Cap Table Dilution Marketing Revenue 
David Teten
AUGUST 19, 2019
So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Rational burn profile, up to 50% of revenue at close, scaling down. Bigfoot Capital.
This is going to be BIG.
JANUARY 18, 2024
While they might be generally smart, they’re unsophisticated investors who don’t know what the market is for where you are. They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. How long do they think it will take to make a return if there is one?
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Both Sides of the Table
FEBRUARY 8, 2016
And when prices are dropping on a VCs existing companies in market, there is a substantial reduction in FOMO (fear of missing out) for new deals, which means that investors take their time in making investment decisions. Optimize for a W more than % dilution in these circumstances. Founders hate them because they’re dilutive.
David Teten
JANUARY 19, 2021
More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.
Both Sides of the Table
SEPTEMBER 16, 2010
As I’ve highlighted I believe we’re in a unique period similar to 2005-08 where the biggest tech firms of Silicon Valley (and some media companies) are scooping up small software companies as “talent acquisitions&# versus accretive revenue / profit generators. Total disruption on the funding market? I doubt it.
Hunter Walker
JANUARY 2, 2017
The total value of these deals might look higher than when a tech company makes an acquihire but the premium tends to go to retention rather than the cap table (especially since (a) the acquirer might not be seen as an ‘attractive’ place to work and (b) there’s assumption of less equity upside post-acquisition).
David Teten
AUGUST 21, 2019
Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Less or no dilution.
Expert insights. Personalized for you.
60 
Let's personalize your content