Both Sides of the Table
SEPTEMBER 25, 2010
When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. As I’m generally a believer in ‘pricing rounds’ I initially didn’t agree with the premise of the post. Photo credit: D. and not a min.
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.
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View from Seed
MARCH 24, 2021
What Are Your Valuation Expectations? Taking Corporate Venture Money: When it Makes Sense “PayPal took on these investors in small part because it gave us an imprimatur in the stodgy and regulated world of financial services. “If you say something too high, it may scare some investors away prematurely. ” (Rob Go).
Pascal's View
JULY 9, 2017
This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.
Both Sides of the Table
OCTOBER 12, 2014
New investors sometimes want early investors to put in money to “prove” they have confidence in the new price. In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. Thus begins the dance. This is for a more complicated reason I call “the mark-up game.”
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. It’s worth reading his post to understand the problem. It’s very simple.
Lightspeed Venture Partners
OCTOBER 7, 2012
That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. The last company was a bit of a puzzler.
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