Genuine VC

APRIL 29, 2013

all talk about the best way for entrepreneurs to optimize their fundraising process with the end-goal of receiving a term sheet. It’s often spoken as if the second that magical term sheet document is in hand, the process is over. Some VCs merely view term sheets as “marketing documents.”

Term Sheet 150

Term Sheet Valuation Partner Conversion 150

Both Sides of the Table

SEPTEMBER 25, 2010

With sufficiently lightweight standardized equity terms (and some changes in investors’ and lawyers’ expectations about equity rounds) you might be able to do the same thing with equity instead of debt. Either would be fine with startups, so long as they can easily change their valuation. I agree on all points.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Both Sides of the Table

MARCH 3, 2012

The truth is that I wasn’t as valuation sensitive as my original VC partner was and I would have been willing to raise price. Had he not heard about our commitment it’s not clear whether he would be rushing to submit a term sheet. But for me I care too much about my long-term reputation. ” I disagreed.

Term Sheet 356

Term Sheet Silicon Valley Reputation Partner 356

Agile VC

MAY 26, 2011

This also appears as a guest post at Fortune’s Term Sheet. At the end of the process, which ran into the fall of 2003, we received term sheets from two firms and had a third which expressed interest in participating though not leading the round. It was a pretty good valuation for the time. May 26, 2011.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Berkonomics

MAY 15, 2014

A good example was during the negotiation of a term sheet. These usually involve a handful of angel investors, and a few entrepreneurs, who all want to build the very best term sheet for their exciting nascent enterprise. Very often, the initial opinions of the people around the table are radically different.

Term Sheet 91

Term Sheet Angel Groups Angel Investor Deal Structure 91

ReadWriteStart

JUNE 1, 2020

It is essential to understand the funding structure stated in your term sheet and the advantages and disadvantages it may have for your business. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Point number 3: Never raise money with an increased valuation.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Feld Thoughts

DECEMBER 28, 2010

On the heels of all the noise around Groupon’s $ 100m financing at a $7.5b (billion) post valuation, I thought I’d put out a call for “old VC term sheets – prior to 1990.&#. The basis for the book comes from the Term Sheet series that Jason and I wrote on this blog in 2005.

Term Sheet 118

Term Sheet Search Finance Valuation 118

Tim Keane

MAY 16, 2010

A philosophy of valuations and term-sheets. Several months ago, I'd posted an article about term-sheets.  A Philosophy of Valuation and  Term Sheet Calcs   the accompanying spreadsheet.  A philosophy of valuations and term-sheets.

Term Sheet 60

Term Sheet Valuation Wisconsin Angel Investor 60

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. Both sets of advice tend to ignore the gap between an investor’s expression of investment interest and your startup’s receipt of the term sheet.

Term Sheet 64

Term Sheet Pre-Money Valuation Liquidation Preference Option Pool 64

The Next Web

FEBRUARY 15, 2015

If you haven’t read the first part on equity term sheets, I strongly recommend doing so before moving on. For a general introduction to term sheets and the trade-off between high valuation and complex investment structure, please refer to the introductory post to the guide.

Term Sheet 60

Term Sheet Equity Liquidation Preference Valuation 60

Early Growth Financial Services

MARCH 13, 2014

getting the first term sheet can be a critical milestone in nurturing a successful business. Things to keep in mind: Anticipate investors’ concerns and information requirements; Be aware of the pitfalls; remember that all agreements are Conditional, with the terms subject to change. What is a term sheet?

Term Sheet 55

Term Sheet Equity Valuation Founder 55

The Next Web

FEBRUARY 7, 2015

In the introductory post to my term sheet guide, we covered a general introduction to term sheets and the trade-off between high valuation and complex investment structure, as well as focused on the basics of a convertible loan. Andrej Kiska is an Associate at Credo Ventures.

Term Sheet 60

Term Sheet Equity Valuation Web 60

Scott Edward Walker

SEPTEMBER 14, 2011

Introduction This post originally appeared in the “ Ask the Attorney ” column I am writing for VentureBeat ; it is part of my ongoing series regarding venture capital term sheets. The Investors’ Right to Walk VC Term Sheets Are Non-Binding. VC Term Sheets Are Conditional.

Term Sheet 76

Term Sheet Due Diligence Liquidation Preference Redemption 76

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. The term sheets tend to be fairly standardized and straightforward as well. Valuations are based more on typical later-stage type of metrics.

Asia 132

Asia Silicon Valley India Term Sheet 132

View from Seed

AUGUST 17, 2021

90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Effective post money is the effective valuation of an investor’s dollars at any one time. Also, being too dogmatic isn’t very fun J. What matters is effective post-money at exit. We think about this a lot too.

IRR 205

IRR Dilution Founder Portfolio 205

The Next Web

APRIL 6, 2013

The five suggestions below are designed to help facilitate the investment process which may lead to a more expeditious term sheet and teach entrepreneurs to think more like an investor. You will more likely be in the drivers’ seat on valuation, thus control when your company is not actively seeking additional investments.

Term Sheet 126

Term Sheet Due Diligence Strategic Investors Valuation 126

The Startup Lawyer

AUGUST 24, 2010

Just like the preferred equity financing process, the convertible debt financing process can start with a term sheet, rather than a full set of financing documents. Here are terms that are typically found in a convertible note term sheet: Amount of the Offering : How much capital can the startup raise via the convertible debt offering?

Term Sheet 62

Term Sheet Pre-Money Valuation Liquidity Event Warrant 62

YoungUpstarts

SEPTEMBER 20, 2019

It’s often more all about fearing how tough VCs are going to be with their term sheets and ‘standard’ clauses. As well as how to work with pre and post-money valuations. Generous is not a word often associated with talking about negotiations between startup entrepreneurs and their investors. Generosity is nowhere on their radar.

Technical Cofounder 127

Technical Cofounder Entrepreneur Cofounder Post-Money Valuation 127

YoungUpstarts

OCTOBER 28, 2015

Investors typically negotiate from a term sheet, which if not handled properly can create problems that can hurt or kill the startup’s chances when they do their Series A round of funding. “And if you have a valuation cap; a higher cap is always better than a lower cap.” ” The Cost of Financing.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

View from Seed

AUGUST 17, 2021

90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Effective post money is the effective valuation of an investor’s dollars at any one time. Also, being too dogmatic isn’t very fun J. What matters is effective post-money at exit. We think about this a lot too.

IRR 156

IRR Dilution Founder Portfolio 156

ReadWriteStart

SEPTEMBER 2, 2011

Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. This will give you tons of information on all the terms you'll encounter when raising a venture round and how they could impact your deal. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Scott Edward Walker

JULY 7, 2011

Introduction This post originally appeared in the “ Ask the Attorney ” column I am writing for VentureBeat ; it is part of my ongoing series regarding venture capital term sheets. Moreover, there are significant restrictions under applicable State law regarding redemptions if the company does not have the legally-available capital.

Term Sheet 49

Term Sheet Redemption Venture Capital Preferred Stock 49

View from Seed

APRIL 30, 2015

” Venture debt gives you those options, and particularly for companies that wind up doing well, then on your same cash-out date, you’d likely have achieved a better milestone thanks to fueling your spend, which would translate into a better valuation. In terms of negotiation, there are always hot buttons.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

View from Seed

AUGUST 17, 2021

90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Effective post money is the effective valuation of an investor’s dollars at any one time. Also, being too dogmatic isn’t very fun J. What matters is effective post-money at exit. We think about this a lot too.

IRR 136

IRR Dilution Founder Portfolio 136

Rob Go

AUGUST 29, 2016

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. That is, the valuation of the company prior to the investment of new capital. Today, nearly all early stage term sheets I see are expressed as post-money valuations.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Gust

FEBRUARY 19, 2014

Virtually every investor and serial entrepreneur I know will—in a heartbeat—take ‘smart, good’ money over ‘evil’ or ‘dumb’ money any day of the week, even if the valuations differ by 10x. Once you’ve settled on the investor, only then should you worry about the terms of the investment.

Term Sheet 128

Term Sheet Valuation New York Curation 128

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Womble Bond Dickinson has released a white paper on Performance Aligned Stock and a term sheet on ImpactTerms.org. . (If Capacity Capital, Greater Colorado Venture Fund, Indie.VC, Reformation Partners, UP Fund, Versatile VC.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

OnlyOnce

OCTOBER 31, 2013

And this is true of any negotiation, not just a term sheet. But – and this is an important but – you should expect to “pay” for quality in the form of slightly weaker terms (whether valuation or type of security). Similarly, I’d always sacrifice valuation for a clean security.

Valuation 133

Valuation Term Sheet B2C Security 133

ithacaVC

NOVEMBER 28, 2012

On October 17th I posted on seed and early stage startup valuations. This morning I read a post by Marty Zwilling on startup valuations. His post on startup valuations lists the following rules of thumb (i.e., The better the team, the better the valuation. Here it is.

Valuation 69

Valuation Intellectual Property Startup Early Stage 69

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.

Venture Capital 114

Venture Capital Marketing Term Sheet Software Review 114

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … 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.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

OCTOBER 25, 2014

A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms. Term Sheets & Valuations. A Line by Line Look at the Intricacies of Term Sheets & Valuations. Raising Venture Capital for the Serious Entrepreneur. Mastering the VC Game. Venture Deals.

Term Sheet 132

Term Sheet Private Equity Exit Strategy Venture Capital 132

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. I can boil it down to how this tension plays out. For me it’s clear.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

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? One of the least understood of these key terms is the liquidation preference. and 2X had an average pre-money valuation of $8.6

Liquidation Preference 39

Liquidation Preference Pre-Money Valuation Term Sheet Valuation 39

This is going to be BIG.

OCTOBER 12, 2020

That leaves me out raising with two funds under my belt and no big exit and no unicorn valuations. One just got a seed term sheet for twice the valuation I put in at in the pre-seed and the other is doing $200k/month in revenue. There are others, but they’re still pretty young.

LP 136

LP Technical Review Software Review Valuation 136

Both Sides of the Table

APRIL 14, 2012

Did raising money at a $500 million valuation help secure the $1 billion deal? “it’s smart to use an impending investment valuation to drive a higher acquisition valuation” I would like to amend her statement slightly to read, “it’s smart to use an impending investment valuation to drive an higher acquisition.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316