Both Sides of the Table
SEPTEMBER 18, 2014
On the phone … Me: So, you raised venture capital? If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. We raised a seed round. Me: With a cap?
Both Sides of the Table
JULY 22, 2010
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.
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Both Sides of the Table
SEPTEMBER 25, 2010
Taking it from an investor perspective (not me, angels) I think it’s totally unfair to see early angels invest, take more risk, help you get to the next level through both sweat & money, and then pay a higher price because the round had a convertible note with no cap.
Both Sides of the Table
JULY 25, 2010
The key to this strategy is getting 5 people who form the social proof to help you get a bigger angel round done at a higher valuation by tons of industry insiders and thus offering the social proof you need attract great employees and ultimately venture capital investors. So what are you waiting for? Go get your anchors.
Both Sides of the Table
SEPTEMBER 28, 2014
Simply put – down rounds are very hard to achieve psychologically because insiders fight against them (rightly or wrongly) and outsiders have a mental gap that if your valuation is going down your company is forked up and they often just pass. On the other hand, exits at lower prices are easier with these providers of capital.
Both Sides of the Table
OCTOBER 12, 2014
” If you invested at $8m pre-money and put $2m in (thus you own 20% of a company at a $10m post-money valuation) and if you put another $2m into a round at a $40m valuation raising $10m ($50m post) you end up with half your money at $8m pre and half at $40m pre thus your average price goes up dramatically.
Both Sides of the Table
JUNE 5, 2011
I’ve been preaching the “don’t get ahead of your inherent valuation&# message for nearly 10 years. million post-money valuation with no revenue. We had companies pitching us that had almost no revenue at all and they were raising $10-15 million in capital at a $40-50 million pre-money valuation.
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