View from Seed

JANUARY 27, 2021

100M is a meaningful increase from our $50M third fund, though it’s still quite small in the grand scheme of venture, especially amid the recent wave of late stage financings and SPACs. Each time that we set out to raise a new fund, we deeply believe that we are going to be able to deliver superior returns to our investors.

LP 411

LP Early Stage Seed Stage Venture Capital 411

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.” It’s hard to be a great lead investor . VCs take their time precisely for the reason Fred articulates – they play the role of “lead investor.”

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

View from Seed

FEBRUARY 26, 2020

In previous blog posts I’ve written about the two main approaches to building a seed round syndicate – the subscription method (where an entrepreneur presets a structure with a convertible note or SAFE and recruits investors who subscribe to the round, all without a term-driving lead investor) and a term-driving lead investor approach.

Syndicate 257

Syndicate Syndication Lead Investor Venture Capital 257

This is going to be BIG.

MAY 4, 2022

I’m a straight white dude who grew up in NYC and worked in finance. How competitive is your company going to be in the race to recruit the best women on the market (women—the segment of the talent market who hold the majority of new college degrees) when your lead investor is a top donor to an anti-choice org?

Cap Table 163

Cap Table Cofounder Private Equity Finance 163

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

David Teten

SEPTEMBER 5, 2014

Professional expert networks allow you to efficiently convert your financial capital into relationship capital. Like many established finance & media companies, GLG knows that the tech startup sector is a growing part of the economy. Or, you can go straight to the source.

New York 114

New York Technical Review Networking Advisory Board 114

Genuine VC

JULY 10, 2012

There are essentially two distinct basic strategies for startup entrepreneurs to raise a seed round of capital: Subscription approach – An entrepreneur sets a structure (usually a convertible note) and recruits individual angel investors who subscribe to the round, all without a term-driving lead investor.

Syndicate 207

Syndicate Syndication Seed Stage Portfolio 207

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Professor VC

APRIL 1, 2010

One comment made by Jason was that angels tend to be less sensitive than VCs on valuation and can potentially make it difficult to get a venture financing done at acceptable valuation. While this may certainly be the case with unsophisticated angels (much less of these now) or in cases with no lead investor, Id argue the opposite.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Pascal's View

JULY 9, 2017

At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. When it comes time to convert the notes, these entrepreneurs face ‘sticker shock’ about their post-financing ownership.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Hunter Walker

JANUARY 10, 2022

Homebrew was on the board of a construction tech startup called BuildingConnected , having led their seed financing. I certainly didn’t know a ton about venture capital or the tech industry at large. The needs of the lead investor for ownership? You want to tell people how we originally met? Justin Levine: Sure!

Cofounder 89

Cofounder Founder Acquisition Startup 89

Professor VC

JANUARY 20, 2009

The Most Important Venture Capital Statistic. The latest statistics from VentureSource show 554 financings in Q4, down from 620 in Q3 and 718 in Q4 2007. million for the year, which is the first time it has been below $5 million since 2001, a sign that capital efficiency will be even more important than it has.

Venture Capital 28

Venture Capital Silicon Valley San Jose Bootstrapping 28

Growthink Blog

MAY 3, 2010

Typically a Series B financing event will raise $5 to $10 million for the company. million Series B financing round - this is the biggest Series B round I've seen in a long time. There is a ton of financing waiting for the right companies. So yes, even in this economy, venture capital financing IS readily available.

Venture Capital 71

Venture Capital LP Syndicate Syndication 71

This is going to be BIG.

FEBRUARY 27, 2011

You get dilution sensitive and you start optimizing on price of a financing deal, versus finding the right partners or raising enough money to grow. The right lead investor and the right amount of cushion in a raise can help with the best defense against scaling disaster—hiring.

Dilution 104

Dilution Equity Hiring Partner 104

Feld Thoughts

AUGUST 2, 2010

This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors. They are: Fred Wilson: Lead Investors, Dipshit Companies, and Funding Every Entrepreneur. Million Round From Google Ventures.

Angel Investor 152

Angel Investor Cofounder Syndicate Syndication 152

This is going to be BIG.

AUGUST 2, 2010

First off all, not every company is right for equity financing—and many other companies would be better off starting without it. I can’t tell you how many companies I’ve run into where the inability to get financing, or the lack of interest in it, led them to building better companies.

Startup 101

Startup Venture Capital Incubator Programming 101

The Equity Kicker

DECEMBER 3, 2012

Chris Dixon wrote an interesting post yesterday which described two different ways of thinking about startup opportunities – the finance lens and the product lens. whilst investors typically look at opportunities from an investment perspective, asking the question ‘is there an opportunity to make a lot of money from this investment?’.

Finance 116

Finance Valuation Lead Investor Startup 116

The Startup Lawyer

JUNE 9, 2010

A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. Not all startup founders understand this tenet. Case Study.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

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. I like to start with a list of approximately 40 qualified investors. Of course there’s no exact number of VCs you should meet?—?these these are simply guidelines.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Austin Startup

AUGUST 16, 2010

The company has been making steady progress, culminating in a huge round of financing. The company announced it is raising $48 million from a unique syndicate of investors comprising industry leading venture capital firms and semiconductor innovators. Power consumption matters more than ever.

Syndicate 54

Syndicate Syndication Venture Capital Texas 54

Babbling VC

DECEMBER 5, 2010

Ultimately, money ran out again and this fund decided not to participate in a further financing round. This was absolutely catastrophic to the business as new investors were swayed by an insider (a reputable one at that) not going along with the investment. I learned so much in the years I've been involved with venture capital.

Technical Review 76

Technical Review Europe Portfolio Germany 76

Both Sides of the Table

AUGUST 1, 2010

It’s just that he’s a “super seed&# investor in a firm, Founder Collective , that I really respect (and with whom I’ve done two deals and hope to do a third) and I’m a partner in a venture capital firm, GRP Partners. In these cases we proactively offer to lead their next round of financing.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Reid Hoffman

JANUARY 26, 2021

Selecting your investor board members should be a careful and thoughtful process, even if that means it requires more work. One common mistake is for entrepreneurs to simply select whichever venture capital firm is offering the highest valuation. Financing can be one of these things. That’s a no-brainer, right?

Startup 36

Startup Equity Early Stage Green 36

David Teten

JANUARY 10, 2012

He is an active angel with many successful angel investments including: Rent.com, (purchased by Ebay in 2005 for $415 million), Golfnow.com (purchased by Comcast in June 2008), and Lifelock (lead investors include Bessemer Venture Partners and Kleiner Perkins Caufield & Byers).

Technical Review 128

Technical Review Technology North Carolina Switzerland 128

SoCal CTO

SEPTEMBER 8, 2010

How To Pitch A Product - A VC : Venture Capital and Technology , August 4, 2010 I've said a bunch of times on this blog that the perfect pitch is a very short intro to provide context followed immediately by a demo. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors.

Startup 191

Startup CTO Hire Cofounder Venture Capital 191

reidhoffman.org

NOVEMBER 12, 2013

You may happen to emphasize the right points that pique an investor’s interest, but you shouldn’t leave your financing up to chance. Second, understand the broader financing climate. In 2004, investors regained interest in the consumer internet again. Steer into your investors’ objections.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Steve Blank

FEBRUARY 3, 2011

We were just about to have a board meeting in another week to talk about raising another round of financing to keep our struggling disaster afloat. Steve, we thought we’d tell you this before the board meeting, but both our firms are going to pass on leading your next round.” Filed under: Rocket Science Games , Venture Capital.

San Francisco 331

San Francisco Silicon Valley Limited Partner Venture Capital 331

Gust

OCTOBER 26, 2011

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. The Note Purchase Agreement and Convertible Promissory Note are essential documents for any convertible note financing.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

Gust

SEPTEMBER 13, 2011

Today’s unveiling of Gust , the global infrastructure for early stage entrepreneurial financing, is a milestone that has been seven years in the making. Instead it came down to the simple question of “how can you get angel investors and venture capital funds to join and use the platform?” Welcome to Gust!

Angel Investor 79

Angel Investor Silicon Valley Venture Capital Finance 79

Both Sides of the Table

MARCH 6, 2011

I accidently blow the cover of a hot startup raising a round of financing on AngelList (oops!) – hint – it’s a product that I talk very openly about loving but I’m not an investor. I ask Naval about the importance of a lead investor. What if nobody stands up as a lead investor?

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

Professor VC

OCTOBER 20, 2009

In how many of those were you a lead investor? What percentage of your members are not active angel investors (i.e. At Sand Hill, we are very active and often lead investor and Series A board representative. The Most Important Venture Capital Statistic. Venture News. Average size? On Vacation.

Angel Investor 35

Angel Investor Due Diligence San Jose Silicon Valley 35

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. Do not take that selection lightly. Background Reading: How to avoid “captive” company counsel Local v.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48