article thumbnail

Quick Post on Post-Money Valuations

Rob Go

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.

article thumbnail

Valuations 101: The Venture Capital Method

Gust

It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. The concept is simply…since: Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Valuation Methods 101

Gust

It is one of the most useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI. The Dave Berkus Method.

Valuation 174
article thumbnail

Why Entrepreneurs Should Be Generous With Investors

YoungUpstarts

As well as how to work with pre and post-money valuations. Generous is not a word often associated with talking about negotiations between startup entrepreneurs and their investors. It’s often more all about fearing how tough VCs are going to be with their term sheets and ‘standard’ clauses. Generosity is nowhere on their radar.

article thumbnail

Unintended Consequences: When SAFE and Convertible Notes Go Awry

Pascal's View

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.

article thumbnail

The $10 Million Photo and Other VC Stories

ReadWriteStart

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

article thumbnail

How to Talk About Valuation When a VC Asks

Both Sides of the Table

What was the post money on your last round (and how much capital have you raised)? It’s not uncommon for a VC to ask you how much capital you’ve raised and what the post-money valuation was on your last round. and “what was the post-money valuation of your last round?”

Valuation 324