View from Seed

SEPTEMBER 14, 2021

Building off Rob’s original post, let’s continue to look at the 2007 vintage. Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less. What Does the VC Performance Data Tell Us? Let’s see if VC performance data can add anything to this question.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Both Sides of the Table

OCTOBER 7, 2014

There weren’t a lot of seed funds in 2007 so this was often done by angels, funding consortia or sometimes early-stage funds that existed then (First Round Capital, True Ventures, SoftTech VC, etc.). 5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007.

Cap Table 399

Cap Table Silicon Valley Term Sheet Finance 399

View from Seed

SEPTEMBER 14, 2021

Building off Rob’s original post, let’s continue to look at the 2007 vintage. Seed investors are being compensated for the risk because later-stage investors are paying higher prices, and diluting early-stage investors less. What Does the VC Performance Data Tell Us? Let’s see if VC performance data can add anything to this question.

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Up and Running

SEPTEMBER 6, 2018

Diluted priorities. Editor’s note: This article was originally published in 2007. They can also be Lean Plans , detailed action plans, financial plans , marketing plans , and even personnel plans. They can be used to start a business , or just run a business better. Develop the plan that best suits your business goals.

Business Plan 128

Business Plan Hockey Stick Lean Dilution 128

Jason Ball

SEPTEMBER 28, 2010

Don’t worry about your “dilution&#. 5 million was raised in July 2007 in series A funding from Charles River Ventures, Union Square Ventures, Marc Andreessen, Dick Costolo, Naval Ravikant, Ron Conway, Chris Sacca, and Greg Yaitanes. It is true that raising $5M is just as easy as raising $500k. Go for the gold.

Pre-Money Valuation 34

Pre-Money Valuation Valuation Dilution Venture Capital 34

Duct Tape Marketing

DECEMBER 17, 2015

When Alina Martin took over her father’s small company in 2007 it had been ticking along, growing slowly for several years. But with fast growth, that promise can be diluted. Growth Could Kill Your Company! written by Guest Post read more at Duct Tape Marketing. photo credit: epSos.de.

Canada 28

Canada Dilution America Employee 28

Gust

OCTOBER 8, 2014

There weren’t a lot of seed funds in 2007 so this was often done by angels, funding consortia or sometimes early-stage funds that existed then (First Round Capital, True Ventures, SoftTech VC, etc.). 5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

David Teten

NOVEMBER 17, 2011

In particular, this model is designed to help all team members understand the impact of dilution on their options. To illustrate dilution effects, we show a couple of investment rounds (angel and VC) as well as employee option increments at different stages. I couldn’t find one online, so I built it.

Employee 155

Employee IRR Startup Mexico 155

View from Seed

JANUARY 26, 2016

In the years immediately prior to the popularity of institutional seed investing (I’m using a time frame of 2002 – 2007), the early-stage financing landscape looked similar to the first segment of the chart. I used 2007 as the marker to delineate this, but the trend probably started a bit sooner.).

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Both Sides of the Table

APRIL 14, 2010

It’s a bit like if you bought a $1 million home in 2007 and want to sell it for $1 million today. One is slightly better and priced at $1 million, which you know from Zillow is what they paid for it in 2007. Another is slightly worse but priced at $700k and was bought in 2007 for $1 million.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

APRIL 27, 2014

I started in 2007 with a thesis that my primary investment decision would be about the team (70%) and only afterward about the market opportunity (30%). If we got an offer to raise $25 million to grow would she take it or be too worried about exit price, dilution, valuation expectations, etc. Know how you’ll make money.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

This is going to be BIG.

DECEMBER 28, 2013

YCombinator had a great run from 2007 through early 2009 investing at a time when there weren''t nearly as many seed funds and accelerators as there are now. The classes got too big and quality was diluted because, by PG''s own admission, YC " grew too fast.". YC''s best investing days may be behind it. That''s less than 10%.

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. Entrepreneurs face some pretty tough questions at a very early stage. How much money should I raise?

Equity 40

Equity Employee Dilution Valuation 40

Cracking the Code

OCTOBER 12, 2012

Let’s examine first the ownership constraint proposed by the amendment: the ownership level of a founder in his / her company depends on two key factors: the number of founders in the start-up and the potential dilution that occurs with fund raising (needed to sustain the company’s growth).

France 71

France Europe Capital Gains Dilution 71

crowdSPRING Blog

OCTOBER 8, 2018

Chris Messina (@chrismessina) August 23, 2007. Tip: Only use these call-to-action hashtags on posts specifically related to that campaign, otherwise, you risk diluting the impact. how do you feel about using # (pound) for groups. As in #barcamp [msg]? — Hon. Why do companies use hashtags? Each hashtag is individually searchable.

Small Business 80

Small Business Social Media Marketing Social Network 80

Life Beyond Code

SEPTEMBER 18, 2010

Founders know that their position gets diluted. Steve Jobs unveiling iPhone at MacWorld 2007 – Quick lessons from the keynote Google Custom Search Engine and Rollyo – The power of the brand (and incentive) Google Autolink – Innovation gone awry?? 34 years later, I would be surprised if he owned even 1% of the company.

San Jose 66

San Jose Cofounder Dilution Metrics 66

Altgate

DECEMBER 7, 2008

I would have thought the entrepreneurs would have used their own capital to delay dilution. For subsequent ventures, successful entrepreneurs raise venture capital earlier than do first time entrepreneurs. I wouldn’t have expected this. There are many other pearls in this 33 page paper, so I definitely encourage you to read it.

Venture Capital 44

Venture Capital Marketing Dilution Government 44

venturehacks.com

SEPTEMBER 22, 2011

by Nivi on July 19th, 2007. When you evaluate a candidate, ask yourself whether she is likely to increase the next round’s share price (include the dilution of her market rate options). · Jul 19, 2007. · Jul 20, 2007. · Jul 20, 2007. · Jul 20, 2007. SUPPORTED BY. venturehacks.

Equity 40

Equity Cap Table Valuation RSS 40

Ben's Blog

JULY 16, 2013

3/30/2007: 22.6. If we took too much dilution, we will work with our new investor to make sure that every employee is still highly financially motivated. One would be wrong: 3/31/1995: 21.0. 3/29/1996: 22.3. 3/31/1997: 23.3. 3/31/1998: 30.8. 3/31/1999: 49.7. 3/31/2000: 73.4. 3/30/2001: 26.3. 3/29/2002: 82.5. 3/31/2003: 44.6.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

thestartuplawyer.com

FEBRUARY 24, 2010

View Comments lk says: October 23, 2007 at 9:56 pm the co-founders of textworks just experienced getting shafted by a co-founder! Ryan says: October 24, 2007 at 7:00 am I’m sorry to hear about that. He obviously never launched a startup and got shafted by a co-founder. would you like to link to one another?

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Duct Tape Marketing

MARCH 27, 2015

Ensuring that the unifying idea behind your event isn’t forgotten along the way will prevent the core message from being lost or diluted. Personal branding is a decidedly human endeavor I participated in the 2007 Global Telesummit titled A Brand. Branding Core message Positioning customer journey event design Tori Atkinson'

Design 28

Design Campaign Dilution Social Media 28

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). I found this data quite interesting and wonder how representative it actually is as most angel investments are not reported. Back to the panel.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Ben's Blog

JULY 16, 2013

3/30/2007: 22.6 If we took too much dilution, we will work with our new investor to make sure that every employee is still highly financially motivated. One would be wrong: 3/31/1995: 21.0 3/29/1996: 22.3 3/31/1997: 23.3 3/31/1998: 30.8 3/31/1999: 49.7 3/31/2000: 73.4 3/30/2001: 26.3 3/29/2002: 82.5 3/31/2003: 44.6 3/31/2004: 31.6

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

www.startupnorth.ca

OCTOBER 23, 2010

and then further dilute for advisors (0.5% – 1% – 2%) and early employees (5 – 15% *if* they are foregoing major chunks of salary). link] davidcrow Yeppers, I did forget to mention that this was after a Series A raise, and it doesn't talk about dilution in future rounds. 50 – 50, 60 – 40, etc.)

Employee 41

Employee Founder Salary Equity 41

The Next Web

OCTOBER 3, 2012

In 2007, Paul Graham gave a variety of causes for startup death in How Not To Die. So, growing more not only has the effect of adding more weight to the company, but also of diluting each employee’s decision-making stake (feeling of overall responsibility) in the company.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. First, the option pool only dilutes the common stockholders.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

This is going to be BIG.

SEPTEMBER 25, 2018

I started a company back in late 2007. If I had kids, I wouldn’t have been able to make it as long—but if I had kids, I probably would have raised more capital and just taken more dilution to cover that. We raised $550k in seed funding and, despite a lot of hard work, things didn’t work out.

Salary 107

Salary Cofounder Dilution Finance 107

maplebutter.com

JANUARY 8, 2013

2) Co-Founders are the largest form of dilution (if you’re raising) 3) Everything around LeanStartup / Customer Development 4) Understand the micro economics of your business early. Co-founders are the highest form of dilution to a business. Whats the best startup advice you’ve ever received? Just one piece of advice?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Reid Hoffman

JUNE 8, 2021

And it was 2007. And I think one of the things that we’ve learned is, when I came to Silicon Valley in 2007, we were starting Airbnb in 2008, it was a marketplace. That probably saved a huge amount of dilution, rather than doing a down round at between $15 billion to $18 billion. And you think there’s very minimal downside.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Both Sides of the Table

FEBRUARY 14, 2016

You’ll see here that in 2007 people were willing to pay 7.7x Plus, down rounds trigger anti-dilution provisions. As I’ve pointed out previously, this is perfectly captured by Joe Floyd here tracking SaaS multiples over time. forward revenue for SaaS businesses when in the years before it had been less than 5x.

Valuation 150

Valuation Down Round Startup Later Stage 150

venturehacks.com

MARCH 21, 2008

If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like. © 2007 Venture Hacks (not including the pictures) — Cutline Theme by Chris Pearson Learn more. Buy it here.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Reid Hoffman

JUNE 8, 2021

And it was 2007. And I think one of the things that we’ve learned is, when I came to Silicon Valley in 2007, we were starting Airbnb in 2008, it was a marketplace. That probably saved a huge amount of dilution, rather than doing a down round at between $15 billion to $18 billion. And you think there’s very minimal downside.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Life Beyond Code

SEPTEMBER 27, 2011

He has veered away from angel financing, and has decided to bootstrap with customer money, and preserve equity ownership, foregoing any immediate dilution related to financing. I was looking for what you teach back in January 2007 and couldn’t find it anywhere. Of 1M/1M he says, “The value of your program is amazing.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116

Both Sides of the Table

MARCH 1, 2010

I had an offer to sell my company to Salesforce.com in 2007. He was grateful since I stuck with my first company, BuildOnline, well beyond when others would have (since I had taken great dilution during the dot com burst.). I had an offer to sell my company to Salesforce.com in 2007. He decided to let me earn.

Entrepreneur 321

Entrepreneur Warrant Silicon Valley Early Stage 321