ReadWriteStart

SEPTEMBER 17, 2021

How can either of you confidently give a valuation of a business that doesn’t make money? So the more spoiled for choice you are when it comes to interested investors, the better terms you’ll be able to secure when negotiations eventually rear their ugly head. Greater Chance of Long-Term Success.

Startup 78

Startup Revenue Cofounder Angel Investor 78

Both Sides of the Table

MAY 13, 2013

Let’s assume $2 million in seed money. If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. It says if you want to make “real” money - quit. Get some famous angel or seed money.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Gust

SEPTEMBER 6, 2012

So, if I were just going to buy stock in your company today, we would agree on a valuation today, I’d give you the money today, you’d give me the appropriate percentage of the company’s stock, and we’d be all set. But that’s NOT what we’re doing.

Valuation 117

Valuation Equity Stock Angel Investor 117

Berkonomics

OCTOBER 15, 2015

There’s a common expectation among entrepreneurs that seed money from family is great – letting close relatives in at the ground floor. Don’t talk yourself into a high valuation for the first round of financing for any reason , even if your hair is on fire and the idea is worth billions.

Valuation 48

Valuation Startup Seed Money Early Stage 48

This is going to be BIG.

MARCH 23, 2015

About a year ago, I started hearing about the existence of a "pre-seed" round. The term "seed" implies the very beginning to me. If you can''t go to "seed" investors for your very first investment because you''re too early, that just seems weird to me. in seed money instead of $1.5M Why not raise $2.5M

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

Both Sides of the Table

APRIL 3, 2010

Chris Dixon provided some commentary on Twitter that he believes I missed “the most important point about fund size.&# He’s specifically referring to his point of view that entrepreneurs shouldn’t take seed money from “big VC’s&# (he defines them as > $100 million). We took the $500k.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Both Sides of the Table

AUGUST 1, 2010

They either do too many seed investments (for which they can spend no quality time with any) or they treat it as an option (“if you succeed come back and see us and we’ll match any term sheet you get&# ) – they view it as a sort of “right of first refusal.&#. Knowing What the Seed Funding Policy of your VC is.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

andrewchen.co

AUGUST 20, 2012

My reasoning looks something like this: Right now, startups with strong teams can easily raise seed funding ($200-$1.5M They can easily raise seed money because there’s a lot of willing investors in the ecosystem. Not sure how investors feel about it though, as valuations skyrocket and competition becomes fierce.

Seed Stage 51

Seed Stage Early Stage Mobile Seed Money 51

www.paulgraham.com

APRIL 28, 2010

It wasnt because they werent accredited investors that I didntask my parents for seed money, though. When we were starting Viaweb,I didnt know about the concept of an accredited investor, anddidnt stop to think about the value of investors connections.The reason I didnt take money from my parents was that I didntwant them to lose it.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

www.paulgraham.com

OCTOBER 23, 2010

You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term "engineer" for hackers), and then find after a year that youve spent two milliondollars to develop something no one wants. Usually you get seed money from individual rich people called"angels."

Startup 105

Startup Cofounder Software Stock 105

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario. Sure – it happens.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

This is going to be BIG.

SEPTEMBER 7, 2012

In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive. If you're doing seed deals, how often does a down round in a seed deal even happen? How many companies looked red hot at one time--Hashable, Dailybooth, Digg--not to make it in the long term.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99

www.businessinsider.com

SEPTEMBER 6, 2012

This Chart Shows Why VCs Are Willing To Give Hyped Startups Absurd Valuations. According to Graham, Google Ventures, a venture-capital firm backed by the tech giant, has systematically been offering to make seed investments in recent Y Combinator graduates, but only on substantially more favorable terms than other investors received.

Silicon Valley 54

Silicon Valley Startup Valuation Venture Capital 54

pandodaily.com

NOVEMBER 29, 2012

He helped coin the term, but it has been bastardized of late to mask failure. “It’s not the normal course of things, but you’re seeing a lot of companies raising second and third seed rounds,” First Round’s Josh Kopelman says. Startups are scrappy, and many turn to AngelList when the money runs out.

Technical Review 93

Technical Review Silicon Valley Incubator Syria 93