Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. Some thoughts on raising angel money. So let me weigh in more loudly than in the past.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Both Sides of the Table

NOVEMBER 14, 2017

This financial leader could well have come through the finance org at another startup or at a larger company but they often also can come from strategy consulting (Bain, BCG or McKinsey) or through investment banking (Goldman Sachs, Morgan Stanley, etc.). and we were met with weak demand, slow growth and high costs.

Operations 286

Operations New York City Technical Review Startup 286

David Teten

JANUARY 19, 2021

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Santa Clara University shares their demand dividend structure. . Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Steve Blank

APRIL 1, 2020

Others are cutting their valuations. ” Board members gave her a wakeup call: there was either going to be a much more realistic assessment tomorrow based on her first-hand customer conversations, or a new CEO. With more work from home happening, all of these services will see increased demand from companies.

South Korea 334

South Korea Salary Business Model China 334

Women Entrepreneurs Can

MAY 13, 2024

Conversely, lackluster economic data may trigger concerns about sluggish growth or recessionary pressures, prompting investors to adopt a more cautious approach. Conversely, weak economic indicators signalling economic slowdown or deflationary pressures may lead central banks to adopt accommodating measures, such as lowering interest rates.

Stock 52

Stock Valuation Marketing Conversion 52

The Startup Magazine

MARCH 17, 2020

Improve conversion rates on your website. Plugging holes in your sales funnels to increase conversion rates. Festive seasons, holidays, and special occasions that increase the demands for specific products. Some of the threats to watch out for include: Emerging competitors and shifting market demands. eCommerce.).

Marketing 110

Marketing Intellectual Property eCommerce Advertising 110

ithacaVC

NOVEMBER 14, 2014

I have written about startup valuations previously. If you are advising startup founders, I strongly suggest having them read all 4 of the posts to get the lay of the startup valuation land. Here is Walla’s post: I can’t tell you how many times I’ve had this conversation. Valuations of other companies like you.

Valuation 69

Valuation Startup Down Round Early Stage 69

Both Sides of the Table

JANUARY 22, 2014

I had an enjoyable conversation this morning with a young team straight out of college this morning and they were calling to ask advice on how to approach fund raising (angels vs. VCs, how to select a VC, etc.) You don’t really have much to go on to decide who would make a good fit. Reputation of firm? Of partner?

Portfolio 364

Portfolio Chicago Sales Incubator 364

David Teten

DECEMBER 3, 2019

Tim Friedman, Founder, PE Stack , said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. For our content creation, we use tools such as Canva (graphic design) and GoToStage (webinars platform) to create and share content for prospects to find.”.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Up and Running

JUNE 14, 2017

Others believe in the start small, grow strong approach: build a small version of the app, test user demand, and then take it from there. And that, by the way, was a great conversion rate for a simple survey-based research for the initial free subscription version of Recycler Spotter. He ended up saying that he would rather wait.

Technical Review 96

Technical Review Distribution Redemption Demand 96

Gust

OCTOBER 21, 2011

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Cracking the Code

SEPTEMBER 12, 2021

As the company announces its $530 million Series F at a valuation of $8.5 As at the beginning, we’re helping users in the region embrace the product by fulfilling inbound demand, and reaching out to similar users to ensure they’re aware of Snyk. Most importantly, an investor must be someone you get along with.

Community 62

Community Cofounder Security Open Source 62

Feld Thoughts

SEPTEMBER 27, 2011

Some sort of conversion does occur. In the case of an early-stage startup that hasn’t issued preferred stock yet, the debt converts into stock of the acquiring company (if it’s a stock deal) at a valuation subject to a cap. Usually we see 2-3x, but in later stage companies, this multiple can be even higher. Typical language follows.

Conversion 96

Conversion Sales Later Stage Preferred Stock 96

The Startup Magazine

JUNE 1, 2023

There are currently tons of “zombie” startups that have runway, but growth has slowed and they have valuations that they won’t be able to grow into. If the answers are no, have an honest conversation with your VCs today. Ten back and forth emails can often be resolved in a 30-second phone conversation.

Early Stage 115

Early Stage Los Angeles Silicon Valley Cofounder 115

Hunter Walker

AUGUST 7, 2017

Employee options pools, typically created at the point of financings, shouldn’t be treated as haggling over dilution, but rather a strategic resource that will help founders build the best team and, by extension, a more valuable company. As you can see, Weekend VC Twitter gets pretty wild and crazy!!!!

Equity 93

Equity Pre-Money Valuation Option Pool Founder 93

Austin Startup

AUGUST 20, 2017

Keep the valuations consistent with company progress. Messy cap tables can come back to haunt you when you do a financing or sell the company. The bottom line is that the pedigree of your investors will have much to do with your ultimate valuation and with your enjoyment of the startup experience. Are the logistics manageable?

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Hunter Walker

JANUARY 10, 2022

I really enjoy our conversations and am especially glad you’re up for some candor, because it’ll help provide some insight into the state of the startup and funding market. Homebrew was on the board of a construction tech startup called BuildingConnected , having led their seed financing. Ok, first, let’s provide some backstory.

Cofounder 88

Cofounder Founder Acquisition Startup 88

Hearpreneur

JANUARY 20, 2021

and particular regions of the world would see a spike in COVID cases, any consequent declines in demand for our services would be offset by increased demand elsewhere, thus ensuring a consistent flow of business and no interruption of workflow during these challenging times. Thanks to Josh Stomel, Turbo Finance ! #8-

Entrepreneur 118

Entrepreneur Mobile Valuation Global 118

Steve Blank

NOVEMBER 5, 2009

Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. When you are presenting to a VC there are two conversations going on – the one you are presenting and the one that investors are thinking as they are listening to your presentation. (If

Customer Development 267

Customer Development Developer Customer Silicon Valley 267

Ben's Blog

MAY 24, 2021

Second, by better matching supply and demand, direct listings have generally mitigated the magnitude of IPO Pops, thus engendering better overall price discovery. As noted above, the demand side of the equation — whether IPOs are priced above their initial filing range – also influences the size of the IPO float. 1990-1998 13.3%

SEC 36

SEC Accredited Investor IPO Technical Review 36

Eric Friedman

AUGUST 18, 2021

One dimension is a pretty firm belief that starting financial services companies should not be as hard as it is, and that there is demand in the market for yet another venture fund focused on functionally day-zero companies in financial services. This doesn’t concern any specific industry, but that kind of behavioral finance.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

steveblank.com

JULY 8, 2011

signup, upgrade, trial pricing Zuora – online subscription management FeeFighters – find the cheapest credit card processors HealPay – Collections made easy Customer Support Tender – support, knowledgebase tool for your site GetSatisfaction - conversations between companies / customers.

Software Review 110

Software Review Startup Silicon Valley Analytics 110

Hearpreneur

JANUARY 13, 2021

and particular regions of the world would see a spike in COVID cases, any consequent declines in demand for our services would be offset by increased demand elsewhere, thus ensuring a consistent flow of business and no interruption of workflow during these challenging times. Thanks to Josh Stomel, Turbo Finance ! #8-

Entrepreneur 62

Entrepreneur Mobile Valuation Global 62

The Equity Kicker

JULY 8, 2019

This is what brings us to the second big difference: the cost of Applied Venture is too large to finance from a standard VC management fee. . Different funds finance the cost of these teams with a differing weighting of asking portfolio companies to pay for services, larger than normal management fees, and reduced compensation for partners.

Portfolio 84

Portfolio LP Venture Capital Partner 84

Feld Thoughts

FEBRUARY 15, 2016

While going through my daily reading this morning, I came across a bunch of posts talking about how the sky was falling, Silicon Valley was in turmoil, financing was drying up everywhere, and all the unicorns were doomed. Buried deep within in a nice reminder of one of my fundamental beliefs.

Silicon Valley 70

Silicon Valley Term Sheet Early Stage New York 70

Feld Thoughts

JUNE 2, 2015

Or, if you just want the paragraph, it’s: “If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest.”.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Both Sides of the Table

SEPTEMBER 17, 2017

I believe the massive valuation increases in cryptocurrencies we’ve witnessed of late are not based on any fundamentals other than speculation and a drive for a quick profit by many who have gained from the market hype. What I can tell you from my vantage point? boom where many companies had deeply inflated values.

Government 280

Government Distribution Stock United States 280

Both Sides of the Table

MARCH 6, 2011

Might as well cut off our conversation and just restart it 48 hours later on camera for This Week in VC. I accidently blow the cover of a hot startup raising a round of financing on AngelList (oops!) – hint – it’s a product that I talk very openly about loving but I’m not an investor. So I thought, WTF?

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

Startup Company Lawyer

JANUARY 11, 2010

I seem to be doing a lot of pre-Series A convertible bridge note financings these days. As I have written previously , I think that convertible notes with even large conversion price discounts (e.g. 50%) or warrant coverage are typically more company-favorable than a Series A financing where a valuation is set.

Angel Investor 39

Angel Investor Valuation Bridge Financing Preferred Stock 39

www.vccafe.com

MARCH 11, 2013

on demand billing and fraud management. GetSatisfaction - conversations between companies / customers. easy business finance software. YCombinator Series AA Equity Financing Documents. Seed Stage Valuation Guide. Startup Threads. Videos/presentations. SlideShare. Haiku Deck. GoAnimate *. Customer service.

Software Review 53

Software Review Technical Review Startup 53

Software By Rob

APRIL 2, 2014

This can lead to complex transfer arrangements between buyer and seller which can be a deterrent for investors from the outset and is also an ongoing headache for both parties post sale as it will often involve contingency based financing agreements. Build and utilise the mailing list. Cultivate a quality affiliate network.

Affiliate 67

Affiliate Valuation Reputation Sales 67

pandodaily.com

NOVEMBER 29, 2012

” In off the record conversations, many angels have expressed the urgency of self-discipline. Lastly, seed-stage entrepreneurs who have pushed for the maximum valuation possible haven’t done themselves any favors. . “Too many companies are one pivot away from something they can’t even articulate,” he says.

Technical Review 93

Technical Review Silicon Valley Incubator Syria 93

Software By Rob

APRIL 2, 2014

This can lead to complex transfer arrangements between buyer and seller which can be a deterrent for investors from the outset and is also an ongoing headache for both parties post sale as it will often involve contingency based financing agreements. Build and utilise the mailing list. Cultivate a quality affiliate network.

Affiliate 27

Affiliate Valuation Reputation Sales 27

www.quora.com

JANUARY 16, 2011

The more structured the effort of the 'distribution' people will be, the clearer the communication with design and technical people and the higher mutual respect/valuation. A startup is a major commitment with many ups and downs, hard decisions to be made and uncomfortable conversations to be had.

Technical Review 51

Technical Review Startup CTO Hire Cofounder 51