Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Maybe an IPO – who knows? Convertible notes were previously used primarily for “inside rounds” in which the existing investors provide you with bridge financing to get to the next round. How will you price the next round? Your A round? Him: On metrics. What proof points? Employment.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

cdixon.org

AUGUST 3, 2012

Facebook’s market cap is about half of what most tech investors expected before the IPO. - For consumer startups with transactional models, e.g. e-commerce, the number of users required is often far lower because revenue is the more important metric. VCs are increasingly focusing on B2B for early-stage investments.

Bridge Financing 86

Bridge Financing Early Stage Valuation Later Stage 86

Gust

SEPTEMBER 17, 2014

Revenue multiple? Maybe an IPO – who knows? Convertible notes were previously used primarily for “inside rounds” in which the existing investors provide you with bridge financing to get to the next round. How will you price the next round? Your A round? Him: On metrics. We’ll have some proof points by then. I’m not sure.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

ithacaVC

FEBRUARY 20, 2011

Invest at time X, grow company during time X+8 years, sell company (or less likely IPO) at some point along the way and create value for everyone. It may explain why Fund Y tries to protect itself, via deal terms, from pay to play provisions that would kick in with respect to future financings.

Bridge Financing 40

Bridge Financing IPO Pay to Play Finance 40