VC Adventure

AUGUST 15, 2018

As is true today, there was a requirement that options be priced at or above the “fair market value” of the underlying stock (otherwise there would be tax consequences to the optionee and sometimes to the company as well). Similarly I assumed that later stage companies would also show a smaller gap. I was wrong.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Up and Running

JULY 2, 2014

You can’t underestimate the importance of selecting an attorney who “gets” your business model, your market opportunity, and most importantly, your fundraising and exit strategy. This should be clearly spelled out in your Capitalization Table , or “Cap Table” as it’s commonly called. Our attorney should have known.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Hunter Walker

SEPTEMBER 15, 2023

So when I tell you what I’m seeing in venture financing these days if you disagree with me, it might just be that we’re touching different parts of the elephant. Haystack’s Semil Shah wrote up his POV on what this has all meant for the seed market and one point in particular caught my eye. It’s just math.

Cap Table 93

Cap Table Valuation Salary Seed Stage 93

OnlyOnce

DECEMBER 1, 2021

As startups scale, they are likely to hire a more senior accountant, maybe an AR/AP/Collections staff member, or even a Controller or VP Finance. Are you way under market in compensation and trying to overcome that by offering equity or “perks” to attract top talent? Is it concerning that you’re tight when it comes to payroll?

Hiring 117

Hiring Cap Table Finance Equity 117

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. The mode purpose for funding is (in order of frequency) Sales, Marketing, Market Expansion, Product Development, and Hiring Employees. “ You qualify if you have $5k+ MRR. Bigfoot Capital. Decathlon Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

OCTOBER 7, 2014

5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007. Entrepreneurs started demanding that VCs call their first-round financings “seed” rounds even if they were $3 million. It is less about actual money and more about structure of your Cap Table.

Cap Table 399

Cap Table Silicon Valley Term Sheet Finance 399

Pascal's View

JULY 9, 2017

While VC deals remain marketed on a pre-money basis, sophisticated investors know that what matters most is the post-money (how much of the company will I own after all of the new shares have been issued). Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Gust

OCTOBER 8, 2014

Cautionary note: No competent VC is actually fooled when you show up after raising $6M in seed financing and say you’re now raising an A! 5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007. It is less about actual money and more about structure of your Cap Table.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

OnlyOnce

MAY 26, 2022

Do you spend a lot of your time dealing with finance-related issues like fundraising, debt, investors, or cap table questions? Are you on the hot seat during board meetings on finance-related questions, metrics, runway, cash burn, or other issues? Do they spend time in-market with customers, partners, or vendors?

Cap Table 62

Cap Table Forecast Finance Metrics 62

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

David Teten

NOVEMBER 14, 2019

That said, venture capital is just one of many options to finance your business, and it’s typically the most expensive. The first step is to decide the right capital structure for your financing. These options provide you capital and also market validation for desire for your product. . Most important, reference checking.

SBIC 60

SBIC SBA Cap Table Database 60

Austin Startup

AUGUST 20, 2017

Are they consistent with your founding team, are they competitive in the market, and will they not create precedents that you’ll regret in the next round of hiring? Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

View from Seed

DECEMBER 11, 2019

Yes, there are intermittent points of feedback along the way, like valuation marks from subsequent rounds of financing. In both up and down markets, the extended feedback cycles, low signal-to-noise ratio, and backwards looking economics create a dynamic which facilitates forced and unforced turnover.

Venture Capital 204

Venture Capital Cap Table Partner LP 204

Altgate

JUNE 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 44

Equity Vesting Cap Table Technical Review 44

Haystack

OCTOBER 2, 2019

Part of being a founder is simply about being able to finance the operation. Maybe an accelerator should take lower cap table ownership unless they deliver investors who convert? However, that doesn’t mean founders in those programs should assume their accelerator will help them land financing.

Deal Flow 106

Deal Flow Cap Table Early Stage Institutional Investors 106

keen.io

FEBRUARY 5, 2013

And if the CEO says, “Salaries will be adjusted to market value soon,” that’s probably a best-case scenario. To begin answering this question, I started on a quest to understand startup financing. We asked the founders to talk us through the financials, help us complete the detailed cap table, and discuss the offers together.

Salary 50

Salary Equity Startup Cap Table 50

Altgate

AUGUST 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 28

Equity Vesting Cap Table Technical Review 28

The Equity Kicker

MARCH 21, 2017

That’s because there’s no money in solving them (otherwise the market would have been solved already). We need massively successful companies like Facebook, and even Uber to generate growth, employment and the profits needed in the venture industry to finance the next generation of companies.

Cap Table 90

Cap Table San Francisco Angel Investor .Net 90

Hunter Walker

APRIL 24, 2017

What outsiders don’t realize is that much of the most intriguing seed startups go through a financing process that’s “dark” – not seen by most investors because it’s either competitively privileged to a few firms or so against traditional patterns that the walk is more random.

Cap Table 71

Cap Table LP Seed Stage Vertical 71

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. Cash is king and it's a developer's market out there right now. CRM Magazine: 2011 CRM Market Leaders.

Equity 40

Equity Technical Review San Jose Stock 40

www.informationarbitrage.com

FEBRUARY 24, 2010

Read more » Recent Press The New York Times April 22, 2009 - A Company Plans to Market Illiquid Assets CNBC.com April 8, 2008 - Social Stock Picking Reuters April 6, 2009 - Bit.ly It is helping with recruiting by leveraging my networks and experience in a particular domain.

CTO Hire 40

CTO Hire Founder Vesting Cap Table 40

OnlyOnce

FEBRUARY 9, 2022

On the heels of the announcement we made last month about our Series B financing , we are now announcing the launch of a new program called Bolster Prime and a new venture capital fund called Bolster Ventures. This is another big week for us at Bolster. The middle” consists of venture-backed companies that are neither early stage nor mature.

Silicon Valley 62

Silicon Valley Venture Capital Cap Table Early Stage 62

ithacaVC

FEBRUARY 1, 2018

It is highly typical for a startup to have small investors on its cap table. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. Or the economy tanks or stock market tanks moving valuations down at inopportune times for the startup.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Both Sides of the Table

SEPTEMBER 15, 2010

But knowing the right people and knowing a market only works well for angel investors in bullish tech markets in which IPO’s happen quickly (97-99) or where larger companies are actively scooping up little tiny companies at sub $50 million valuations to drive innovation (05-08, 10-?). Obviously I agree. So where are we now?

Angel Investor 284

Angel Investor Cap Table Early Stage Deal Flow 284

Hunter Walker

NOVEMBER 20, 2013

US-based seed VCs rarely invest outside of the country (500 Startups is one exception) leaving a potential gap in the market for folks with international expertise. Instead a series of AngelList Syndicates could serve as complements or substitutions for local in-market dollars overseas. 2) The Bundled Expertise Syndicate.

Syndicate 98

Syndicate Syndication South America Seed Stage 98

This is going to be BIG.

DECEMBER 3, 2020

Diversification Finance 101 would tell you that, in the public market, you want to be in at least 20-30 names to eliminate a good chunk of the risk (as defined by the standard deviation of return) that you don’t actually get paid for. Less than that and you need something else to bring to the table. So is everyone else.

Portfolio 134

Portfolio Syndicate Syndication Deal Flow 134

Eric Friedman

JUNE 27, 2016

I have seen what I call “predatory advisors” come in and really mess up a cap table by promising big intros and sales contracts only to disappear after the first 6-12 months. Setting The Option Strike Price Above Fair Market Value. Remember when I talked about getting an advisor that can 10X a business?

Equity 98

Equity Vesting Cap Table Common Stock 98

Feld Thoughts

AUGUST 12, 2011

When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. QuickBooks and other accounting software programs will do this for your finances, but you should also implement tools for tracking other key metrics (e.g.

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

Feld Thoughts

SEPTEMBER 7, 2010

I pointed out that their market reputation was that they didn’t do seed investments nor did they do many Series A investments. And, in each case, his firm had decided not to follow on, took themselves out of the cap table, and the three companies were able to raise additional financing (in one case from a different VC firm.).

Cap Table 134

Cap Table Reputation Finance Programming 134

Both Sides of the Table

SEPTEMBER 14, 2010

But knowing the right people and knowing a market only works well for angel investors in bullish tech markets in which IPO’s happen quickly (97-99) or where larger companies are actively scooping up little tiny companies at sub $50 million valuations to drive innovation (05-08, 10-?). Obviously I agree. So where are we now?

Angel Investor 152

Angel Investor Cap Table Early Stage Deal Flow 152

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability. But should they? May make it harder to raise traditional equity VC.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Hunter Walker

AUGUST 26, 2022

Our timing was brutal: the Box S-1 coincided with the start of a major market correction for SaaS stocks, and our newly revealed financials made us a natural poster company for that change in sentiment. In the process of investing, we became rather obsessed with helping founders build more diverse and impactful cap tables.

IPO 91

IPO Cofounder Early Stage Portfolio 91

Spencer Fry

APRIL 17, 2017

It wasn’t enough at the end of 2015 to have a working prototype and a handful of customers to somehow take over the market. If this is the case, you may find yourself starting all over with little revenue (if any), a 1-2 person team that might be consulting on the side to pay bills, and no marketing spend. Something has to give.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Harvest 63

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. The terrible consequence is that some great companies struggle to get financed. This prudence is smart and welcomed.

Burn Rate 150

Burn Rate Cap Table Dilution Balance Sheet 150

David Teten

DECEMBER 3, 2019

In liquid markets, most of the calories expended on technology and analytics are focused on trade selection, or “ origination ”. I use another live Google doc to maintain my database of companies I’m marketing to other VCs. 2) Market . Many tools designed for B2B marketing in general are also relevant to investors.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Austin Startup

SEPTEMBER 4, 2017

Do you need to pour more dollars into marketing and PR? Are you marketing in the right places? Meanwhile his or her market segment moves on. If you do eventually expose your company to those professionals, all your dumb shareholders will get crushed in the new cap table. I could go on.

Cap Table 48

Cap Table Austin PR Founder 48

Hunter Walker

SEPTEMBER 29, 2022

And finally, a more robust (but still somewhat opaque) secondary market emerged for transacting equity among parties. You don’t bring investors on to the cap table via a secondary transaction that are going to be problematic. As we’re recently reminded, markets go down, not just up. Pigs get fat but hogs get slaughtered.

Venture Capital 122

Venture Capital Cap Table LP Equity 122