Lightspeed Venture Partners

SEPTEMBER 21, 2013

Despite having over 500k downloads and making $450k in revenue over the last 21 months, he had only $185k left in the bank, which meant that he would be out of business in 90 days if he didn’t raise more money. pre money valuation and planned to use the money to market the app. pre money valuation).

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

Both Sides of the Table

SEPTEMBER 29, 2009

Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million. Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. I argued for literally a year to slash burn.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

ReadWriteStart

OCTOBER 7, 2010

So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! But this mania to not miss out on the next big thing is driving some investors to pay growth-equity prices for traditional market risk (as in, they’re paying up before it is clear there is product / market fit). If you are interested the Vimeo is here. and profits!

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? If you are still losing money, skip ahead to the cost approach.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Lightspeed Venture Partners

OCTOBER 7, 2012

The first company started as a BBQ catering business, and eventually focused in on their most popular product, a dip made of blended up chicken plus various sauces. While they were very complimentary of the team and product, they all gave versions of the “I’m not the right guy to help, so I’m out” pass.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

FEBRUARY 15, 2016

In other words, raising $2 million at a $6 million pre-money valuation has always been easier & quicker than raising $20 million at any valuation. One is how reasonable your last round valuation was. There are two other factors you may consider.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? If you are still losing money, skip ahead to the cost approach.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? If you are still losing money, skip ahead to the cost approach.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

ithacaVC

JANUARY 14, 2014

I was giving some advice the other day on how to approach Series B investors in terms of valuation. Company X raised its Series A at a pre-money valuation of $5mm and it raised $4mm dollars. So the post-money valuation after the Series A was $9mm. It has just started to generate revenue.

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

Agile VC

MAY 26, 2011

Yes… he was a very successful PayPal exec and previously co-founder & VP Product of SocialNet. Not long after the product launch we began the initial conversations with VCs for a Series A round. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Lightspeed Venture Partners

OCTOBER 22, 2012

The company has gotten off to a fast start, $150k in revenue in the first two months, with all the marketing coming from social media. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). Neither is a desirable characteristic.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. The company came back and offered him 20% of the company for the $200k (an $800k pre money valuation). They were seeking $200k for 10% of the company (a $1.8M

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 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.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

The Startup Magazine

SEPTEMBER 12, 2019

Focus on Product Development First. Venture funding isn’t real validation – market traction and continued profitability and revenues are. We prioritized validation from our customers by listening carefully to what our customers wanted and focusing on early-stage product development. It certainly was for us.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

Berkonomics

NOVEMBER 4, 2016

There is a universal truth: fewer than one in a thousand start-ups meet or exceed their projected revenues in the periods planned. So how do you use financial projections as valuation metrics when you know the odds of those being accurate predictors of the future are so very unreliable? But a lot of time has passed since then.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

VC Cafe

SEPTEMBER 26, 2022

Before product-market fit… just care about speed of iteration according to your customer feedback. So in terms of hiring, get people that can help you build the product faster… anything that minimizes the time between observing a need or a problem, and the execution or the fix for it.” ValuatIon should be a function of value, not ego.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. Here is an example of a cap table after a round of funding, with a pre-money valuation of $1 million. percent going to Investor B, and 9.6

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.paulgraham.com

OCTOBER 23, 2010

During the Internet Bubble there were a number of startups founded by business people who then wentlooking for hackers to create their product for them. In nearly every failed startup, the real problem was that customersdidnt want the product. Probably because the product wasa dog, or never seemed likely to be done, or both.

Startup 105

Startup Cofounder Software Stock 105

dondodge.typepad.com

JANUARY 15, 2011

So they will give you a pre-money valuation somewhere around the amount you raise. from David Dalka - Creating Revenue and Retention - Chicago GSB MBA As discussed in my recent post about a TiE event on Chicago start ups, there are many factors to consider when taking in funding and employees. Most startups fail.

Equity 40

Equity Employee Dilution Valuation 40

Hippoland

AUGUST 31, 2018

Another consideration here is that in the minds of pre-seed investors (who are very often small funds and will be allocating most of their capital in the first round or two), valuation matters a lot more to them than a larger fund who might invest in you at this stage as an option for later. This is typically a $6-10m round.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

www.paulgraham.com

APRIL 28, 2010

Then you can gradually transformyourself from a consulting company into a product company, and haveyour clients pay your development expenses. There never has to be atime when you have no revenues. To be a startup, a company hasto be a product business, not a service business. No, not generally.A

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hippoland

AUGUST 31, 2018

Another consideration here is that in the minds of pre-seed investors (who are very often small funds and will be allocating most of their capital in the first round or two), valuation matters a lot more to them than a larger fund who might invest in you at this stage as an option for later. This is typically a $6-10m round.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

This is going to be BIG.

SEPTEMBER 7, 2012

Reality is that venture is a bunch of individual stories, individual assessments of teams, unique products, and a whole lot of stars lining up for particular companies for success to happen. In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99

www.currentlyobsessed.com

MAY 28, 2010

In one particular negotiation, we went from one valuation to a much higher valuation (like double) in the course of a single day and two phone calls, simply by discussing the “what if&# scenario about increasing the total amount raised. Entrepreneurs are generally too focused on pre-money valuation, and VCs know this.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. The right number to focus on is pre money valuation as that is how an investor is valuing the company before the investment. Post money valuation = Pre money valuation + Investment.

Pre-Money Valuation 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164