Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. First priority is real revenue, customers and contracts. Future revenue projections are not relevant at the pre-revenue stage.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Tim Keane

JANUARY 12, 2010

  I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] This results in a range of sale prices; in this example from $118.6MM to $21MM.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

OCTOBER 20, 2011

Individual accredited investors in typical angel deals put personal capital at risk for an equity share of growth-oriented, start-up companies. In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 The range of the data is from a low pre-money valuation of $0.8

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

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

VC Cafe

SEPTEMBER 26, 2022

Sustainable growth: Prioritise sales efficiency over growth at all costs. Startups must grow to be successful, but the recent months have shown that simply throwing money at growth is not the solution. ValuatIon should be a function of value, not ego. In times of uncertainty, be like Scrooge McDuck! Our goals, their goals.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. We had people hearing through the grapevine that we were about to raise money and new investors started calling us to get in on the deal. Many companies that were in the process of raising money did not. It quickly became impossible to raise venture capital.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

www.paulgraham.com

OCTOBER 23, 2010

The woman in charge of sales was so tenacious that I used to feelsorry for potential customers on the phone with her. Stephen Hawkings editor told him that every equationhe included in his book would cut sales in half. A 10% improvement in ease of use doesnt just increase your sales 10%. Its more likely to double your sales.

Startup 105

Startup Cofounder Software Stock 105

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. Venture Capital Funds VC firms are like seed firms in that theyre actual companies, butthey invest other peoples money, and much larger amounts of it.VC For example, VCs generally write it into the deal thatin any sale, they get their investment back first.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76