Startup Professionals Musings

JANUARY 4, 2020

They know from forums such as Shark Tank on TV that asking for either too much or too little will derail credibility in the eyes of the investor, and leave the entrepreneur with no money and a struggling startup. On the other hand, venture capital organizations typically look for needs that exceed $2 million. Marty Zwilling.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Startup Professionals Musings

OCTOBER 7, 2022

They know from forums such as Shark Tank on TV that asking for either too much or too little will derail credibility in the eyes of the investor, and leave the entrepreneur with no money and a struggling startup. On the other hand, venture capital organizations typically look for needs that exceed $2 million. Marty Zwilling.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Both Sides of the Table

JULY 22, 2010

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. More likely what you’ll see if you have an aggressive term sheet is “participating preferred&# stock. It was accept the terms or go into bankruptcy so we took the money.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Hunter Walker

SEPTEMBER 29, 2022

Starting a venture capital blog post with 1970s country music lyrics is pretty uncommon, but so is writing about when and why an investor might choose to sell equity before the company exits. All the preferred stock is pari passu and behaving honorably in the best interest of the company?

Venture Capital 122

Venture Capital Cap Table LP Equity 122

YoungUpstarts

JUNE 26, 2020

by Rizwan Virk, author of “ Startup Myths and Models: What You Won’t Learn in Business School “. If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. I used to think a valuation was kind of like a stock price of a public company.

Finance 205

Finance Silicon Valley Valuation Startup 205

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.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

www.vccafe.com

MARCH 11, 2013

Startup Resources (Updated Mar 2013). Venture Capital Cafe > Startup Resources (Updated Mar 2013). VC & Startup Resources. Seed Startups. VC Cafe covers early stage Israeli and European tech & mobile startups. Hundreds of startups featured since 2005, will yours be next? About VC Cafe.

Software Review 53

Software Review Technical Review Startup 53

David Teten

AUGUST 19, 2019

I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. I believe that Revenue-Based Investing (“RBI”) VCs are on the forefront of what will become a major segment of the venture ecosystem. Should Private Startups Be Issuing More Bonds? Alternative Capital Summit.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

Gust

MAY 24, 2012

As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Startup Company Lawyer

AUGUST 31, 2012

Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds. ” As a result, Ted introduced the Series Seed preferred stock documents as an alternative to convertible debt for early stage investments.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

Startup Professionals Musings

SEPTEMBER 26, 2015

Perhaps they're way off in their valuation (usually far too high), or paralyzed by fear at seeing the other terms, because they have no idea what's normal, and what's worth a fight to the death (their startup's). In very early startups, which have no valuation, the term sheet may specify a convertible note.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120

Startup Professionals Musings

MARCH 11, 2013

If you aren’t so sure, need something fast, or need to keep your costs low, then an LLC is the best legal and taxable entity to facilitate your startup. Incorporate your startup after the business plan, but before you spend a dollar on product development. Every startup business needs annual tax return coverage.

LLC 234

LLC Nevada Delaware Limited Liability Company 234

www.quora.com

JANUARY 16, 2011

Find Questions, Topics and People Add Question Add Question Venture Capital Venture Capital Term Sheets Startups Term Sheets What are examples of good startup term sheets? The BVCA (British Venture Capital Association) docs are here, with a link to a term sheet [link] ets/fea. org/2009/02.

Term Sheet 41

Term Sheet Startup Angel Investor Wiki 41

ReadWriteStart

APRIL 7, 2011

Since 2002, the law form of Fenwick & West has conducted a venture capital survey, a response to "the burst of the 'dot-come bubble' and a desire to provide the entrepreneurial community with objective information about the status of the venture environment." The median amount raised in preferred stock financings was $1.1

Preferred Stock 115

Preferred Stock Silicon Valley Seed Stage Venture Capital 115

Scott Edward Walker

JUNE 9, 2019

Accordingly, I thought it would be helpful for founders to discuss these rights and to point out the problems they create for startups. Pro Rata Rights. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

VC Cafe

OCTOBER 23, 2010

B ack in March, Andreessen Horowitz and Fenwick & West, LLP published a series of documents that would help structure early stage investments in startups. Preferred Stock Purchase Agreement Series Seed Form SPA. The documents have since been used in many deals already according to the site, SeriesSeed.

Early Stage 79

Early Stage Term Sheet Preferred Stock Equity 79

Scott Edward Walker

APRIL 9, 2012

Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. ii) why are convertible notes issued instead of shares of common or preferred stock?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Both Sides of the Table

JULY 25, 2011

When I first started as a startup CEO in 1999 there were no guides on raising venture capital. To this day I’m still surprised how few CEOs really understand the differences between 2x liquidation preference and a liquidation preference with a 2x cap. Every startup needs the knowledge in this book.

Liquidation Preference 304

Liquidation Preference Term Sheet Cap Table Participating Preferred 304

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. If you don’t, please educate yourself on this site, Venture Hacks and the term sheet series by Brad Feld/Jason Mendelson, among other places.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Up and Running

MAY 23, 2016

To give you a better idea of what entrepreneurs in this industry are thinking about during each phase of the startup process, I interviewed SaaS entrepreneurs from all over the world, including our own COO Noah Parsons. Eric Ries, a Silicon Valley entrepreneur and author of The Lean Startup, popularized this strategy for web applications.

Software Review 74

Software Review Software Delaware Forecast 74

Startup Professionals Musings

MARCH 7, 2015

They know from forums such as Shark Tank on TV that asking for either too much or too little will derail credibility in the eyes of the investor, and leave the entrepreneur with no money and a struggling startup. On the other hand, venture capital organizations typically look for needs that exceed $2 million.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage. From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Sometimes the consultant has a reasonable basis to think this, since lean startups are programmed to get things for free and may call on the consultant from time to time for free advice. Venture Capital.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Both Sides of the Table

MARCH 21, 2010

This is part of my ongoing series on Startup Advice. As startup entrepreneurs we all want to work with them because having their name as reference clients makes it so much easier for marketing, PR, selling to other customers, fund raising and even recruiting. Make the warrants for common stock and not preferred stock.

Warrant 298

Warrant Dilution Startup Stock Options 298

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? November 2005 Venture funding works like gears. A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. Apply for funding by March 3.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

K9 Ventures

MAY 14, 2011

The companies go through a 3-6 month long startup bootcamp and then typically try to raise angel/seed funding. Angels : Angels are individual investors, who are investing their own capital and doing so on a part-time basis. At first blush, uVCs acting more like institutional venture capital funds may be considered a bad thing.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

abovethecrowd.com

FEBRUARY 24, 2015

Despite this, startups commonly highlight “gross revenue” even when 80+% goes out the door for every single transaction. Most private company financings involve the use of preferred stock with liquidation preferences. These liquidation preferences give the investor a debt-like downside protection.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

The Startup Lawyer

JUNE 22, 2010

If you follow this blog, you know that I think convertible debt is a good structure for a startup’s angel round. For this article, let’s assume this equity is the Series A Preferred Stock purchased by a venture capital fund. of the startup immediately after the Series A round.

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success.   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.] TrackBack URL for this entry: [link].

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Lawyer

MARCH 1, 2010

The drafters are “open sourcing&# the documents so that they may be continually improved by the startup community. The board is set up to consist of 3 directors: 1 director elected by the common (founders); 1 directors elected by the preferred (investors); 1 “independent&# director (i.e., Check out the docs here.

Preferred Stock 79

Preferred Stock Term Sheet Redemption Registration Rights 79

Startup Company Lawyer

MARCH 12, 2009

Almost all technology startup companies that I work with are C corps. Any company that raises venture financing will need to be a C corp in order to issue preferred stock. Such inflexible features are typically unattractive to venture investors. citizen/resident stockholders. Governance/Structure.

LLC 61

LLC Stock Options Preferred Stock Stock 61

Gust

AUGUST 6, 2014

25 individual angel investors funding a startup on a convertible note. two angel groups investing money in Series Seed Preferred stock purchase. a single venture capital fund putting in the full amount as Series A Convertible Preferred investment. original post can be found on Quora @ [link] *.

Term Sheet 170

Term Sheet Lead Investor Preferred Stock Common Stock 170

Growthink Blog

APRIL 7, 2010

million from three individual angel investors and one early-stage venture capital fund. For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing.

Angel Investor 54

Angel Investor Preferred Stock Venture Capital Common Stock 54

Both Sides of the Table

AUGUST 30, 2010

Funnily enough I just answered this question yesterday on Quora when somebody asked, “Why would an early-stage investor specifically NOT prefer a convertible note structure to straight equity (e.g. a priced/valued preferred stock financing)?&#. Tags: Raising Venture Capital Startup Advice.

Equity 319

Equity Early Stage Angel Investor Valuation 319

Growthink Blog

MAY 10, 2012

If it's not your plan to get venture capital down the road, then you'll probably stop in Stage 2-receiving enough funding to boost your marketing, sales, and infrastructure to grow organically from there to the point where you are satisfied or ready to sell. Each round may raise between $5 million and $20 million or more.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertible security ” rather than “convertible promissory note.” These deal terms are simple but significant.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

The Startup Lawyer

MARCH 1, 2010

The drafters are “open sourcing&# the documents so that they may be continually improved by the startup community. The board is set up to consist of 3 directors: 1 director elected by the common (founders); 1 directors elected by the preferred (investors); 1 “independent&# director (i.e., Check out the docs here.

Preferred Stock 40

Preferred Stock Term Sheet Redemption Registration Rights 40