K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

K9 Ventures

JUNE 5, 2015

In that presentation, I said that Seed is not the first round of financing any more and that K9’s investments were mostly “pre-seed”. If it doesn’t have the product fully baked yet? Together this means that Seed stage companies need to run longer and at a higher expense structure, meaning they need to raise a lot more capital.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Both Sides of the Table

SEPTEMBER 6, 2010

I was thumbing through Twitter messages on my Blackberry on Monday (I use Twitter as a “ mobile first, web second &# product) when I saw the following Tweet (see graphic). You also understand that there are future financing rounds and in tough times this can change the value equation of stocks.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Spencer Fry

APRIL 17, 2017

It’s a great conference with about 150 attendees for the “Starter Edition” -- lots of online course creators, info product folks, SaaS people, and others. I would have continued to scrape by with a product that was conceptually on point, but didn’t have the bells and whistles that customers expect nowadays. Competition is everywhere.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Scott Edward Walker

JULY 27, 2011

Delaware law, however, recognizes a “futility” exception and excuses demand if the stockholder alleges particularized facts creating a reasonable doubt that the directors are disinterested and independent or that the challenged transaction “was otherwise the product of a valid business judgment.”

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

Scott Edward Walker

DECEMBER 13, 2018

We had a busy 2018, including closing several significant M&A transactions and financings. An acquihire is essentially the acquisition of a startup for its talent/team (rather than for its products or services). What is an Acquihire?

Founder 45

Founder Merger IP Liquidation Preference 45

Venture Chronicles

AUGUST 23, 2013

To recap, here is the series thus far: 1) Hiring 2) Dynamic Org Structures 3) Product First 4) Marketing. An example of this is having a board member say “well you should just charge more” without first considering the competitive dynamics of a market, or the product and customer perspective on value.

Management 66

Management Startup Liquidation Preference Dilution 66

SoCal CTO

JULY 13, 2010

Pivoting - Chris Dixon , June 14, 2010 My Hunch cofounders and I frequently ask ourselves: “If we were to start over today, would we build our product the same way we had so far?&# Just because a product has a patent, deep complexity and an obvious competitive advantage does not mean that it can fly by itself into the market.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

abovethecrowd.com

MAY 20, 2013

There are many synergies – different geographic strengths, different core customer bases, and different product strengths. There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

thestartuplawyer.com

FEBRUARY 24, 2010

About the Author Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. We entrepreneurs constantly try to refine our product or model, so it is only natural to think that we should refine ourselves.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

dondodge.typepad.com

JANUARY 15, 2011

It isnt always possible to have a competitive bidding situation at each financing round so here are some guidelines for funding sources and percentages. Friends & Family can usually raise between $30K and $300K and usually take an interest bearing note that is convertible into stock at the next financing. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Feld Thoughts

JULY 14, 2015

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. The company spends the $1m building and launching their first product. The product gets a lot better. Sure – it happens.

Recapitalization 70

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

Both Sides of the Table

FEBRUARY 14, 2016

The principle of microeconomics is that at a market-clearing price for any product the right amount of sellers and buyers will emerge and a price will be set. Some products are “inelastic” meaning when prices go up demand doesn’t fall much (think cigarettes, alcohol or even illicit drugs). And so it goes.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

Through this journey, we have raised the visibility of fundamental issues like the causes of exorbitantly high infant entrepreneur mortality, and alerted the entrepreneur community with a simple observation: Entrepreneurship = (Customer + Revenue + Profits); Financing is Optional. The rest of the services are for paying members only.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116