Lightspeed Venture Partners

OCTOBER 7, 2012

The company has done $400k in sales in less than two years and had an early test deal with a local supermarket chain that they were massively overperforming on. He had been at it for 6 months and had no sales or distribution lined up yet. In this way, they remind me of the Lifter Hamper entrepreneur. Fair enough too.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Startup Professionals Musings

NOVEMBER 26, 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?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Austin Startup

JUNE 21, 2018

It will revolutionize produce sales globally. Our pre-money valuation for the seed round is 2 trillion dollars.” Now, if you’re a crypto entrepreneur, you still have to abide by the basic rules of good startups (link shamelessly inserted if you missed it before). By: Joe Merrill, Partner at Sputnik ATX.

Securities and Exchange Commission 61

Securities and Exchange Commission SEC Pre-Money Valuation Security 61

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?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. One: The entrepreneur. First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. That risk deserves reward if there is a profitable sale or even an initial public offering, rare as that event is.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Both Sides of the Table

SEPTEMBER 29, 2009

But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. It is no wonder why they had less time for new deals.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

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?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, playing coy, or quoting an exorbitant number.

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?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Here’s the “what.”. And here’s the “why.”.

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

Both Sides of the Table

FEBRUARY 17, 2011

A year ago I blogged about one of my most common mantras that applies to sales, biz dev & fund raising alike: “ Time is the Enemy of all Deals.&#. When times are really good for fund raising many teams delay to maximize their valuation. 5 million raised at a $9 million pre-money valuation or 35.7%

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. Entrepreneurs, business owners, senior managers at large corporations. What could be improved?

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations. 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

Lightspeed Venture Partners

NOVEMBER 19, 2012

They talked about a referral program, as well as direct sales. The next two entrepreneurs run a wine tasting cruise business. The company did $250,000 in sales last year and is profitable. Much of the money went into buying inventory, and a founder with around 40% owernship is still highly motivated to see the company succeed.

Pre-Money Valuation 163

Pre-Money Valuation Alabama Valuation Churn Rate 163

Lightspeed Venture Partners

OCTOBER 1, 2012

The company did $1M in sales last year, 90% from wholesale, and had a 10% profit margin. They wanted to get to $10M in sales and then get bought by a big food company. pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation.

Pre-Money Valuation 155

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 155

Berkonomics

SEPTEMBER 27, 2018

Offering to reincorporate the game company as a new entity to avoid any more surprises, the entrepreneur and I negotiated 10% for my $100 thousand, with the remaining 90% for the founder. Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Recovery and success.

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. I see it happen often in my angel investment group, and you can see it happen almost every week on the Shark Tank TV show.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). The sharks greeted this with skepticism, and rightfully so, especially given the short time the company has been in business and the relatively low sales volume.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. The cap is irrelevant if the next equity financing is at a valuation below the cap amount.) was spun out, and the valuation was set by that financing round.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Berkonomics

JUNE 12, 2014

First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. Few entrepreneurs can do it alone, with subordinate hired help and no expert management to share the burdens, skill sets and efforts involved in growing the enterprise. Starting up Raising money Surrounding yourself with talent'

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 million and is established by negotiations between the entrepreneur and the angel investors. Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). The liquidation preference means what is sounds - namely that preferred stock holders with this right get all of their money back (i.e. This is obviously a big, big difference to both the entrepreneur and the investor.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Berkonomics

SEPTEMBER 17, 2011

Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Three months later, another investor company in the business offered to invest $3 million at a valuation of $60 million. In addition, I loaned the new company $150 thousand for working capital.

Liquidity Event 59

Liquidity Event Pre-Money Valuation Sales Valuation 59

K9 Ventures

MARCH 23, 2011

Obviously, both the founders and the note holders have the common objective of getting the company funded; but assuming the company is fundable, there is a basic misalignment of incentives when it comes to valuation. The typical fix for this problem is to put in a cap in the note for the pre-money price for conversion.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Seeing Both Sides

JULY 15, 2009

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. Year in, year out, Thus, VCs and entrepreneurs are not operating on an equal playing field when it comes to negotiating financings and interpreting the impact of the terms involved.

Pre-Money Valuation 49

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

This is going to be BIG.

MARCH 23, 2015

They''re at a similar stage to my investments now out of Brooklyn Bridge backing Tinybop pre-launch, Canary before their Indiegogo pre-sale, and VIXXENN with just an alpha site and a few stylists. It''s so much easier to blame those stingy Series A guys as to why your startup isn''t getting funded.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

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. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

VC Cafe

SEPTEMBER 26, 2022

The past year was a wild ride for startups and founders, giving a whole new meaning to the ”rollercoaster” aspect of being an entrepreneur. Sustainable growth: Prioritise sales efficiency over growth at all costs. ValuatIon should be a function of value, not ego. What should we keep and what should we change? subtract $250,000.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Both Sides of the Table

FEBRUARY 25, 2010

A reminder that it is important for all entrepreneurs is to remember to be careful about “deal drift.” I think the perfect saying to have as a reminder is “time is the enemy of all deals,” or as my wife is all too tired of hearing me say, “Don’t pop the champagne until the ink is dry on the contract and the money is in the bank.”.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Scott Edward Walker

APRIL 9, 2012

When investors receive shares of preferred stock, they are typically granted certain significant control rights, including a Board seat and veto rights with respect to certain corporate actions (such as the sale of the company) pursuant to so-called “ protective provisions.”

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

crowdSPRING Blog

APRIL 26, 2013

Don’t Use Social to Generate Sales; Make Selling Social | Advertising Age – [link]. Don’t Use Social to Generate Sales; Make Selling Social | Advertising Age – [link]. Q1 Venture Capital Spending & Number Of Deals Down, M&A Activity Drops 44 Percent And Pre-Money Valuations Plummet – [link].

Social Media 90

Social Media Small Business Design Media 90

Both Sides of the Table

SEPTEMBER 8, 2012

If you do a capped note it’s bad for the entrepreneur. Fred, who also wrote his views about convertible debt (significantly more succinctly than I) believes that the price of a single round should be the same for everybody. ” If you remember the three rules of sales : it’s. million pre-money.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. Or even doing pre-sales or lead generation well before having a product. And there’s a huge difference in valuation.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. Or even doing pre-sales or lead generation well before having a product. And there’s a huge difference in valuation.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. The right number to focus on is pre money valuation as that is how an investor is valuing the company before the investment. Post money valuation = Pre money valuation + Investment.

Pre-Money Valuation 160

Pre-Money Valuation Post-Money Valuation Valuation Dilution 160