Feld Thoughts

APRIL 29, 2015

Now that everyone is overly focused on unicorns, the headline number on the valuation (e.g. Company X raised Y at a valuation of Z from A, B, and C) has crept into the story on big rounds. No understanding of the human dynamics behind the financing. No underlying metrics that drive the financing. financing of Mattermark.

Atlanta 70

Atlanta Valuation Term Sheet Finance 70

Feld Thoughts

DECEMBER 10, 2014

So – I’ll start with that – this is not a prediction, rather it’s a hypothesis, which is as long as there isn’t a cataclysmic macro event, Q115 financing activity is going to be insane. The number of large, “later stage” financings are remarkable – both in size and velocity.

Later Stage 142

Later Stage Syndicate Syndication Portfolio 142

Feld Thoughts

FEBRUARY 9, 2016

I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. I suffered through the next financing after implementing a complex structure, or a sale of the company, or a liquidation. Your existing investors might be willing to provide it.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Feld Thoughts

SEPTEMBER 20, 2011

In one of the entrepreneur cases, I explained how it was likely that they were going to be on the wrong side of the valuation discussion in the next financing based on one of the terms. However, many of the seed rounds done in TechStars are done using convertible debt as are many financings of less than $1m.

Term Sheet 125

Term Sheet Seed Stage Angel Investor Valuation 125

Feld Thoughts

DECEMBER 10, 2018

Unlike the endless stream of predictions that are about to come out, it’s an analysis of the spread between the public market and private company valuations. This dynamic is reflected in the article Scooter Firm Chases Funding to Staunch Losses about the current Lime and Bird financings.

DC 112

DC Equity Hosting Valuation 112

Feld Thoughts

AUGUST 5, 2014

Fred Wilson wrote a great post titled The Bubble Question a while ago where his punch line was: It is the combination of these two factors, which are really just one factor (cheap money/low rates), that is the root cause of the valuation environment we are in. Venture Capital capital Entrepreneurship finance investing Jobs labor VC wages'

Valuation 144

Valuation Venture Capital Flash Government 144

Feld Thoughts

DECEMBER 28, 2010

On the heels of all the noise around Groupon’s $ 100m financing at a $7.5b (billion) post valuation, I thought I’d put out a call for “old VC term sheets – prior to 1990.&#. My partner Jason Mendelson and I are working on a book titled Venture Financings: How To Look Smarter Than Your Lawyer and VC.

Term Sheet 118

Term Sheet Search Finance Valuation 118

Feld Thoughts

AUGUST 10, 2010

My partner Seth Levine has a detailed post up today titled Trada – from the beginning that describes the creation and financing of Trada. Niel and I hammered out a second financing in similar fashion (again around the Foundry conference table, this time without the need for an angel roadshow).

Syndicate 120

Syndicate Syndication Angel Financing Finance 120

Feld Thoughts

NOVEMBER 2, 2016

The existential freakout that occurred in January and February seemed like the distant past with the lingering hangover being a clearer focus on valuation and overall funding needs from new investors. We try to keep our heads down and just help finance our companies continuously through all stages.

Venture Capital 70

Venture Capital Private Equity Early Stage Valuation 70

Feld Thoughts

OCTOBER 12, 2011

Convertible Debt – Valuation Caps. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents. The series is now complete – here are the links to the posts in order. Convertible Debt Series. Convertible Debt – The Discount.

Term Sheet 138

Term Sheet Warrant Open Source Valuation 138

Feld Thoughts

JUNE 22, 2011

financings, IPOs, valuations, and bubbles (or not bubbles). Many of the tech blogs / news blogs that I’m reading are suddenly about deals. Several years ago, there was a lot more about “how to startup a company&# , especially around product, vision, and team. Now a lot of that focus has shifted to deal making and exits.

Lean 136

Lean Startup IPO Early Stage 136

Feld Thoughts

SEPTEMBER 20, 2013

After all the speculation about valuation, who owns what, what it’ll price at, how much money will be made, is Twitter growing or shrinking, what is a tweet after all, will their stock symbol be TWIT?, Financing ipo JOBS Act s-1 sec twitter' We’ve confidentially submitted an S-1 to the SEC for a planned IPO.

SEC 142

SEC IPO Investment Bankers Valuation 142

Feld Thoughts

AUGUST 30, 2011

He led the first round of funding for BigDoor through Founder’s Co-op, but used a creative structure, partly because Keith is such a stickler on valuation. Andy’s a serial entrepreneur who has spent the past few years working on ways to make the funding process better for entrepreneurs.

Cofounder 112

Cofounder Seattle Equity Valuation 112

Feld Thoughts

JANUARY 20, 2015

” “We are raising this financing to find product/market fit.” higher multiple, but not linear) your valuation will be. If your growth rate is between 50% and 100% and holding steady, that’s good and you’ll see a nice, big, healthy valuation. “We have product/market fit.”

Product 70

Product Marketing Valuation Search 70

Feld Thoughts

FEBRUARY 15, 2016

While going through my daily reading this morning, I came across a bunch of posts talking about how the sky was falling, Silicon Valley was in turmoil, financing was drying up everywhere, and all the unicorns were doomed.

Silicon Valley 70

Silicon Valley Term Sheet Early Stage New York 70

Feld Thoughts

SEPTEMBER 27, 2011

In the case of an early-stage startup that hasn’t issued preferred stock yet, the debt converts into stock of the acquiring company (if it’s a stock deal) at a valuation subject to a cap. In this case, the documents dictate that the company will pay back outstanding principle plus interest and then a multiple on the original investment.

Conversion 96

Conversion Sales Later Stage Preferred Stock 96

Feld Thoughts

APRIL 21, 2016

Bill Gurley wrote an incredible post yesterday titled On the Road to Recap: Why the unicorn financing market just became dangerous … for all involved. It’s long but worth reading every word slowly. ” This is linked to the previous bias, but it more personal and extends well beyond the investor.

Marketing 70

Marketing Down Round Startup IRR 70

Feld Thoughts

JUNE 2, 2015

We’ve been regularly running into another problem with doing a financing after companies have raised convertible notes. If the entrepreneur knows this and is using it proactively so they get a higher post-money valuation, that’s fair game. Mark has a superb example of how this works on his blog.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Feld Thoughts

FEBRUARY 28, 2023

Corporate law: In Germany, most companies in general and most VC-financed companies are structured in the legal form of a “Gesellschaft mit beschränkter Haftung” (GmbH). Often, this integration results in VC-financed GmbH companies having little to do with the GmbH as envisaged by the law.

Germany 165

Germany Liquidation Preference Option Pool Advisory Board 165

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 term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless.

Recapitalization 70

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

Feld Thoughts

AUGUST 1, 2018

We refer to B and C rounds as early growth – essentially financings with valuations between $50m and $300m pre-money. If a company hasn’t raised more than $5 million, we are a good target, as long as it is in the US (or Canada) and in one of our themes.

Syndicate 17

Syndicate Syndication IRR Canada 17