Both Sides of the Table

AUGUST 8, 2009

Your friends and advisers tell you that this means you need revenue because in this economy VC’s will only fund businesses with revenue. So if it’s not necessarily revenue that’s preventing an investment, then WTF is traction? Unfortunately your advisers are wrong. Update them on your fund raising progress.

Technical Review 309

Technical Review Term Sheet Venture Capital Revenue 309

YoungUpstarts

OCTOBER 12, 2017

Many of these companies are pre-revenue and in the cash burn stage as they try to establish their technology and market. If there is insufficient cash, then the company should have a plan to obtain sufficient capital. by Michael Gallaher, Audit Associate at Sensiba San Filippo .

San Francisco 133

San Francisco Forecast Early Stage Term Sheet 133

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. It is essential to understand the funding structure stated in your term sheet and the advantages and disadvantages it may have for your business. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

This is going to be BIG.

MAY 5, 2023

It will be the 105th deal out of Brooklyn Bridge Ventures, the firm I started back in September 2012, and it will be the last deal I’ll be making out of my third fund. It will also be my last venture capital deal. For me, I don’t mind sharing how I think about it.

Later Stage 218

Later Stage Venture Capital Term Sheet Limited Partner 218

This is going to be BIG.

SEPTEMBER 30, 2012

How else can you explain this headline matching a story about a professional social network still trying to explore revenues raising $17mm on an $80mm valuation? This is a company that, according to the article, got term sheets from half of the VCs that expressed interest in the company. Perhaps I need to rethink that.

Venture Capital 114

Venture Capital Marketing Term Sheet Software Review 114

View from Seed

SEPTEMBER 4, 2018

As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. As seed funds have raised larger and larger funds, more have developed the muscle around issuing term sheets and “leading”. And by early, we mean pre-traction.

North America 120

North America Seed Stage Early Stage Lead Investor 120

The Next Web

SEPTEMBER 13, 2013

The venture capital landscape in Asia is varied and complex, as most of the active firms on the continent are concentrated in just a few areas. The term sheets tend to be fairly standardized and straightforward as well. Term sheets are littered with many more obscure protective provisions and onerous terms.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

MAY 13, 2018

If an investor isn’t engaging then they’re not suddenly going to get a term sheet. For simplicity I’ll assume you’ve raised some money from angels or seed investors and you’re either raising an A round or a B round of venture capital. You can short-hand this as “engagement.” these are simply guidelines.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

www.bothsidesofthetable.com

MAY 13, 2012

Raising Venture Capital. My company never became Google but at $14 million in recurring revenue and $36 million in backlog revenue we certainly had enough big clients to necessitate a very solid program management function. Raising Venture Capital (12). Term Sheets (1). Start-up Advice.

Fractional VPE 89

Fractional VPE Part-Time VPE Fractional CTO CTO Hire 89

Both Sides of the Table

DECEMBER 14, 2010

They had received a term sheet from a VC and were wondering whether to work with this firm. I often tell people that raising venture capital is more difficult than getting married. Not so in venture capital. But what about once you have a term sheet? You’re tied at the hip to your VC.

Term Sheet 298

Term Sheet Venture Capital Stealth Cofounder 298

Steve Blank

JANUARY 4, 2010

Now with customers and early revenue, it was out raising its first round of venture money. Staring at us in the board meeting were three term-sheets from brand name VC’s and an unexpected buy-out offer from Google. Lets take venture capital and grow this thing into a real business.”. The Scalable Startup.

Hockey Stick 284

Hockey Stick Venture Capital Startup Cofounder 284

This is going to be BIG.

OCTOBER 10, 2014

That also includes 16 Brooklyn Bridge Ventures deals done and five agreed to term sheets. What about if you have some revenues? No Revenues. However, having revenues does seem to make a big difference in the Pre-Money price. No Revenues. Yes, for sure, especially with revenues. No Revenues.

Pre-Money Valuation 146

Pre-Money Valuation Dilution Valuation Term Sheet 146

The Next Web

FEBRUARY 27, 2014

As an example, a new restaurant may get valued at 3-4x EBITDA (earnings before interest, taxes, depreciation, and amortization) and a hot dot com business with meteoric traffic growth could get valued at 5-10x revenues. revenue, cash flow or net income multiples from recent M&A transactions in your industry.

Valuation 167

Valuation Forecast Seed Stage .Net 167

Steve Blank

APRIL 9, 2009

And it was going to mention the two words that SuperMac marketing needed to live and breathe: revenue and profit. If marketing can’t deliver the 40,000 leads what else can we do for sales to still achieve our revenue and profitability?”) They understood the mission intent was our corporate revenue and profit goals.

Silicon Valley 263

Silicon Valley Technical Review RSS PR 263

Rob Go

SEPTEMBER 4, 2018

As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. As seed funds have raised larger and larger funds, more have developed the muscle around issuing term sheets and “leading”. And by early, we mean pre-traction.

North America 36

North America Seed Stage Early Stage Lead Investor 36

Both Sides of the Table

APRIL 14, 2012

You’ve found yourself in a super hot category and – let’s face it – it’s still a very frothy venture capital funding market so you may have loads of VCs chasing you. At least for a couple of years until you’ve grown into your new valuation / made enough revenue / captured enough customers / etc.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

abovethecrowd.com

NOVEMBER 28, 2022

As the bull market raged on from 2015 to 2022, it became quite trendy for venture capitalists to wave the requirement for an annual audit which is embedded in almost every standard Series A term sheet. The post Venture Capital Red Flag Checklist appeared first on Above the Crowd.

Venture Capital 113

Venture Capital Non-Compete Government Delaware 113

Startup Professionals Musings

AUGUST 3, 2015

As they say, you only get one chance to make a great first impression, so don’t pitch to a key angel group or venture capital team for practice. Follow up to learn expected terms and process time. Practice with advisors and friendly investors before tackling the big guns. Don’t be a total unknown to every investor in a meeting.

Cost 120

Cost Angel Groups Due Diligence Silicon Valley 120

Haystack

SEPTEMBER 1, 2018

A company is starting to get its sea legs, they’re booking revenues and growing, and they raise a hefty seed round of, say, $3M-ish dollars. Those founders can often choose from a few term sheets. I’ve seen this pattern pop up a few times. In today’s funding environment, these kinds of rounds are quite common.

Burn Rate 76

Burn Rate Term Sheet Acquisition Revenue 76

Both Sides of the Table

FEBRUARY 25, 2010

We had many term sheets (it was 1999 and we had a pulse) and we were deciding which one to take. We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. We ended up agreeing a term sheet for $16.5 6 weeks’ later he didn’t have other term sheets.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Steve Blank

APRIL 1, 2020

Your revenue plans are no longer valid. What’s your monthly cash burn at your new low revenue level? The CEO should dial through as many of the largest existing customers to get a firsthand understanding of the magnitude of any revenue shortfall. Some VC’s are walking away from signed term sheets.

South Korea 333

South Korea Salary Business Model China 333

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

SEPTEMBER 2, 2009

We should end the year with a few million in fully recurring revenue and we’re projected to double next year. But more spend = more viral opps = more revenue down the road. >50% of our revenue in now viral. Many term sheets ensued. I had that against the backdrop of several term sheets.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . Founders are often disadvantaged in their negotiation vs. investors because they’re less familiar with the long-term implications of different structural options.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

K9 Ventures

OCTOBER 10, 2017

I’ve been an avid reader of Dan’s Term Sheet while he was at Fortune , and now Pro Rata at Axios. You see, Dan knows more about venture than most people; and if Dan isn’t aware that “pre-seed is a thing,” then I haven’t done a good enough job of explaining to the world what I and K9 do! Series A is the new Series B. (~6M-$15M

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Startup Professionals Musings

MARCH 12, 2023

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

Eric Friedman

AUGUST 18, 2021

I lovingly call him the curmudgeon of fintech – in this episode we go deep into how he is building a venture capital firm and practice, not just running a fund and how he views the world of fintech investing. One of the ones that really bothers me is how Venture Capitalists try and conflate what they do as being complicated.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

reidhoffman.org

NOVEMBER 12, 2013

Neither is a particularly good backdrop for trying to raise capital, because. we had no revenue. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between 0 and 2 deals. Investors see a lot of pitches.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Altgate

JANUARY 21, 2010

Open source is the wrong term though; instead is probably better to say automate since LegalZoom and others are doing the same thing but commercially. I think this is great for end users both personal and professional, but I think it is going to seriously erode legal industry revenue in the long term.

Open Source 33

Open Source Term Sheet HTML Venture Capital 33

Pascal's View

NOVEMBER 15, 2011

Dan Primack posted an article in Term Sheet last week titled Yelp This: IPO Market Is Killing It. equity capital markets for emerging growth companies with market capitalizations below $500 million are structurally broken and systemically dysfunctional. ” In my view, it is all about structure– the U.S.

IPO 31

IPO Term Sheet Marketing United States 31

Berkonomics

DECEMBER 17, 2020

You will be given a “term sheet” during the process, calling out the terms proposed for the investment. These terms have become much more homogenized over the years, with many organizations adopting the same general form and terms offered to new investments. Then there is venture capital.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Startup Professionals Musings

JUNE 13, 2020

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

Steve Blank

NOVEMBER 5, 2009

A Progress Graph on the right visually shows how far you’ve come (in whatever units of goodness you’re tracking – revenue, units, users, etc.) Good if you have your own money, better if the cash comes from investors, but best if it’s revenues from customers. Get back up and running.

Customer Development 264

Customer Development Developer Customer Silicon Valley 264

Professor VC

JUNE 20, 2011

But of course, the model had us requiring only $10M equity to breakeven and to achieve $185M in revenues in 2008 (the magic Year 5 in all business plans). At this time, we had secured a term sheet from a co-investor from one of my other angel investments (Thanks, Graeme!) The Most Important Venture Capital Statistic.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. About this same point in time, the journalists that focus specifically on the venture capital industry noted something quite profound. The Sharks Arrive With Dirty Term Sheets.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Revenue per customer? Revenue, Gross Margin?

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429