Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? On the one hand, you’re over paying for every investment and valuations aren’t rational. even before the pandemic itself has been fully tamed.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

NOVEMBER 14, 2017

As a startup in this phase you often raise capital, get press, hire staff and everything feels possible. I always push companies to hire “an operationally focused CFO” during this phase because in order to systematize you need somebody who brings economic rigor to decision making. As an early-stage VC I love this phase.

Operations 286

Operations New York City Technical Review Startup 286

Tim Keane

MARCH 9, 2011

How should I finance my new venture? It’s a deceptively simple question:  what is the optimal way to finance a new startup? Misaligned interests that lead to poor financing choices are often very problematic for first time entrepreneurs in young companies.  « Leaving a Trail | Main. |

Finance 83

Finance Bootstrapping Startup Equity 83

YoungUpstarts

OCTOBER 28, 2015

This article highlights their advice on issues ranging from financing to patent trolls: While startups may believe lawyers are too costly, working with one early on avoids potentially serious problems later. “And if you have a valuation cap; a higher cap is always better than a lower cap.” ” The Cost of Financing.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

VC Adventure

AUGUST 15, 2018

However the board could determine what that fair market value was and, generally speaking, there wasn’t a practical way that these valuations could be challenged. Over night a cottage industry was created to conduct these valuations. So what should this discount be? I was wrong.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

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. And it launched this author’s career and taught me everything I know about sales, marketing, hiring, firing, fund raising and so on.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation? The timing will vary depending on the purpose.

Valuation 100

Valuation Stock Options CPA Merger 100

The Startup Magazine

AUGUST 15, 2022

The first step in creating a business plan to sell your startup to an acquirer is to create a valuation of your company. The valuation should include a business optimization plan that outlines strategies and tactics for growing transferable value, attracting potential buyers, and driving deal value. Finding a buyer.

Merger 130

Merger Acquisition Due Diligence Valuation 130

Startup Professionals Musings

APRIL 11, 2021

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. Many startups delay incorporation until the first formal round of financing, which is too late. Do the same for every business partner or employee you may hire.

Cost 363

Cost Non-Compete Accredited Investor Cofounder 363

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

Start Up Blog

MAY 28, 2020

Perception also informs finance. Uber has lost $38 billion since 2013 and yet still has a market valuation of around $60 billion. – Tesla $ valuation per car sold = $302k. – GM $ valuation per car = $5k. – Ford $ valuation per car sold = $17k. – Toyota $ valuation per car sold = $15k.

Valuation 48

Valuation Technical Review Singapore India 48

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. Hire the wrong people. Bad hiring decisions are often a symptom of premature scaling. Why hire a sales team when you have nothing to sell yet?

Startup 78

Startup Cofounder Burn Rate Technical Review 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. They close on the $750k, hire a buddy or two, buy some Macs, and get to work.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Both Sides of the Table

MAY 4, 2013

As an early-stage investor that is not always aligned with my goal, which I would express as, “pay the right price for the stage & risk in a way that is fair to the founders yet preserves our ability to grow into our valuation at the next financing event.” I normally advise “ Raising at the Top End of Normal.”

Deal Flow 347

Deal Flow Early Stage Investment Bankers Technical Review 347

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. What not to include is directly stating valuation expectations. The former can include expected burn and runway, guideposts on hiring, and resource allocation.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

Steve Blank

MARCH 31, 2014

Cheered on by finance professors, Wall Street analysts, investors and hedge funds, companies have learned how to make metrics like Internal Rate of Return look great by one; outsourcing everything, two, getting assets off their balance sheet, and three only investing in things that pay off fast. Rent seekers fight to keep the status quo.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Both Sides of the Table

MAY 4, 2013

As an early-stage investor that is not always aligned with my goal, which I would express as, “pay the right price for the stage & risk in a way that is fair to the founders yet preserves our ability to grow into our valuation at the next financing event.” To all my banking friends … I’m not a hater.

Early Stage 361

Early Stage Deal Flow Investment Bankers Technical Review 361

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! At what value?

Silicon Valley 291

Silicon Valley Ireland Technical Review Valuation 291

Up and Running

SEPTEMBER 19, 2017

They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

YoungUpstarts

JUNE 20, 2016

The switch from PDRs to VDRs resulted in deal cycles and increased valuations. This includes the cost incurred in purchasing papers, travelling and hiring related human resources. Accounting demands accurate audit trails that allow easy tracking of finances. The old PDRs were quite cumbersome due diligence processes. Accounting.

Software Review 100

Software Review Technical Review Due Diligence Security 100

Duct Tape Marketing

FEBRUARY 3, 2022

16:06] Does hiring an advisor also come with a team of legal and financial advisors? 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.

Entrepreneur 79

Entrepreneur Technical Review Cofounder Valuation 79

Both Sides of the Table

JANUARY 22, 2014

I’ve watched VCs help with valuation support (spreadsheets, comps) on next round financing, participate in M&A meetings, interview senior job candidates – even help terminate tricky senior hires. A VC isn’t an extended member of your team but they can be very helpful in spot situations.

Portfolio 364

Portfolio Chicago Sales Incubator 364

The Startup Magazine

JUNE 22, 2020

Another area that investors should look into is the valuation of the property. Many factors are dependent upon valuation, like taxation and the availability of financing. Having an overly high valuation means that taxes and insurance will be higher as well. Securing Financing.

Management 93

Management Valuation Finance Demand 93

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

View from Seed

MAY 31, 2019

Some of the founders in our portfolio have an exceptional ability to raise additional capital (and at loftier valuations) remarkably ahead of where the underlying metrics of the business current would yield. Some might argue that what goes up must come down. And yes, we’ve seen that reality must eventually catch up so that all facts sync.

Valuation 149

Valuation Portfolio Metrics Founder 149

David Teten

AUGUST 20, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. However, to raise RBI a woman founder does not need to promise a valuation of $1 billion within 5 years. Don’t hire people you know! Realistic projections. For further reading.

Revenue 60

Revenue Cofounder Founder Venture Capital 60

www.avc.com

SEPTEMBER 22, 2011

The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. First, a caveat. Let's say the number is $25mm.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Up and Running

AUGUST 29, 2014

Many people who want to start a business believe they will be able to get grants or loans to help them finance the venture. Do I need to hire a Certified Public Accountant (CPA) for my small business? Ask what the firm’s specialties are (tax, audit, business valuation, etc.). If not, the business idea is not feasible.

Small Business 87

Small Business CPA Government North America 87

YoungUpstarts

MAY 17, 2019

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. Use the cash forecast in the report to secure better terms on your business loan or lock the owner into seller financing.

Due Diligence 185

Due Diligence Forecast Deal Structure Valuation 185

Austin Startup

FEBRUARY 13, 2019

Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. An Austin investor was important to us for obvious reasons; we wanted to have someone we could meet with regularly in person, with a network that would help us with executive hiring and growth.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

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. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Austin Startup

AUGUST 20, 2017

Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention. You can’t be too careful in determining comp packages for your new hires. Keep the valuations consistent with company progress. Let’s look at some specifics: 1.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Team: Hires, fires, departures, responsibility changes, major promotions, and your org chart.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

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

ReadWriteStart

MARCH 24, 2011

Jobseekers, therefore, need help cleaning up their social media profiles so that objectionable material does not find its way to these background check scenarios, disrupting their chances of getting hired. The discussion today was around Social Media financing and go-to-market strategy.

Illinois 114

Illinois Entrepreneur Silicon Valley Chicago 114

The Startup Magazine

JUNE 1, 2023

There are currently tons of “zombie” startups that have runway, but growth has slowed and they have valuations that they won’t be able to grow into. Hire versatile players and lean into your team The SVB collapse reminded us that staffing matters. Everything is up and to the right but that doesn’t mean it’s time to let our guard down.

Early Stage 111

Early Stage Los Angeles Silicon Valley Cofounder 111