Both Sides of the Table

FEBRUARY 23, 2015

But not everybody has the right skills to build a highly successful and valuable startup from scratch. For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.”

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and a critical step in the development of their business. Tip 2: Have a "real" lead.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. Was Paul Graham right in his “high resolution” financing post? Some thoughts on raising angel money. That’s right.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

APRIL 14, 2010

It’s meant to be a bit provocative but the reality is that I give this advice to entrepreneurs all the the time and I usually leave the “e&# off of the end. I normally offer this advice in the capacity of really wanting to help entrepreneurs so please bear with me. Let’s say the company had raised $15 million.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. And, rather than rational and helpful thoughts for entrepreneurs, it often brings out the schadenfreude in even the most talented people. We entrepreneurs have been spinning that line for decades in every boom cycle. It’s simply not true.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Altgate

DECEMBER 15, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← No one wants to tell you your baby is ugly More on Liquidation Preferences → Pre-Money Valuation vs Number of Founders Posted on December 15, 2010 by admin Here’s a chart of the day worth sharing.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

Startup Professionals Musings

JANUARY 27, 2012

Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received. It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Liquidation preference.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

Startup Professionals Musings

SEPTEMBER 14, 2010

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Liquidation preference.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.readwriteweb.com

DECEMBER 29, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and is a critical step in the development of their business. Tip 2: Have A Real Lead.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. These entrepreneurs want to maintain two major options: 1) To raise VC later (or not), and/or. But you also can’t run the company forever, since investors need a liquidity event. Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

genylabs.typepad.com

SEPTEMBER 24, 2011

The Changing Face of Entrepreneurs. The Connected World of Entrepreneurs. Entrepreneur Magazine Blog. Planning, Startups, Stories. where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have. immigrant entrepreneurs. Categories.

Equity 40

Equity Technical Review San Jose Stock 40

Growthink Blog

MAY 23, 2011

The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1. An entrepreneur starts a company in classic " bootstrap " fashion - with a combination of sweat equity and their own financial resources. All live happily ever after. It all sounds wonderful and it is.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

SoCal CTO

JULY 13, 2010

Some great content around the intersection of startups and being a Startup CTO in June this year. This continues my series of posts: Top 29 Startup Posts May 2010 Startup CTO Top 30 Posts for April 16 Great Startup Posts from March There was some really great content in June. liquidation preference.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

K9 Ventures

JUNE 5, 2015

So while the infrastructure cost and startup costs may have declined, the operating costs have increased. In that presentation, I said that Seed is not the first round of financing any more and that K9’s investments were mostly “pre-seed”. Well, enter the Pre-Seed round, where the startup raises closer to $500K.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

techcrunch.com

FEBRUARY 25, 2010

This is an anonymous guest post from a well known startup executive: When we split the atom, Einstein remarked that everything changed but our way of thinking. As Mark Suster recently noted , employees will never see a big payday at most startups unless the company shoots for the moon. Otherwise, nobody will want to work for a startup.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Both Sides of the Table

SEPTEMBER 6, 2010

But if you’re the CEO who is spinning up a story about how the options for non-founders, non-VPs is going to be worth a lot some day then you’re probably doing some young entrepreneur a disservice at your expense.** And when they figure it out some day they’re not likely to be very loyal moving forward.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Scott Edward Walker

AUGUST 31, 2011

Introduction This post was originally part of the “ Ask the Attorney ” series which I am writing for VentureBeat (one of my favorite websites for entrepreneurs). Thanks, Scott Question We’re a startup based in Palo Alto, and we just received a Series A term sheet for a $725,000 investment. Any advice would be appreciated.

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

Spencer Fry

APRIL 17, 2017

As a startup in 2017, having limited resources can in and of itself sink your entire ship. There are so many people, products, and startups that are vying for their attention, that it’s harder than ever to rise above the noise. But as an early stage startup, accountability is so important. More respect from other entrepreneurs.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Scott Edward Walker

JULY 27, 2011

There is, however, another set of rights with which many entrepreneurs may not be familiar: State law rights. These are rights granted to stockholders pursuant to the respective laws of the company’s State of incorporation and are often the only rights that minority common stockholders have.

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. I just worked on a financing for a company that received a term sheet from a group of VCs at a $7 million pre-money valuation. Home About Matt Client references Contact. A View from the Valley. — 23 Comments.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Both Sides of the Table

SEPTEMBER 8, 2012

I recently wrote about my views that startups rounds should be priced. If you do a capped note it’s bad for the entrepreneur. It has both a “full rachet” and “multiple liquidation preferences.” They share in liquidation preferences pari passu and they vote as a single class.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

Professor VC

JULY 25, 2013

This is the feeling you get from watching the venture capitalists talk about the entrepreneurs and other investors in the film. 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. Startup outcomes tend to be very binary.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

The Equity Kicker

DECEMBER 30, 2013

Nassim Taleb is one of the most visionary thinkers in modern finance. Interestingly though, I think things end up looking pretty similar for the entrepreneur. In this case the investment is largely in the form of time committed to the startup, and hence the downside is the time lost to other opportunities.

Finance 129

Finance Liquidation Preference Valuation Harvest 129

abovethecrowd.com

FEBRUARY 24, 2015

Historically, different financial institutions specialized in different stages, because the assessment of risk and opportunity was considered unique at each stage — for example, a seed investor was unlikely to do late-stage financing, and vice versa. These liquidation preferences give the investor a debt-like downside protection.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. Both the entrepreneur and the investor have much higher expectations than just "even money" on their bet. 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

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. Most individual VCs can only support about 7–10 companies at a time.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. 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.”

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

I’d like to explain as best I can my opinion on what is going on because most of what I hear from entrepreneurs is not only wrong but is reminiscent of what I heard in 1997-2000. ” “This will be great for VCs and bad for entrepreneurs.” What is the True Sentiment of VCs? ” “Sure, prices are dropping.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

One Million by One Million is a global initiative that aims to nurture a million entrepreneurs reach a million dollars each in annual revenue and beyond by 2020, thereby creating a trillion dollars in global GDP and ten million jobs. SM: In September 2008, when the first Entrepreneur Journeys book was released, D.D.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116