Both Sides of the Table

JULY 22, 2010

I’m not sure I really even need to write this at length because Nivi absolutely nailed the topic in his article “ The Option Pool Shuffle.&#. When I went to raise money in 2006 I thought I knew every term in a term sheet but somehow I still got a bit duped by the option pool shuffle. No gotchas.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Rob Go

AUGUST 29, 2016

Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation. Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

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. How much is in the option pool?

Pre-Money Valuation 150

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

Agile VC

APRIL 17, 2011

Post-money valuation probably no higher than $12M (2). One can infer valuations based on per share prices of preferred stock and oustanding common shares (~5.3M Precise valuations are impossible to determine because of adjustments to employee option pools, possible buybacks of common stock, etc.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

The Equity Kicker

APRIL 10, 2015

From the perspective of existing investors the right way to calculate the valuation multiple is to compare the pre-money valuation of the new round with the post-money valuation of the last round, which is the same as the increase in share price. (As Venice Project'

Valuation 60

Valuation Pre-Money Valuation Post-Money Valuation Option Pool 60

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418