Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. I can boil it down to how this tension plays out. How much is in the option pool?

Pre-Money Valuation 150

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

Startup Professionals Musings

MAY 23, 2012

Longer-term, enhanced product value begets superior company valuation through your organization’s intellectual property (IP) portfolio. Proper hiring of people with a natural curiosity, open-mindedness, and ability to see the big picture is the way to create and enhance the right mind-set. Accountability. Training and coaching.

Intellectual Property 247

Intellectual Property IP Valuation .Net 247

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. The earlier you back a startup the more important this is likely to be. But that doesn’t always have to be the case.

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Both Sides of the Table

APRIL 25, 2011

Early in a services business there is usually no profits as the company reinvests in hiring people to grow, but by $20 million in sales the company should at least be pulling in 10% profits (if not more) depending on how much is reinvested. You own the IP you create. But it might not. Why Build a Services Business in the First Place?

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Startup Professionals Musings

MARCH 9, 2011

Longer-term, enhanced product value begets superior company valuation through your organization’s intellectual property (IP) portfolio. Proper hiring of people with a natural curiosity, open-mindedness, and ability to see the big picture is the way to create and enhance the right mind-set. Accountability. Training and coaching.

Intellectual Property 234

Intellectual Property IP Valuation .Net 234

YoungUpstarts

APRIL 18, 2019

As a founder, you have to come to terms with not having complete control — of your team, the market, or your valuation. My advice is this: Set high standards for the people you hire. Sure, IP and patents are the marks of a company with great value—but that’s only true when they’re associated with the right people.

Cofounder 127

Cofounder Startup Private Equity Equity 127

Scott Edward Walker

NOVEMBER 2, 2011

Button-down IP ownership and assignment issues (see post here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ).

Accredited Investor 111

Accredited Investor Stock Options Delaware Silicon Valley 111

Startup Professionals Musings

MARCH 15, 2010

Longer-term, enhanced product value begets superior company valuation through your organization’s intellectual property (IP) portfolio. Proper hiring of people with a natural curiosity, open-mindedness, and ability to see the big picture is the way to create and enhance the right mind-set. Accountability. Training and coaching.

Intellectual Property 122

Intellectual Property IP Valuation .Net 122

VC Cafe

SEPTEMBER 26, 2010

It’s nice to have protected IP, but that will mostly matter later on in the event of an acquisition. A good rule of thumb is to raise money when you need to start hiring, but this really depends on the context of your startup. For consumer web startups, the more traction you show, the better valuation you will get.

Elevator Pitch 102

Elevator Pitch Incubator Technical Review Startup 102

Scott Edward Walker

OCTOBER 27, 2015

Button-down IP ownership and assignment issues (see post here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ).

Intellectual Property 40

Intellectual Property Accredited Investor Vesting Delaware 40

Business Plan Blog

DECEMBER 10, 2013

A major piece of the business plan will be your capitalization strategy demonstrating the milestone timeline discussed above as well as the effects of accomplished milestones on the company’s future valuation. Founding Team, Key Hires, Advisory Board. Product Development. Intellectual Property. Market Validation.

Angel Investor 55

Angel Investor Intellectual Property Seed Capital Advisory Board 55

Business Plan Blog

NOVEMBER 22, 2013

A major piece of the business plan will be your capitalization strategy demonstrating the milestone timeline discussed above as well as the effects of accomplished milestones on the company’s future valuation. Founding Team, Key Hires, Advisory Board. A fair amount of your FFF funding will likely go towards product development.

Intellectual Property 55

Intellectual Property Advisory Board Startup Seed Capital 55

Software By Rob

FEBRUARY 28, 2012

If you can go over the valuation methods each side used, that would be very helpful to know, even if you don’t share the cash figures involved. I hired a lawyer with experience in IP website acquisitions to draft up a custom agreement. This effort is still very much in progress; more to come in future posts.

Acquisition 53

Acquisition Software Review Technical Review NDA 53

www.paulgraham.com

OCTOBER 23, 2010

One of the best tricks I learned during our startup was a rule for deciding who to hire. And when businesspeople try to hire hackers, they cant tell which ones are good.Even other hackers have a hard time doing that. When we got real funding nearthe end of 1996, we hired a great CFO, who fixed everything retroactively.

Startup 105

Startup Cofounder Software Stock 105

This is going to be BIG.

JANUARY 19, 2010

Good luck hiring anyone innovative, too. If I were thinking about a startup or participating in any kind of startup activity, like classes or an incubator, and I worked at Yelp fulltime, I’d go take a look at the assignment of IP rights in my employment contract. That’s not the kind of place innovators tend to like to work.

Technical Review 68

Technical Review Venture Capital IP API 68

www.currentlyobsessed.com

MAY 28, 2010

Valuation is an important aspect of VC deal terms, and a major determinant of your ultimate outcome. I unexpectedly found that it was more helpful to think about the company valuation as an output variable in the fund-raising equation. The net effect was more money raised, higher valuation and the same percentage of equity sold.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

ReadWriteStart

MARCH 27, 2011

The idea is to build a hit that would make the founder(s) an appealing and quick talent acquisition (sometimes referred to as an acq-hire). Lastly, large companies that seek new talent will likely hire promising individuals through a small exit. This should also help valorize you in a acq-hire scenario. The focus is on building.

Lean 144

Lean Startup Agile Coder 144

Transformify

APRIL 12, 2020

As millions of people worldwide already lost their jobs amid COVID-19 outbreak, local labor agencies across the globe are looking much closer at overseas remote work arrangements asking companies ‘’ Why don’t you hire locally? Are you looking to hire talented employees, remote workers and freelancers? Slave Labor.

Bangladesh 98

Bangladesh Philippines Salary Cofounder 98

grasshopperherder.com

SEPTEMBER 24, 2011

Valuations. I was approached with one sweat equity offer that placed the valuation of the company at >$5 million pre-money and before even a seed round of funding. I would be very wary of accepting a valuation like this, simply because I’m not qualified and as a consultant, I shouldn’t have to be. Unseen Metrics.

Sweat Equity 41

Sweat Equity Equity Cofounder Non-Compete 41

Austin Startup

DECEMBER 10, 2017

My friend is actually building his own house, down to hiring the day laborers and all the trades, procuring all the materials, and supervising every step of the process. We raised significant capital at a high valuation based on his credibility, and he certainly was entitled to call the shots on decisions like that.

Georgia 48

Georgia Startup Incubator Harvest 48

www.vccafe.com

MARCH 11, 2013

IP Location Tools. find/hire freelancers. hire low-cost international engineering talent. VWorker -Â find/hire freelancers. Seed Stage Valuation Guide. Lodestone Innovation Partners (IP) Ltd are spin-out specialists. “My IP” – produced by the UK Intellectual Property Office.

Software Review 53

Software Review Technical Review Startup 53