The Equity Kicker

JANUARY 25, 2016

However severe our current situation is, I’m sure there will be plenty of short term negatives, including more job losses, company failures and down rounds. I think that’s why you see people like Bill Gurley, Fred Wilson and Mark Suster publicly talking markets down.

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Venture Capital Angel Investor Startup Participating Preferred 60

Scalable Startup

JANUARY 27, 2011

An ominous title for a blog post, but “Grow or Die” has been one of the most basic rules in the high-growth startup world for decades. If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding. Are we becoming passé?

Revenue 22

Revenue Early Stage Down Round Software Review 22

www.mattbartus.com

DECEMBER 9, 2012

Interesting strategy, although I don't know if it justifies the added risk of having a flat (or down) round next time you go to raise. Interesting strategy, although I don't know if it justifies the added risk of having a flat (or down) round next time you go to raise. Sorry, your blog cannot share posts by email.

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Warrant Valuation Pre-Money Valuation Term Sheet 40

Ben's Blog

JULY 16, 2013

When you go to fundraise, you will need to consider the possibility of a valuation lower than the valuation of your last round, i.e., the dreaded down round. Down rounds are bad and hit founders disproportionately hard, but they are not as bad as bankruptcy. Yes, we did a down round.

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Marketing Preferred Stock Post-Money Valuation Down Round 46

VC Cafe

JUNE 10, 2022

new unicorns created each day), startups may find themselves raising down rounds as they struggle to justify previous valuations. These questions have become more important in today’s market and the firm’s blog is packed with interesting insights. With over 1,000 global unicorns (and about 1.5

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Valuation Marketing Venture Capital 152

Business Plan Blog

OCTOBER 8, 2013

Additionally, if/when you need to raise the next round of capital, you dont want to risk taking in money in a down round because you overvalued the company early on. Milestones are discussed in other sections of this blog but it is important to highlight them on their own as well. Ignoring Milestones.

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Business Plan NDA Exit Strategy Valuation 67

Tim Keane

SEPTEMBER 17, 2009

Third, angels in particular have had unpleasant experiences with second rounds that are venture led where down-round terms are painful and expensive. All of that leads to a tighter money supply which tends to drive down prices. . All of that leads to a tighter money supply which tends to drive down prices.

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Wisconsin Valuation Angel Investor Startup 60

VC Cafe

SEPTEMBER 26, 2022

Many startups that raised money in 2021 on inflated valuations that were detached from their actual value, are struggling to raise up-rounds and face difficult choices these days: down rounds, early sellout or failing altogether. A good way to think about valuation in seed/pre-seed is to reverse engineer the next round.

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Founder Startup Valuation Pre-Money Valuation 187

Growthink Blog

MAY 23, 2011

This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits. And they hire very aggressive securities attorneys to represent their interests.

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Angel Investor Venture Capital Sweat Equity Cram Down 112

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Blog at WordPress.com. Reply Sean Murphy , on November 2, 2009 at 11:55 am Said: This is a common misunderstanding and one that bootstrappers trip over.

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Lean Silicon Valley Startup RSS 244

Both Sides of the Table

FEBRUARY 14, 2016

When I started blogging it was because I was inspired by Brad Feld. I always wanted to work with Brad for this reason so I started blogging because I figured if transparency worked for Brad I would try the same approach. Why Down Rounds are Harder Than You May Think. Down rounds are hard.

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Rob Go

JUNE 1, 2016

Where I think funds do start having hard conversations around follow-ons is when they need to lead inside rounds or protect themselves in down rounds. This might not be true of all VC funds, and I know a number of funds that have a mantra that they treat follow-on rounds like “a new deal”.

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Term Sheet Portfolio Valuation Warrant 28

crowdSPRING Blog

FEBRUARY 21, 2014

How You Get Slaughtered in a Down Round: When Taking Venture Capital Doesn’t Go as Planned – crowdspring.co/MvF29W. Facebook and WhatsApp: The Nineteen-Billion-Dollar App – crowdspring.co/1jOdRlK. DHL Pranked UPS Into Advertising For Them – crowdspring.co/1jOeA6v. “If you want to sell ads, sell ads.

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Social Media Small Business Design Media 92

This is going to be BIG.

MARCH 3, 2019

It doesn’t take into consideration options, down rounds, or recaps. It’s just a model of the share price of a company going up and to the right smoothly until it exits for $300mm, and the outcomes for the shares purchased in each round of financing. Here’s a very plain vanilla model.

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Portfolio Burn Rate LP Distribution 110

Scalable Startup

FEBRUARY 1, 2013

Alexia Tsotsis: Are you seeing down rounds because the NASDAQ is down? Marc Andreessen: No, we have not seen down rounds yet. We have not seen down rounds yet, but consumer rounds that are happening now — consumer growth rounds are happening now at 2-4x lower prices than they were six months ago.

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Software Review Startup Venture Capital Stock 22

Tim Keane

AUGUST 20, 2009

"  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur. 

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Milwaukee Bootstrapping Cram Down Deal Structure 60

Both Sides of the Table

OCTOBER 18, 2015

My presentation from the Summit can be downloaded here and the embed is below but the summary message is the rest of this blog post. In 2014 3 out of 12 exits were occurred at a lower valuation than the previous round. 25% “down rounds? But when you fast-forward 1 year to 2015 5 out of 7 were down rounds.

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IPO Venture Capital LP SEC 150