ReadWriteStart

JULY 21, 2011

When we were trying to raise money for E.piphany, my last startup, I was negotiating with a venture capital firm called Infinity Capital. They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation.

Post-Money Valuation 122

Post-Money Valuation Valuation IPO Venture Capital 122

Both Sides of the Table

OCTOBER 12, 2014

” If you invested at $8m pre-money and put $2m in (thus you own 20% of a company at a $10m post-money valuation) and if you put another $2m into a round at a $40m valuation raising $10m ($50m post) you end up with half your money at $8m pre and half at $40m pre thus your average price goes up dramatically.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Both Sides of the Table

JULY 25, 2010

Any SoCal entrepreneur raising early-stage money should put Rincon on their short list. He covers this is the first 15 minutes or so of the video and he’s awesome to listen to (more than 25,000 people have listend to this video so far – mostly entrepreneurs ;-)). It is how angel rounds come together.&#.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Both Sides of the Table

MAY 13, 2013

And a few teams of super talented, educated and bright entrepreneurs make a few mill. It has even gone so far that we now have evocative headlines in the tech press such as “ Buy or Die ,” which is what got me thinking about this post. Acquihires and Venture Capital. in their 20′s. I’m a VC.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference. read more.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? 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. On the phone ….

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

NOVEMBER 4, 2009

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X&# or not. 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

Feld Thoughts

FEBRUARY 9, 2016

And, rather than rational and helpful thoughts for entrepreneurs, it often brings out the schadenfreude in even the most talented people. Mark’s post is one of the first in this cycle that I’ve seen from a VC giving clear, actionable advice. We entrepreneurs have been spinning that line for decades in every boom cycle.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Both Sides of the Table

AUGUST 1, 2010

Many (Union Square Ventures, Foundry Group, True Ventures, GRP Partners, Mike Hirshland at Polaris Ventures) do it the right way – we treat it as a normal investment and we don’t have a “options&# strategy with our investment. Many firms do it in a way that can be more detrimental to entrepreneurs.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Feld Thoughts

JUNE 2, 2015

The other day, Mark Suster wrote a critically important post titled One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes. There are also some law firms whose standard documents are purposefully ambiguous to give the entrepreneur theoretical negotiating flexibility in the first priced round.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Seeing Both Sides

JULY 15, 2009

A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). Thus, the universe of financings that even the most experienced entrepreneurs get directly exposed to is typically 5-10 financings over a 15-20 year career. What is the promote?

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

The Next Web

DECEMBER 30, 2012

If you’re a startup, you are by definition competing with the smartest people in the world – either large companies with more resources than yours or fellow entrepreneurs who are hoping to disrupt large companies. Raising money for a startup from an angel investor : Learn pre-money and post-money valuations are.

Artificial Inteligence 156

Artificial Inteligence Founder Private Equity Ruby 156

thestartuplawyer.com

FEBRUARY 24, 2010

Entrepreneurs often believe their startup company faces legal threats from only external sources. Even so, I believe the negative experience can end up producing a better entrepreneur if he or she applies lessons learned to current and future startups. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. So they recapitalize the company. Sure – it happens.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Board Effect

MAY 10, 2019

Cap tables come into play when it comes time for a startup to raise capital. Most entrepreneurs enter into investor negotiations with an assessment of what their business is worth, the percentage of ownership they’re willing offer, and the amount they’re seeking in return.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40