Both Sides of the Table

AUGUST 30, 2010

Convertible debt is an investment that “converts&# into equity in the future usually at a discount to your next funding round price and sometimes has a “cap&# (maximum price). prefer equity to convertible debt): If you’re an early stage investor (e.g. Tags: Raising Venture Capital Startup Advice.

Equity 319

Equity Early Stage Angel Investor Valuation 319

Both Sides of the Table

OCTOBER 11, 2009

They are usually offered around 0.25% of the companies equity in exchange for their role and I’ve seen many companies hand out a total of 2% to advisers. My main advice to you if you’re considering it is don’t waste much equity on it. Using this approach you may be able to get a few key advisers with no equity at all.

Advisory Board 306

Advisory Board Startup Equity Valuation 306

Both Sides of the Table

APRIL 14, 2010

If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. Tags: Entrepreneur Advice Raising Venture Capital Start-up Advice Startup Advice.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

MAY 28, 2018

A VC wants to know that you have a solid plan to execute a stand-alone business and if you require capital for an acquisition they’d rather evaluate it at the time rather than over-fund you now. This part of a series to help you raise venture capital ?—?the Summary Raising money is a daunting process.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

SEPTEMBER 10, 2021

how on Earth could the venture capital market stand still? One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued? What Does this Mean for a Venture Capital Firm?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

AUGUST 12, 2010

In the VC & Private Equity world there’s a small number, too, with one of the most respected being PEHub. But there are also going to be those companies that require capex and growth equity (Zynga, Facebook, etc). Tags: This Week in Venture Capital. That’s thanks to Dan Primack , founding editor.

Seed Stage 232

Seed Stage Valuation Private Equity Venture Capital 232

Both Sides of the Table

OCTOBER 1, 2009

We spent our future since the equity was artificial. It’s my job to invest wisely in entrepreneurs who are capital efficient, who innovate in ways that pay off economically in good markets or bad and who plan for worst-case scenarios. Consumer spending is where I’m dubious. So why the ’09 bounce? See point 2 below.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Both Sides of the Table

JULY 12, 2011

This week I sat down with Chris Dixon, co-founder / CEO of Hunch and Partner at Founder Collective in the most recent installment of This Week in Venture Capital. If you like the quick summary notes, please check out Adam’s blog on tech, entrepreneurship & VC as a thank you.

Technical Review 281

Technical Review Artificial Inteligence Cofounder API 281

Both Sides of the Table

JULY 16, 2010

One is the “denominator problem&# which says that if an LP invests X% (the denominator) into “alternative investments&# such as venture capital and if their total amount available to invest (the numerator) goes down by 30% then the amount they allocate to VC will by definition need to go down by 30% to stay the same percentage.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

SEPTEMBER 29, 2013

If you track the venture capital industry it would be hard to miss the conversation going on this week over AngelList “Syndicates.” Of course the same goes with traditional VCs. We of course have Naval to thank for helping to innovate in our industry.

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

Both Sides of the Table

SEPTEMBER 28, 2014

So money spent should add equity value or create IP that eventually will. On the other hand, exits at lower prices are easier with these providers of capital. If you have raised venture capital and you feel your runway (number of months cash left) is looking low have a conversation with your VC.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

JUNE 22, 2011

I guess that makes USV, Spark Capital, Foundry Group, Accel, Benchmark, Revolution (along with several others) pretty happy right now. It’s what I love about entrepreneurship and about venture capital. And well they should be. And so on down then line. Why I will still be investing.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

MAY 19, 2010

Our guest this week on #TWiVC was Dana Settle , partner at Greycroft Partners , a venture capital firm with offices in New York and Los Angeles. It’s always fun debating companies with Dana because she’s always so knowledgeable on deals – particularly those in the digital media, ad-tech and eCommerce spaces.

Partner 240

Partner New York City Cofounder Syndicate 240

Both Sides of the Table

JULY 15, 2010

Convertible debt is a loan to the company that doesn’t typically get paid back but rather “converts&# into equity when you raise a larger round at a later date. What advice do you have for people who want to get into venture capital? I talk in the video about the economics of venture capital and how we make money.

Southern California 210

Southern California Venture Capital Seed Stage Angel Investor 210

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

JULY 10, 2010

This episode of This Week in Venture Capital featured Michael Montgomery, president of Montgomery & Co. You have to be selected to present and it is typically reserved for companies that have already raised early-stage capital and are well into revenue growth. Should you use investment banks to raise venture capital?

IPO 242

IPO Venture Capital Private Placement Cofounder 242

Both Sides of the Table

DECEMBER 17, 2012

I would gladly part with equity (actually, I have) to work with people like her on deals. VENTURE CAPITAL. And finally that brings me to obvious topic of venture capital. And she doesn’t always charge what she should. After I posted I saw the following Tweet. No exceptions.” ” Love that.

Startup 363

Startup PR Venture Capital Angel Investor 363

Both Sides of the Table

OCTOBER 17, 2019

Just as I was getting the swing of things the world shifted beneath my feet and the stock market went into a free fall and venture capital all but shut down for nearly a year. It proved to be fortuitous because it allowed me the time & space I needed to get to know tons of founders and VCs and to hone my craft.

IP 223

IP Intellectual Property IRR Cofounder 223

Both Sides of the Table

MARCH 11, 2010

This is part of my ongoing series on Raising Venture Capital. Recently I’ve been debating with a number of young startup companies that are raising money in the next few months, “what is the right about of capital to raise at a startup?&#. It’s a tricky question with no clear answer. There are trade offs.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Both Sides of the Table

SEPTEMBER 12, 2010

Many of the growth equity firms have had outbound dialing programs for years. Growth equity firms typically target profitable businesses that are often not technical in nature. Perhaps outbound dialing / emailing programs worked well for growth equity firms in their core business. These kind of companies were seldom startups.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Both Sides of the Table

JUNE 29, 2011

Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself. And of course hedge funds and growth-equity funds can’t resist trying to get earlier-stage exposure again. This led to an explosion in startups.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Both Sides of the Table

APRIL 19, 2011

If you need money to even hire a developer [means you cannot even excite one person to put in some sweat equity – not a good sign about your ability to motivate people.]. Passion is infectious – people respond to it. Confidence is good, cockiness is not. •

Acquisition 304

Acquisition Warrant Customer Term Sheet 304

Both Sides of the Table

NOVEMBER 11, 2013

I often advise startup companies not to try and pin all of your brand equity into an announcement. Over the next few weeks I’m going to release a few posts on what we believe platform services are and why we believe they’re an important part of the future of venture capital. *. A brand is a marathon, not a sprint.

Ireland 324

Ireland Jordan Portfolio Flash 324

Both Sides of the Table

OCTOBER 14, 2015

One of the points I tried to make is that as venture capital investors as an industry we seem to have a healthy disdain for public market investors. The truth is that the brutal reality of public markets is that they self correct much more quickly than our shitty little private equity illiquid corner of the universe.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Both Sides of the Table

JANUARY 1, 2016

We’re a national venture capital investment firm but with our roots firmly in Los Angeles. You don’t have unlimited equity to dole out. We try to be transparent and direct in our communications and behaviors. WYSIWYG (what you see is what you get). We can be blunt but we believe that builds healthier relationships.

Leadership 150

Leadership Southern California San Diego Hiring 150

Both Sides of the Table

MARCH 17, 2010

Funding is different – In Silicon Valley you have mega venture capital funds and many of them. Side note: LA seems to have had some success in mega deals led by private equity firms as evidenced by DemandMedia and Chris DeWolf’s latest company backed by more than $20 million in private equity.

Silicon Valley 290

Silicon Valley Technology Los Angeles Southern California 290

Both Sides of the Table

DECEMBER 1, 2009

I advocate treating them like a co-founder in every way except when they join and how much equity they get. Once it’s set up I recommend bringing in a co-founder and giving them 10-30% of the company depending upon when you bring them in. For me 3+ is usually a non starter.

Hiring 289

Hiring Cofounder Dilution Startup 289

Both Sides of the Table

MARCH 21, 2010

I’ve heard the following so many times that it still makes me scratch my head, “if those guys are going to get rich off of our backs then we’re going to look like fools if we don’t have equity.&#. I’ve already made clear that I think raising equity from “strategic money&# is an oxymoron.

Warrant 298

Warrant Dilution Startup Stock Options 298

Both Sides of the Table

MAY 5, 2011

When you think about the success that is Silicon Valley, the unfair advantage is not just the huge amounts of available venture capital. A key deal not only helps you raise venture capital but it can help attract employees, garner press attention, help with product focus & importantly drive customer adoption and/or revenue.

Seattle 317

Seattle Silicon Valley Technical Review Los Angeles 317

Both Sides of the Table

OCTOBER 14, 2009

It’s just that many companies waste equity on advisory boards, pick the wrong advisers or set up advisory boards with the wrong expectations. Tags: Start-up Advice startup technology vc venture capital. I wrote recently about the role of Advisory Boards in startups , which I expected to be a bit controversial.

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

Both Sides of the Table

APRIL 25, 2011

This thinking is largely driven by the venture capital industry (and subsequently Wall Street) who are in search of high margin, highly scalable businesses. I gave them advice I don’t think they were expecting from a VC, “Don’t raise venture capital for this business. This team is talented.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

APRIL 14, 2012

You’ve found yourself in a super hot category and – let’s face it – it’s still a very frothy venture capital funding market so you may have loads of VCs chasing you. You are either bought for stock or for equity. Let’s say your company is currently valued at $15 million. Think about it.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Both Sides of the Table

MAY 13, 2018

For simplicity I’ll assume you’ve raised some money from angels or seed investors and you’re either raising an A round or a B round of venture capital. Summary Fund-raising is a sales & marketing process in which the buyer is a VC and the product is equity in your company. these are simply guidelines.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Both Sides of the Table

AUGUST 24, 2015

I’m not saying I’m not investing – just that I’m generally aware that the market does drive venture capital fundings and I’m very interested to see how September plays out. But I do know the world will be watching so I’m personally feeling cautious until I see how that all plays out.

Stock 150

Stock Finance Marketing Valuation 150

Both Sides of the Table

MAY 15, 2010

Next Wednesday we’ll have Dana Settle of Greycroft Partners, a New York / LA early-stage venture capital fund. But when the finally convert the debt to equity the round gets filed with the SEC and thus journalists often pick up on it. They also avoid Reg D.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

Both Sides of the Table

SEPTEMBER 2, 2009

Tags: Pitching VCs Start-up Advice VC Industry startup technology vc venture capital.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Both Sides of the Table

MARCH 3, 2013

Venture Capital. He talked about a unique model where you don’t have to become liquid in venture capital and can target singles & doubles. New company in Boston with a model called “royalty capital.” ” Money is not debt or equity but a “license to use their capital.”

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403