Berkonomics

JUNE 8, 2017

I’ve arrived at a significant number of companies that were looking for additional growth capital after a “friends and family” round, and had to “clean up” the cap table more than a few times over the years. Taking this kind of money has a number of pitfalls you should be aware of.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Both Sides of the Table

FEBRUARY 8, 2016

We do this in our consumer lives with everything ranging from housing purchases to public stocks. If you raised money in the past 2 years and have grown it is possible that your next round valuation might be flat (or lower) even though you have a higher revenue because investors may value your multiple differently. Start early.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Valuation 150

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a cap table simulator to help level the playing field.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Berkonomics

JANUARY 20, 2010

I’ve arrived at a significant number of companies that were looking for additional growth capital after a “friends and family” round, and had to “clean up” the cap table more than a few times over the years. Taking this kind of money has a number of pitfalls you should be aware of.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

David Teten

OCTOBER 1, 2015

I’ve talked with a number of software development shops who are eager to get into the business of cofounding companies, i.e., getting product revenue and equity instead of just consulting revenue. We know it’s important to keep the cap table clean, and we want to focus on where/when we add value and then get out of the way.

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Hunter Walker

JULY 18, 2022

Your runway is impacted by the absence of projected revenue. A $10b+ outcome feeds *everyone* on the cap table and the collective belief that an extraordinary number of startups could reach and eclipse this milestone drove a lot of the momentum investing of 2019–2021. Similarly, for a variety of reasons, the music stopped.

Valuation 116

Valuation Cap Table Startup Later Stage 116

blog.simeonov.com

FEBRUARY 22, 2010

The number of separate documents may vary but they fall into two categories: Those related to equity, typically a restricted stock purchase agreement (RSPA) and associated escrow and other agreements. The smartest founders who put money in their own businesses put it through a separate preferred class of stock before other investors come in.

Founder 44

Founder Vesting Agile Startup 44

www.paulgraham.com

APRIL 28, 2010

A lawyer I asked about it said: When the company goes public, the SEC will carefully study all prior issuances of stock by the company and demand that it take immediate action to cure any past violations of securities laws. There never has to be atime when you have no revenues. Those that dont fail all seem to get boughtor go public.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. The same thing happened to many Internet stocks. You can no longer simply look at the cap table and estimate your return. The adjustment does not happen now, it will happen later.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Startup Lessons Learned

JUNE 9, 2020

A complete collapse of revenue that simultaneously affects your employees and your customers, your partners, your investors, everyone all at once and all the news is bad. You created the longterm stock exchange. And the good thing is, was it included people that were already in our cap table. So then what?

Silicon Valley 60

Silicon Valley Hosting Cofounder Employee 60

Austin Startup

DECEMBER 10, 2017

Even while unemployment has fallen and the stock market has soared, sluggish productivity and anemic wage growth are attributed to this phenomenon. For more info, see the NY Times article on this September 20, 2017. I no longer use links for security reasons, plus this is all destined for print at some point.)

Georgia 48

Georgia Startup Incubator Harvest 48

abovethecrowd.com

JUNE 2, 2021

These are the parties on the cap table prior to the transaction. He then argues Squarespace, as a result of choosing a Direct Listing, ended up with a valuation multiple of 6.7X, which he says compares unfavorably to its public peer $WIX (which has an 8X forward revenue multiple). Party B: The investment banks. So if 20.5X

IPO 82

IPO Customer Matching Silicon Valley 82