Both Sides of the Table

DECEMBER 11, 2022

2001–2007: THE BUILDING YEARS The dot com bubble had burst. We had nascent revenues, ridiculous cost structures and unrealistic valuations. SEEING THINGS FROM THE VC SIDE OF THE TABLE While I was a VC in 2007 & 2008 those were dead years because the market again evaporated due the the Global Financial Crisis (GFC).

Valuation 466

Valuation San Francisco Ratchet Liquidation Preference 466

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

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. I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

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. That means that the likely have a minimum of $15 million in liquidation preferences. Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. But pass they will.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

K9 Ventures

JUNE 5, 2015

As the check size increases, investors tend to look for more traction, established revenue models, proven unit-economics, and other metrics that were previously associated with later stage companies. In the 80s and 90s a company would go public when it hit $20M in revenue. Yes, history is repeating itself!).

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Both Sides of the Table

FEBRUARY 14, 2016

You’ll see here that in 2007 people were willing to pay 7.7x forward revenue for SaaS businesses when in the years before it had been less than 5x. Or down rounds might favor earlier-stage investors because the liquidation preferences of later stage investors get reduced. This corrected only to go back up to 13.4x

Valuation 150

Valuation Down Round Startup Later Stage 150

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? from David Dalka - Creating Revenue and Retention - Chicago GSB MBA As discussed in my recent post about a TiE event on Chicago start ups, there are many factors to consider when taking in funding and employees.

Equity 40

Equity Employee Dilution Valuation 40