Berkonomics

AUGUST 3, 2023

My experience with early valuations by founders for friends… 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. The post Need money? first appeared on BERKONOMICS.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

View from Seed

JUNE 11, 2019

I think the most simple thing to do is to focus on securing the lead investor, and then optimizing around the edges after that. In order to accomplish the things above, you will probably want to include more than 1–2 investors on your cap table. It’s not necessary to nail down every element of your syndicate simultaneously.

Syndicate 202

Syndicate Syndication Seed Stage Lead Investor 202

View from Seed

AUGUST 6, 2015

A literal one is that everyone sacrifices the security of more money for the opportunity to build a profound idea from scratch and, maybe, share in a potentially tremendous financial outcome. This is not an argument for circulating the entire cap table or compensation calendar. The reasons behind this sentiment are many.

Equity 120

Equity Employee Cap Table Stock Options 120

View from Seed

AUGUST 6, 2015

A literal one is that everyone sacrifices the security of more money for the opportunity to build a profound idea from scratch and, maybe, share in a potentially tremendous financial outcome. This is not an argument for circulating the entire cap table or compensation calendar. The reasons behind this sentiment are many.

Equity 120

Equity Employee Cap Table Stock Options 120

Hunter Walker

DECEMBER 30, 2022

So they might like us, think we’re useful to companies, etc but their ‘job to be done’ is to find a lead because that closes the round -AND- helps secure their allocation. Previously ‘Competitive’ Seed Funds and Multistage Funds : Up by 100%. So this is the other side of the coin from above.

Cap Table 67

Cap Table Venture Capital Cofounder Portfolio 67

BeyondVC

NOVEMBER 17, 2016

West coast founders now fully understand why having a NYC investor on their cap table pays huge dividends and west coast VCs are regularly leading Series A and B rounds in NYC. We continue to have the courage to be first on your cap table and the conviction to move swiftly to close rounds.

Cap Table 60

Cap Table Cofounder Dividend Institutional Investors 60

David Teten

AUGUST 19, 2019

According to Kim Folson, Co-Founder, “Founders First Capital Partner (F1stcp) has just secured a $100M credit facility commitment from a major institutional impact investor. Limited amount of existing debt and a clean cap table”. Requirements for funding consideration: Companies with a minimum of $50k in MRR.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

SEPTEMBER 23, 2017

We are heavy users of DocSend , a secure content sharing and tracking platform that can be used to seamlessly share recurring materials with potential LPs. DocuSign is steadily reducing the need for paper signatures, and is a more streamlined method for communicating contract changes in a secure manner.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

ithacaVC

FEBRUARY 1, 2018

It is highly typical for a startup to have small investors on its cap table. We have even done deals where we come in for a Series A or Series Seed at a valuation LOWER than what the FFAs paid, and then literally convert the FFAs investment to the lower valuation security to protect them.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Business Plan Blog

NOVEMBER 13, 2013

maturity date is reached and the startup is unable to secure a round of financing, note holders can force the startup into bankruptcy. It gives in depth examples & templates explaining documents like Term Sheet, Cap Table, Convertible Securities plus the importance of 83(b) filing.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

David Teten

DECEMBER 3, 2019

Small investment firms often have interns and entrepreneurs in residence passing through, each of which is a security risk. See Bessemer Venture Partners’ A comprehensive guide to security for startups. 645 Ventures released a cap table simulator to help level the playing field. 2) Market .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

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

Hippoland

MAY 16, 2018

I put “equity” in quotes because I include convertible notes and convertible securities in this category.) Because most startups will end up raising tranches of money from multiple parties, many startups will use convertible securities (SAFEs / KISSes) or convertible notes. E.g. $200k on $3m.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

Hippoland

MAY 16, 2018

I put “equity” in quotes because I include convertible notes and convertible securities in this category.) Because most startups will end up raising tranches of money from multiple parties, many startups will use convertible securities (SAFEs / KISSes) or convertible notes. E.g. $200k on $3m.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

View from Seed

MAY 29, 2019

As funds have institutionalized, seed VC’s are increasingly focused on securing a meaningful ownership stake in the companies they invest in. But taken to the extreme, you would have rounds with only one lead and almost no one else on the cap table. These two forces go hand in hand.

Syndicate 267

Syndicate Syndication Cofounder Cap Table 267

venturehacks.com

MARCH 21, 2008

Learn more about: Advisors · Compensation · Equity 7 responses so far · Comments RSS # David · Mar 21, 2008 When I find an advisor and decide to work with him/her, what legal paperwork should we sign to secure that 1-2% stock after series A for the advisor? I don’t think we can just SAY it, right? Learn more.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Austin Startup

MAY 17, 2017

My experience has been that getting trustworthy VCs on your cap table pre-Series A is generally a very good thing, so long as their participation is not contingent on terms that effectively lock you into having them lead your Series A. Originally published at Silicon Hills Lawyer.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

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. For example, our hypothetical startup never spent more than halfof one round before securing the next.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Startup Lessons Learned

MAY 4, 2021

And all the security and backups were being kind of managed by this company. And I guess what it means in practice is companies have shares, which are securities like stocks that can be traded out there. They're not securities, they are commodities, they're tokens of various types, rewards tokens, governance tokens.

IPO 113

IPO Cofounder Technical Review Government 113

Austin Startup

DECEMBER 10, 2017

I no longer use links for security reasons, plus this is all destined for print at some point.) 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.

Georgia 48

Georgia Startup Incubator Harvest 48

abovethecrowd.com

JUNE 2, 2021

Electronic order matching systems that match all supply and demand for securities to determine a fair market price have been used in our financial markets since the early 1980s (approaching 40 years). These are the parties on the cap table prior to the transaction. Investment banks simply do not match supply and demand.

IPO 82

IPO Customer Matching Silicon Valley 82

Professor VC

AUGUST 14, 2012

And the company has only one investor on the cap table but can (if they wish) take advantage of a larger group network. I'm guessing (if FC proves successful) that there will be unsophisticated unaccredited investors making investments and that the SEC may see this as a public offering of securities.

Accredited Investor 42

Accredited Investor SEC Cap Table Angel Groups 42