Gust

NOVEMBER 2, 2011

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. He has invested in more than 70 startup ventures. Add to Pre-money Valuation. If present, then Dave’s valuation is sound.

Valuation 79

Valuation Pre-Money Valuation Intellectual Property Southern California 79

Both Sides of the Table

SEPTEMBER 10, 2021

how on Earth could the venture capital market stand still? One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued? So in our earliest stages we’re about 70% seed and 30% pre-seed.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

JULY 23, 2014

There has been much discussion in the past few years of the changing structure of the venture capital industry. The rise of alternative sources of capital (crowd funding and the like). We are in a bubble (with so many private $1bn+ valuations). On the surface the narratives have been. Where are we today?

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Both Sides of the Table

MAY 28, 2018

Every VC knows that the amount you raise is often a proxy for your valuation. So when you say $8–10m is your goal and you aren’t at all thinking about your valuation know that a VC hears “$24–40 million pre-money valuation expectations.” This part of a series to help you raise venture capital ?—?the

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. Takeaway lesson: A shocking number of technology startups never even get their first product out the door.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

SoCal CTO

FEBRUARY 2, 2011

They might have some seed money and are thinking or raising a Series A based on success of an early release (MVP). Because of this, I've always tried to stay up-to-speed on how early-stage investors look at valuation of companies. Bill Payne is an expert on how early-stage investors should look at valuation. is a requirement.

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

View from Seed

SEPTEMBER 14, 2021

Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Was this a lost decade for venture capital? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   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.]

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Altgate

DECEMBER 16, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Pre-Money Valuation vs Number of Founders Where Do Tech VCs Invest? But first, let’s look at pre-money valuation by liquidation preference.

Liquidation Preference 39

Liquidation Preference Pre-Money Valuation Term Sheet Valuation 39

Both Sides of the Table

APRIL 20, 2011

In the early 80’s he left academia to work on venture capital investing with Jim Simons, Renaissance Technologies. The discussion with Howard Morgan starts off by acknowledging Josh Kopelman as a co-founder of First Round Capital. First Round Capital’s pre-money range is usually between $3-5 million.

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

View from Seed

SEPTEMBER 14, 2021

Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Was this a lost decade for venture capital? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

David Teten

SEPTEMBER 16, 2014

That’s a sizeable amount, especially in comparison to the US venture capital industry, which similarly invests over $20 billion annually. In 2013, 298,800 angels invested in 70,730 entrepreneurial ventures, according to the 2013 Angel Market Analysis by the Center for Venture Research at the University of New Hampshire.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. 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. Organization.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

Both Sides of the Table

APRIL 14, 2010

If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. It is 2010. But pass they will. Brain damage. Reputation. Take liquidation preferences head on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

This is going to be BIG.

JULY 30, 2015

You incorporate expected company returns, mortality rates, and fee structures to try to predict how a venture capital fund works from a cash in, cash out, and NAV standpoint. And no, the numbers don't exactly add up--but they're more than close enough for venture capital. It's also not the "average fund". How about price?

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

View from Seed

SEPTEMBER 14, 2021

Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Was this a lost decade for venture capital? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

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 Scorecard Valuation Methodology. million for pre-revenue companies.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

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. Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” Team strength and experience is value.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Jason Ball

SEPTEMBER 28, 2010

Don’t sweat the valuation too much. If this is your first start up, you’re not going to get a great multi-million dollar pre-money valuation, nor a lot of cash up front. Raise the biggest amount of money you possibly can to execute as quickly and at as large a scale as you possibly can. Be like Jack.

Pre-Money Valuation 34

Pre-Money Valuation Valuation Dilution Venture Capital 34

This is going to be BIG.

OCTOBER 10, 2014

The criteria for what is a Seed and what is a Series A for these purposes is whether or not the first round of the company was within the same year that I did the investment, and it had to be less than $750k of prior money. Well, if you group them all up, here''s what you get: Pre-Money Valuations (M). Not Launched.

Pre-Money Valuation 146

Pre-Money Valuation Dilution Valuation Term Sheet 146

Both Sides of the Table

FEBRUARY 4, 2016

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. They point to some widely known facts: financings & valuations are up massively over the past 7 years and non-VC money has entered the system.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

The Startup Magazine

SEPTEMBER 12, 2019

Most startups view venture capital funding as a blessing from above — eager to take it as soon as they can get it. Tempted by large sums of money and the perceived validation that comes along with being funded, founders turn to venture capitalists to accelerate their company’s growth. It is a luxury, but also a danger.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

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

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

The Startup Lawyer

JUNE 22, 2010

For this article, let’s assume this equity is the Series A Preferred Stock purchased by a venture capital fund. For example, if a venture capital fund purchases Series A Preferred Stock at $1.00 The main drawback is the quirk that the lower your pre-money at Series A, the more equity your angel investor gets.

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Professor VC

JANUARY 17, 2008

If my math is correct, this is approximately a 31% IRR, which has to beat individual angel investments on aggregate and venture capital returns over the period of the study (1990-2007). Another comment which probably deserves more discussion is around valuation. return on investment after 3.5

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

David Teten

FEBRUARY 9, 2015

I’ve listed below the points I recommend you cover when pitching your business to early-stage investors, including but definitely not limited to ff Venture Capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.”

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60

YoungUpstarts

SEPTEMBER 11, 2013

Sometimes the list of challenges may feel never ending – from writing the business plan to finding the right partner – but one of the single most important challenges entrepreneurs face is calculating a realistic, defensible pre-money valuation. . What is a pre-money valuation and why should I care?

Pre-Money Valuation 133

Pre-Money Valuation Valuation Angel Investor Cofounder 133

The Startup Lawyer

JANUARY 10, 2011

There’s a lot of advice about (1) how to attract VCs, and (2) how to negotiate a venture capital term sheet. While progressive discussions with an investor about the investment are fine and most revolve around pre-diligence matters, sometimes these discussions shift towards the pre-money valuation and investment amount.

Term Sheet 64

Term Sheet Pre-Money Valuation Liquidation Preference Option Pool 64

Altgate

OCTOBER 18, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Startup Executive Compensation Scorecard Pre-Money Valuation vs Number of Founders → No one wants to tell you your baby is ugly Posted on October 18, 2010 by admin No one wants to tell you your baby is ugly.

Pre-Money Valuation 59

Pre-Money Valuation Venture Capital Valuation Lean 59

Gust

OCTOBER 21, 2011

What these approaches have in common is that they cap the investors’ upside such that even in the most spectacular of liquidity events, unless the notes convert to equity first at a lower valuation, angels don’t get anywhere near the payoff awarded to equity holders. Most would agree this is not a fair outcome.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

VC Cafe

SEPTEMBER 26, 2022

ValuatIon should be a function of value, not ego. Kawasaki’s Law of Pre-Money Valuation: for every full-time engineer, add $500,000; for every full-time M.B.A., But valuations, especially those in the private market, are not necessarily a predictor of growth/ success. Our goals, their goals. subtract $250,000.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Pascal's View

AUGUST 21, 2011

Welcome to the latest passionate debate over the ‘valuation bubble or not?’ question in venture capital. This time, the debate centers on the “favored few” Social Media venture backed companies that have brought tremendous windfalls to a select group of venture funds and management teams, both pre- and post-IPO.

Valuation 50

Valuation Social Media Media IPO 50

BeyondVC

APRIL 12, 2005

Therefore, it remains quite difficult for the larger funds to dole out money in $2-4 million chunks, and the valuations are quite attractive at this stage. As the VC funds get larger and larger, they are under increasing pressure to put more dollars to work in every deal.

LBO 60

LBO Pre-Money Valuation Technical Review Software Review 60