Startup Professionals Musings

NOVEMBER 26, 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 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Startup Professionals Musings

SEPTEMBER 30, 2011

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.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

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

In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. million pre-money valuation is now raising $1 million at a $12 million valuation the next investor has nowhere to go but up (or sit out the investment).

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

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

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

Startup Professionals Musings

SEPTEMBER 6, 2010

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 234

Valuation Pre-Money Valuation NPV Startup 234

Both Sides of the Table

FEBRUARY 15, 2016

The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. 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.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. The earlier you back a startup the more important this is likely to be.

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Gust

SEPTEMBER 27, 2014

One excellent way to do this (with a good bit of help from the experts), is to create a draft business plan using LivePlan from Palo Alto Software. If you share your material with a VC and get a polite response that you are out of their range, you should double check the investor’s profile page.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

BeyondVC

APRIL 12, 2005

Combine this relative value with the fact that many tech companies, particularly large software companies, derive 50-70% of their revenue from annual recurring maintenance and you have an opportunity to buy out many of these businesses due to their predictable cash flow. for a company then no public software company is sacred.

LBO 60

LBO Pre-Money Valuation Technical Review Software Review 60

Berkonomics

SEPTEMBER 27, 2018

The company made little effort to charge for the software or community. Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Three months later, another investor company in the business offered to invest $3 million at a valuation of $60 million.

Pre-Money Valuation 48

Pre-Money Valuation Sales Liquidity Event Valuation 48

Andrew Payne

MARCH 8, 2016

From a statistical analysis of over 6,000 startups, the paper (and article) argue (roughly) that founders with board control, the CEO position, or both, can “harm the firm’s prospects, reducing pre-money valuation by up to 22%.” ” Really?

Pre-Money Valuation 40

Pre-Money Valuation Founder Valuation Startup 40

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. Using software.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Berkonomics

SEPTEMBER 17, 2011

The company made little effort to charge for the software or community. Within three months, we easily obtained $3 million of investment at a pre-money valuation of $30 million. Three months later, another investor company in the business offered to invest $3 million at a valuation of $60 million.

Liquidity Event 59

Liquidity Event Pre-Money Valuation Sales Valuation 59

www.paulgraham.com

OCTOBER 23, 2010

I wanted to work in the pure, intellectual world of software, not deal with customers mundane problems. Some believe only businesspeople can do this-- that hackers can implement software, but not design it. But it turned outthey didnt like us, because our software was easy to use and we hostedthe site. Thats nonsense.

Startup 105

Startup Cofounder Software Stock 105

crowdSPRING Blog

APRIL 26, 2013

Q1 Venture Capital Spending & Number Of Deals Down, M&A Activity Drops 44 Percent And Pre-Money Valuations Plummet – [link]. Legal Contracts for Software Developers Who Hate Contracts (w/free contract template to use today) – [link]. Downfalls of Distributed Startups – [link].

Social Media 90

Social Media Small Business Design Media 90

www.paulgraham.com

APRIL 28, 2010

But of coursetheir main job is to build version 1 of their software. The friends might have liked to have more money in this first phase,but being slightly underfunded teaches them an important lesson.For a startup, cheapness is power. Software is not only moreconvincing, but a better way to explore ideas.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

dondodge.typepad.com

JANUARY 15, 2011

So they will give you a pre-money valuation somewhere around the amount you raise. Sounds strange, but it usually works out that if you are raising $2M the VCs will value your company at $2M pre-money, and $4M post money so they end up with 50% of the stock.

Equity 40

Equity Employee Dilution Valuation 40

Altgate

MAY 24, 2012

To estimate how much the founders and other insiders owned after each of the startup’s first three rounds of financing, we used the two major factors that affect dilution: the capital raised by the startup and the pre-money valuation it received. million, with a valuation of $10 million. As shown in Figure 9.5

Pre-Money Valuation 43

Pre-Money Valuation Cofounder Dilution Valuation 43

Startup Lessons Learned

JUNE 19, 2019

Probably the biggest change that I've noticed in the Valley is the transition from startups focusing on hardware, to startups built on software, and what that implies about the venture model as well. I’m sure you have unique perspective on that. You knew you could build what you set out to build. This wasn’t that long ago, right?

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159