Startup Professionals Musings

SEPTEMBER 14, 2010

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from an angel, either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Anti-dilution protection. Marty Zwilling.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Anti-dilution protection.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. 2) Redline - Series Seed Term Sheet (1 v. Series Seed Term Sheet (v 2.0) Then you win.”

Finance 58

Finance Term Sheet Equity Aggregator 58

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. ” The Cost of Financing. In a Series A financing, companies must pay the investors’ lawyers as well as their own.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

Both Sides of the Table

APRIL 13, 2011

There was a lot of consumer internet activity again…resurgence of things, but it was still mysterious, venture capital was still kind of closed, 1st time entrepreneurs had a lot of questions that were unanswered, and there was still some sort of hand waiving around all the financing stuff and so we took it on….”. Is that when it became big?

Technical Review 288

Technical Review Venture Capital Silicon Valley Software Review 288

Gust

NOVEMBER 11, 2011

That tactic has the advantage of increasing the perceived value of winning, and generating headlines like the $XX million prize money. But it also has the disadvantage of mixing apples and oranges and playing up prizes that don’t work out to real dollar value. But before the term sheet is signed, problems come up.

Software Review 79

Software Review Term Sheet Due Diligence Angel Investor 79

View from Seed

FEBRUARY 12, 2020

If you have a term sheet in hand or know for a fact that you are about to get one, you can be pretty transparent and say that you are late in the process and are looking to make a decision by X date. If you don’t have a term sheet, my general approach is to communicate that you are early in the process.

Term Sheet 364

Term Sheet Burn Rate Founder Partner 364

Steve Blank

APRIL 1, 2020

Some VC’s are walking away from signed term sheets. As part of these operating changes, make sure your heads of HR and finance recognize that they have entirely new jobs. Award equity to employees equal to the value of their reduced salaries. Others are cutting their valuations. Draw down all debt commitments.

South Korea 333

South Korea Salary Business Model China 333

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Composition of Returns.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Mucker Lab

AUGUST 27, 2014

Encyclopedic knowledge of term sheets and startup buzzwords can be quickly learned, trained, and packaged. As VCs, we simply have to understand the risk / reward of these type of investments, and to actually be excited that we can be operationally involved in adding value ourselves.

Los Angeles 138

Los Angeles Southern California Silicon Valley Technical Review 138

The Next Web

FEBRUARY 27, 2014

This is typically in conjunction with an upcoming financing or pending takeover offer. Here are some key drivers on how to value your business, in a way that will make sense to you, and will be in line with investor expectations. Freshman are a piece of paper to beta site (bootstrap financed—raise $50K to $500K). Your industry.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Both Sides of the Table

OCTOBER 19, 2009

My blog linked to Brad Feld’s blog because I was so grateful for his series on term sheets and he was one of the biggest reasons that as a VC I felt compelled to blog. The other 3 are still pending but since I am close to agreeing a term sheet it doesn’t make sense to pursue things at this stage. Biggest lessons ….

Venture Capital 274

Venture Capital Term Sheet San Diego Viral 274

Reid Hoffman

JULY 27, 2021

In the interests of fairness and learning, I’m also going to allow my Blitzscaling co-author and fellow podcaster Chris Yeh, who earned an MBA from Harvard Business School, to provide his MBA perspective on the value of that degree: Many MBAs student are performing what I call “career laundering.” You’ve heard of money laundering?

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Reid Hoffman

JULY 27, 2021

In the interests of fairness and learning, I’m also going to allow my Blitzscaling co-author and fellow podcaster Chris Yeh, who earned an MBA from Harvard Business School, to provide his MBA perspective on the value of that degree: Many MBAs student are performing what I call “career laundering.” You’ve heard of money laundering?

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

techcrunch.com

SEPTEMBER 6, 2012

It consists of a standard term sheet, automatically generated closing documents, and tools to manage the process including electronic signatures, managing wire information, generating PDFs, and more. AngelList will then automatically generate a term sheet and closing documents.

Term Sheet 70

Term Sheet San Francisco Technical Review Seed Stage 70

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

reidhoffman.org

NOVEMBER 12, 2013

Because we value integrity and confidentiality at Greylock, we never share an entrepreneur’s pitch deck with others. 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.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

ReadWriteStart

JUNE 1, 2020

It is essential to understand the funding structure stated in your term sheet and the advantages and disadvantages it may have for your business. If you are facing any problem you can always check out this: Business Loan vs. Equity Financing. Stages of Equity-based funding. ? Inception stage. billion dollars in 2017.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

OnlyOnce

OCTOBER 31, 2013

Here are a few tips for ending up with the best long-term partner as an investor. One of the strongest points of value that venture investors bring to the table is pattern matching, and you can maximize that by making sure the investor you end up with has seen a multitude of companies like yours. They’re loaded up with value-add.

Valuation 133

Valuation Term Sheet B2C Security 133

Gust

OCTOBER 25, 2014

Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies. A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms. Term Sheets & Valuations. A Line by Line Look at the Intricacies of Term Sheets & Valuations.

Term Sheet 132

Term Sheet Private Equity Exit Strategy Venture Capital 132

Steve Blank

FEBRUARY 26, 2020

Btw, the definition of each startup financing stage has changed in the last decade. At the end of this post, we’ll discuss the valuation at each step (how much the investors value your company and therefore how much of it you need to give up to get this money) and how much revenue you should generate at each step.).

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

ReadWriteStart

OCTOBER 6, 2011

The 1M/1M program aims to help a million entrepreneurs globally reach $1 million in revenue (and beyond), thereby building the foundation of a robust, distributed and sustainable economic value creation that would add up to $1 trillion dollars in global GDP. The company has generated excellent investor interest and multiple term sheets.

Silicon Valley 118

Silicon Valley India San Francisco Entrepreneur 118

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. Have $1,000,000 in assets excluding the value of their primary residence.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

The Next Web

AUGUST 26, 2012

The more your narrow down your target audience, the higher the chance is that you will be able to reach the crucial turning-point where you offer your customers enough added value to make them happy and returning. For many start-ups, the central focus is developing a product that offers value to a target audience. Most start-ups fail.

Bankruptcy 121

Bankruptcy Technical Review Intellectual Property Due Diligence 121

Berkonomics

APRIL 3, 2014

We’ve spoken of financing a young company through friends and family, known as “inside angels.” You will be given a “term sheet” during the process, calling out the terms proposed for the investment. There are three classes of equity investors for early stage businesses that we have not yet considered. Raising money'

Equity 92

Equity Finance Liquidity Event Angel Groups 92

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “ The Age of the Unicorns ” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.” Who are the Sharks?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

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. Having made it almost to the end of our sample term sheet: Documentation. Returning to our sample term sheet: Note Purchase Agreement.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

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. So how DOES a VC think about financings at early stages? It’s very simple. For me it’s clear.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

FEBRUARY 14, 2016

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization. When I was an entrepreneur there was no public information about how term sheets worked or how investors thought. Why Financing in Falling Markets is So Damn Difficult.

Valuation 150

Valuation Down Round Startup Later Stage 150

A Smart Bear: Startups and Marketing for Geeks

JUNE 27, 2011

In Part 1 I explained how it’s senseless for small companies to compute “one correct value&# for the company, but rather that buyers and sellers must be considered separately. Remember how the buyer has his own way of valuing the deal ? It’s not the number, it’s the whole term sheet. At what price?

Sales 235

Sales Term Sheet Stock Deal Structure 235

www.readwriteweb.com

DECEMBER 29, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Scott Edward Walker

AUGUST 25, 2011

In certain deals (like a venture capital financing) this is critical because you will, in effect, be married to the guys on the other side of the table for a number of years. Will he add significant value (e.g., through his contacts, technical expertise, etc.)? Yes, legal fees are often expensive.

Technical Review 63

Technical Review Term Sheet Los Angeles Entrepreneur 63

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. But others will teach you the value of a little preparedness and skepticism. Do not take that selection lightly.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

NZ Entrepreneur

JULY 30, 2020

Without these two things, the investment is unlikely to return value to the investor. One common challenge arises when founders are presenting their opportunity to multiple investors or are considering alternative financing strategies. Once deal terms have been agreed, you should not continue to shop the opportunity around.

Term Sheet 67

Term Sheet Due Diligence Valuation Down Round 67

Startup Professionals Musings

APRIL 3, 2012

But I have found that making the right choice at the right time can have a major impact on your long-term valuation, and the decision process is complex. Angels are typically high net-worth individuals, investing their own money, interested more in early or “seed” financing of amounts starting as low as $25K. The basics are simple.

IRR 248

IRR Term Sheet Startup Valuation 248