Both Sides of the Table

MAY 27, 2013

I would say the norm for many early-stage companies is somewhere between 6-10 in-person meetings per year. The earlier stage the more likely it is 10 meetings and the later stage the more likely it is 6. Ask for short conference calls. In either case it is very helpful to have a series of 30-45 minute calls in between.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Both Sides of the Table

JUNE 27, 2021

If you’re a later-stage fund that comes in when there’s less upside but a lower “loss ratio” you might have only 8–12 investments in a fund. The right number of deals will depend on your strategy. If you’re a seed fund that takes 5–10% ownership and doesn’t take board seats you might have 50, 100 or even 200 investments.

Bankruptcy 294

Bankruptcy Bridge Financing Portfolio Angel Investor 294

Both Sides of the Table

MAY 4, 2013

When you are raising a large, later-stage round given by this time you’ve likely got a fairly large business to run. When you are trying to raise “strategic money” since these people are often hard to reach and they are often more used to being approached by bankers. International money.

Early Stage 361

Early Stage Deal Flow Investment Bankers Technical Review 361

Both Sides of the Table

APRIL 6, 2014

I know that in later-stage growth equity deals some firms even hire third-parties who will do the reference calls. I have been part of one deal where this happened and the level of detail from a professional reference checker was unbelievable.

Technical Review 302

Technical Review Hiring Later Stage Employee 302

Both Sides of the Table

MAY 4, 2013

When you are raising a large, later-stage round given by this time you’ve likely got a fairly large business to run. When you are trying to raise “strategic money” since these people are often hard to reach and they are often more used to being approached by bankers. International money.

Deal Flow 347

Deal Flow Early Stage Investment Bankers Technical Review 347

Both Sides of the Table

JULY 22, 2010

I also won’t say there is never a time for “participating preferred&# but it tends to be in later-stage rounds and particularly in the case where the founders are getting an exceedingly high valuation relative to the norm. You reap what you sow.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

MAY 30, 2018

Many VCs will have a distribution curve where they’ll do a small number of early-stage deals (say $1.5–3 3 million invested at a $6–10m pre-money), a larger number of “down the fairway” deals ($4–5 million at a $15–25 million pre) and a few later-stage deals (say $8–10 million at a $30–40 million pre).Of

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Both Sides of the Table

JUNE 5, 2011

The earlier you invest the higher the chances the company won’t work out and thus you pay a lower price than later-stage investors. So how exactly are prices determined? There is no great science to it.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

APRIL 2, 2010

In an early stage deal that fund might reserve 2x their initial investment or if it’s a larger round or later stage they might reserve 1x. That fund “reserves&# money for NewCo’s “follow on&# investments.

Venture Capital 269

Venture Capital Balance Sheet Early Stage Software Review 269

Both Sides of the Table

FEBRUARY 4, 2016

Frankly, it’s really hard to write checks at later-stage valuations when you know you’ll have to exit into the public markets or sell to a public-market company one day and the stocks are declining precipitously. But again, this may still be lagging indicators or the canary in the coal mine.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Both Sides of the Table

MAY 27, 2016

Early stage. I think I’m better at the product stage of a business and helping with strategy, marketing, pricing, feature sets and so forth than I am at evaluating later-stage businesses based on financial results and business metrics and priced accordingly.

Early Stage 254

Early Stage Non-Compete LP Later Stage 254

Both Sides of the Table

MAY 21, 2018

He was in a later-stage financing round and was talking with many investors. I was recently with an entrepreneur and talking with him about his fund raising process. Some started asking him for very specific analyses to be completed on his data and wanted his company to crunch the numbers.

Term Sheet 217

Term Sheet Later Stage Demand Email 217

Both Sides of the Table

FEBRUARY 23, 2015

” If the “nut” is too high I usually veer them towards later-stage opportunities (post B or C round) where the comp is higher, the exit is more likely / nearer, the upside is still nice but obviously not the same as if you joined early).

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

FEBRUARY 15, 2016

You don’t even realize that the later-stage investor doesn’t support you any more. They don’t want you to sell for $20 million because they may still believe in you AND they know that they’ll get no return from this (and your personal return will be very small). You are in a classic cap table pinch.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

AUGUST 25, 2015

In a period of “uncertainty” about the future venture capital rounds take longer – particularly later-stage deals. Mostly because VCs want to wait to see if a “new reality” has set in.

Balance Sheet 150

Balance Sheet Valuation Burn Rate Stock 150

Both Sides of the Table

FEBRUARY 18, 2017

Lindel is heading Foundry Group Next , which is a Foundry Group fund that invests in both venture capital funds as well as directly in startups at later stages in their cycles than Foundry Group’s core fund would typically do. Lindel Eakman led the discussion with Fred and Andy.

Leadership 161

Leadership LP Venture Capital Silicon Valley 161

Both Sides of the Table

JUNE 13, 2018

And as you become a later stage company in fund raising you’ll likely have several follow up decks to discuss things like: Unit economics LTV / CAC analyses Cohort analyses Retention rates (SaaS) or repurchase rates (eCommerce) etc. Don’t send these?—?go go back and present them.

Portfolio 261

Portfolio IP Later Stage Email 261

Both Sides of the Table

APRIL 28, 2010

Summit is a hugely respected firm in Silicon Valley and a long-term “institution&# but they’re better known as more of a “private equity&# investor meaning that they do later stage investments in much larger companies that are profitable. Obviously they see big things in Wildfire. 4mm in Series A.

Venture Capital 270

Venture Capital Cofounder Spain San Diego 270

Both Sides of the Table

AUGUST 24, 2015

At least later stage investors. This could have an impact on later-stage valuations. The one thing that has become clear to me over the last couple of months is the skepticism that many late-stage VCs (and LPs) have had about late-stage valuations. I have to assume other investors feel the way I do.

Stock 150

Stock Finance Marketing Valuation 150

Both Sides of the Table

MAY 18, 2010

Potential employees want to “get together.&# VC’s will want to learn about what you’re up to and later stage VCs will have their 23-year-old analysts call you to tell you how interested they are in your company. Everyone will want you to speak at conferences. Service providers will want to get to know you.

Later Stage 305

Later Stage Demand Video Email 305

Both Sides of the Table

MARCH 12, 2013

His plans are still solidifying but will likely involve some later-stage activities in the eCommerce & retail sectors unrelated to early-stage venture capital. I’ve been to his house and he did build a little putting green atop his patio deck in the hills above Brentwood that has spectacular views.

Partner 360

Partner Las Vegas Los Angeles San Francisco 360

Both Sides of the Table

JANUARY 21, 2010

Don Lee at Buchalter Nemer was referred to me by Todd Gitlin and came on very high recommendations as an early-stage, true entrepreneur’s perfect lawyer because he understands how to work with startups. On later stage LA Tech M&A deals I’ve heard there’s none better than David Hernand of Gibson Dunn.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

JUNE 19, 2017

How Much Capital You Have Raised / Your Runway In general I recommend that in early-stage startups you try to raise at least 15-18 months of runway. In general you should allow yourself 4–6 months of time to fund raise (longer if you’re later stage and require a much bigger round) so calculating anticipated burn rate is pretty easy.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Both Sides of the Table

MAY 25, 2013

But the larger funds usually have lower returns because they are often investing bigger dollars at later stages with less risk and therefore lower returns. As you can see in this Cambridge Associates data, early-stage investing beat later stage investing in returns in 70% of the past 30 years. Yeah, true.

LP 374

LP Later Stage IRR Term Sheet 374

Both Sides of the Table

JULY 15, 2010

Convertible debt is a loan to the company that doesn’t typically get paid back but rather “converts&# into equity when you raise a larger round at a later date. If you’re an entrepreneur, all else equal you prefer convertible debt because the deal is priced at a later stage when you’re worth more.

Southern California 210

Southern California Venture Capital Seed Stage Angel Investor 210

Both Sides of the Table

MARCH 31, 2012

Erin’s main points: “As a former tech sales executive, I agree with many of [Mark's] lessons — when applied to later-stage, post-traction point startups. However, I advocate a more nuanced approach for early-stage startup teams” 1.

Startup 319

Startup Early Stage Sales Cofounder 319

Both Sides of the Table

JUNE 28, 2011

In tomorrow’s post I will explore how the changes initiated by Amazon and then propagated by Micro VCs has led to a blurring of the lines in which stages VCs & later-stage investment firms traditionally invest and why this is driving up valuations in private companies beyond common sense.

Venture Capital 334

Venture Capital Software PHP Open Source 334

Both Sides of the Table

MAY 24, 2021

But markets have changed and I think investors, founders and experienced executives who want to join later-stage startups can all benefit from playing the long game. There was later-stage capital provided by Morgan Stanley, NewView Capital, Goldman Sachs and others that gave us a long-term outlook.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Both Sides of the Table

JULY 17, 2018

Strong relationships & trust based on transparency helps a great deal  —  @msuster 11/ Venture debt has its places (timing of AP vs. AR, inventory purchases, etc) but should be used very sparingly as a replacement for venture capital except at later stages of your business.

Founder 242

Founder Dilution Software Review Later Stage 242

Both Sides of the Table

JUNE 28, 2010

He says they are just as selective on seed investments as they are in later stage deals. Simple: according to Mike Polaris has followed on nearly every seed investment that they’ve done. And Mike believes that entrepreneurs often need less capital to get started these days. You can hear his full argument in the interview.

San Francisco 230

San Francisco Los Angeles Cofounder SMS 230

Both Sides of the Table

SEPTEMBER 25, 2011

First, you need to be clear that any larger fund writing a small check IS ONLY doing it so that they have the opportunity to invest at a later stage if you’re doing well. How entrepreneur should talk to VCs about increasing ownership percentages over time. It’s fine to have one. Often it’s a good idea.

Entrepreneur 310

Entrepreneur Dilution Finance Silicon Valley 310

Both Sides of the Table

JULY 24, 2016

If you’re slightly later stage it might be 5–6 hours. This is your chance to tell board members what keeps you up at night and let them offer you input into what they would do. I would think a 2–3 hour meeting with 2–3 topics ought to do.

Metrics 196

Metrics Strategic Investors Later Stage Management 196

Both Sides of the Table

NOVEMBER 18, 2012

Maybe I need to do slightly later stage.” He told me, “I have $6,000 in my bank account. Throughout the course of last year I never had more than $8,000 in my account. . I want to do this again. But I have to be careful. He had raised nearly $500,000 from investors. Many are well known.

Monaco 420

Monaco Cofounder Chicago Mexico 420

Both Sides of the Table

MAY 13, 2018

Sometimes engagement at the later stages seems to go dry. This is the green and yellow portions of my graphic above which I’ve highlighted specifically as a reminder to you. Most entrepreneurs don’t put enough effort into these phases. It should be obvious to you.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Both Sides of the Table

APRIL 17, 2012

You could argue that choosing the name “first round” paints them into a corner in case they want to ever do a late stage fund, but I suspect they named it FRC precisely because they wanted to excel at early-stage investing. IA Ventures – Roger Ehrenberg was doing angel investing before he became a VC.

Community 304

Community Los Angeles Startup Silicon Valley 304

Both Sides of the Table

SEPTEMBER 15, 2010

That’s our model.&# New entrants to the angel space should take notice.

Angel Investor 284

Angel Investor Early Stage Cap Table Deal Flow 284

Both Sides of the Table

OCTOBER 14, 2009

The final reason you might find board observers is where you have an investor on your board in an early round of investment and the later stage investors want to take the board seats. I’ll cover strategic investors in a different post. What on Earth could be wrong with giving board observer rights, they sound so harmless?

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215