2015

That’s why I recommend that they find a co-founder who loves business challenges, including marketing and finance. I usually envision a 50-50 ownership split for their efforts, but every engineer believes the technology side deserves the majority share. Patents are not worth the effort, since big companies will win.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

Both Sides of the Table

AUGUST 14, 2009

I recently wrote a post on angel financing covering the topic of convertible notes but I realized I was thinking about the issue more from investor perspective and a very narrow topic of how to price the round. So if you’re casually reading and don’t really care about angel financing – abort now! It creeps people out.

Silicon Valley 291

Silicon Valley Ireland Technical Review Valuation 291

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Series Seed Financing Documents. Listed below are links to weblogs that reference Series Seed Financing Documents : 1 Reblog. Sets the valuation at the time of the investment. My quest is to simplify financing for seed stage investments. Series Seed Financing Documents.

Finance 40

Finance Term Sheet Vesting LLC 40

techcrunch.com

SEPTEMBER 2, 2012

As a refresher, a convertible note is a loan that automatically converts into equity upon the closing of a Series A round of financing. Sometimes these loans have a valuation cap and/or a discount. The point, he says, is to avoid time-consuming valuation negotiations and allowing a variable amount of capital to be raised.

Equity 87

Equity San Francisco Technical Review Angel Investor 87

Steve Blank

MAY 9, 2017

A 20 th century VC was likely to have an MBA or finance background. Their need to get into high-profile deals has driven late-stage valuations into unicorn territory. When James Watt started the industrial revolution with the steam engine in 1775 no one said, “This is the day everything changes.” Where is it going?

Restful 222

Restful Silicon Valley Puerto Rico San Jose 222

Steve Blank

FEBRUARY 26, 2020

Btw, the definition of each startup financing stage has changed in the last decade. At the end of this post, we’ll discuss the valuation at each step (how much the investors value your company and therefore how much of it you need to give up to get this money) and how much revenue you should generate at each step.). Valuations.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Feld Thoughts

NOVEMBER 18, 2013

Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing. There is no discussion of burn, runway, and more financing yet.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Mucker Lab

MAY 28, 2020

These lost startups land higher valuations, have larger teams, outsource more product development and spend more money on customer acquisition than their peers. Until you have product-market fit, hire builders: engineers, designers, and growth and product people. Honestly, we don’t know.”? Be trigger shy about hiring.

Startup 78

Startup Cofounder Burn Rate Technical Review 78

ReadWriteStart

SEPTEMBER 10, 2010

I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though). In 1M/1M, our preferred financing strategy is customers. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

www.entrepreneur.com

SEPTEMBER 22, 2011

Entrepreneur Homepage Startups Starting a Business Home How-To Guides Startup Basics Business Ideas Business Planning Startup Financing Success Stories Home-Based Business Starting a Business Play Video How to Take a New Product from Just an Idea to a Business (Video). Financing Some Jobs Act Proposals Make Headway.

Sweat Equity 55

Sweat Equity Equity Fractional CTO CTO 55

Version One Ventures

OCTOBER 15, 2020

Let’s now explore the major developments and ultimate use cases for the Lightning Network in two categories: A) payments/finance and B) Web3. . Use Case I: Payments and Finance . When they can invest the marginal engineering hour in listing a new token that drives revenue vs. saving some costs on settlement, it’s hard to justify.

Networking 168

Networking Global OTC Security 168

Version One Ventures

DECEMBER 14, 2016

In other words, any correction in public valuations happened quickly and has now stabilized. From Series A and onwards, fundraising takes longer and valuations are typically below the expectations and benchmarks of 2015. We expect that the financing scene in 2017 will look very similar to 2016. for the last two years.

Technical Review 60

Technical Review Early Stage Portfolio Valuation 60

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. ff Venture Capital hired two full-time engineers to build out Totem. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

VC Cafe

NOVEMBER 30, 2022

Notable companies in the landscape include: Improbable – the simulation engine company, famously building Otherside, the virtual world by Yuga Labs (owners of the Bored Ape Yacht Club), which most recently raised $100 million at $3 billion valuation. Access to finance and skills remain the key barriers to industry growth.

Startup 122

Startup Generative AI Venture Capital Valuation 122

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

YoungUpstarts

MAY 17, 2019

Sales, engineering, and operations are typically critical areas. The risk: You base your purchase price, valuation, loans, and cash forecast off historical financials, only to find out a few months into owning the business that the numbers were all wrong and you are losing cash. Risk 3: Running out of cash.

Due Diligence 163

Due Diligence Forecast Deal Structure Valuation 163

David Teten

MARCH 18, 2021

Valuation: $1M – $3M. But you must be doing real engineering of some kind. Revenue-Based Finance and Flexible VC investors invest using “alternative VC” structures, as opposed to conventional preferred equity and convertible notes. Total Round Size: $50K – $500K. Occasional exceptions to $1M.).

Technical Review 78

Technical Review Cofounder Venture Capital Deal Flow 78

www.avc.com

SEPTEMBER 22, 2011

This is NOT your 409a valuation (we call that "fair value"). This "best value" can be the valuation on the last round of financing. Whatever approach you use, it should be the value of your company that you would sell or finance your business at right now. Or it can be a public market comp analysis.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Duct Tape Marketing

FEBRUARY 3, 2022

So, you know, I, I have kids that are in their thirties and I'm envisioning a purple dinosaur that I did a a lot of watching with, but I guess there's also Smith Barney, which is certainly in the finance space, but I'm sure you have and Barney. Amanda Dixon (01:29): The store. John Jantsch (01:29): Oh, right, right, right.

Entrepreneur 79

Entrepreneur Technical Review Cofounder Valuation 79

ReadWriteStart

MARCH 24, 2011

The discussion today was around Social Media financing and go-to-market strategy. Additional work in figuring out the precise go-to-market consumer, academic institution, or enterprise - each is a different business), and consequent business model and pricing model will help enhance the company's valuation. Photo by nazreth.

Illinois 114

Illinois Entrepreneur Silicon Valley Chicago 114

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. In the old days VCs funded off of a “pre-money” valuation. It’s very simple.

Pre-Money Valuation 150

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