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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. Those were the dog days of entrepreneurship.

Valuation 405
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Equity for Early Employees in Early Stage Startups

SoCal CTO

An employee is later, has a greater portion of compensation as cash, has lower risk, and generally does not bring as much to bear in terms of the concept. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. n = (1.2 - 1)/1.2 =.167. of the company for him.

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Option Pools and VC Negotiations

Rob Go

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. Essentially, the new investor wants there to be a certain % of options available to employees after they invest.

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Beware of Premature Merge Elation

Both Sides of the Table

But to be clear the overwhelming majority of deals involve one company driving the cultural integration, establishment of uniform processes, hiring / firing decisions, etc. I think we had slightly different definitions of this saying but since he coined the term I have to credit him. They often involve big hugs on stage.

Merger 276
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What is it Like to Negotiate a VC Round?

Both Sides of the Table

Another problem that arises in financings these days is that after a VC submits a $2 million term sheet all of a sudden a large number of “helpful investors” pop up who were waiting for a “strong lead” and now all of a sudden a $2 million round becomes a $2.75m round. How much is in the option pool?

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When The VC Asks: About Your Hiring Plan

Hunter Walker

Whether it’s adding capacity to an existing function (#MawrEngineers) or bringing new talents onboard (“we intend to make our first marketing hire”), glossing over these bullet points towards the back of the pitch deck would be a mistake. I’m interested in not just what these people will be doing but how and when they’ll be hired.

Hiring 108
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Why I left Wall Street to figure it out.

Austin Startup

This was my time at a Wall Street firm that had hired me after I applied for their Junior Stockbroker position, a little while after I graduated from college. This went for a week, two weeks, and I honestly tried to come to terms with it. in terms of events, parties, gatherings?—?in I heard them but said nothing.