Gust

OCTOBER 12, 2011

To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies. Current Average.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

Gust

NOVEMBER 18, 2012

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

MAY 15, 2015

After all, they just read in TechCrunch that investors funded a company similar to theirs at an $8 million pre-money valuation! The valuation of startup companies shouldn’t be impacted by location, should they? Guess again! A Read more >.

Pre-Money Valuation 70

Pre-Money Valuation Silicon Valley Valuation Startup 70

Gust

MAY 15, 2015

After all, they just read in TechCrunch that investors funded a company similar to theirs at an $8 million pre-money valuation! The valuation of startup companies shouldn’t be impacted by location, should they? Guess again! A Read more >. The post Why Does Startup Pricing Vary by Location?

Pre-Money Valuation 70

Pre-Money Valuation Silicon Valley Valuation Startup 70

Gust

OCTOBER 17, 2011

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Gust

OCTOBER 20, 2011

This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. In most regions, the pre-money valuation does not vary significantly from one business sector to another.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

SEPTEMBER 27, 2014

These can be based on things like location (some only invest in a particular country or state), industry (a Life Science fund is simply not going to invest in a new social network for real estate agents), or valuation (a seed fund will not usually invest in a company that is advanced enough to warrant a $10m pre-money valuation), etc.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Gust

APRIL 11, 2014

Suppose it raises $2 million at a $6 million pre-money valuation. The simplest illustration is the first VC funding round of a new startup. Before, it might have net assets that are near zero.

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Gust

OCTOBER 21, 2011

(i) Preferred Stock (if a Preferred Financing is pending at the time of the transaction) or, (ii) if no Preferred Financing is pending, to Common Stock at a price per share equivalent to a fully diluted pre-money valuation of $3 million, to be paid in the same form of consideration (e.g.,

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

OCTOBER 12, 2011

First, a word about the maturity date. In my experience, a term of 12 to 24 months is common, with 12 months being on the short end. Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107