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How Much Should You Raise in Your VC Round? And What is a VC Looking at in Your Model?

Both Sides of the Table

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. It goes something like this … VC: “How much money are you raising?” One entrepreneur refrain I sometimes hear is “We want to raise some extra money for M&A activities.”

Burn Rate 247
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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

I wrote this because over the last decade I’ve seen a destructive cycle where otherwise interesting companies have been screwed by raising too much money at too high of prices and gotten caught in a trap when the markets correct and they got ahead of themselves. Again, prices are expressed as pre-money valuations.

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Founders Should Set Aside More Equity for Their Team & “Split the Pain” With Investors

Hunter Walker

Satya and I rarely see less than a 10% pool created at seed and Series A, but are increasingly engaging with founders about 12-15% pools, especially if you’re going to be hiring in-demand engineers (computer vision, AI) and/or (more typically post Series A), building out a senior executive team.

Equity 94
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When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336
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8 Questions to Help Decide if You Should be Raising Money Now

Both Sides of the Table

This conversation seems to come up very frequently these days both with portfolio companies and with entrepreneurs just looking for mentorship. For many businesses you should keep your costs low & your capital raises low until you discover whether you are really on to a big idea where there is market demand. 25% dilution).

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How to Talk About Valuation When a VC Asks

Both Sides of the Table

How you talk about valuation will of course depend on how well your business is performing and how much demand you have from other investors. If I assume 20–25% dilution that implies a price of between $20–28 million pre-money valuation ($25-$35m post-money). I’m not so naive as to completely believe that?

Valuation 324
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Knowledge Is Power: Convertible Note Financing Terms, Part IV

Gust

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. Investors would be repaid their principal, plus accrued interest, divided by the conversion price (let’s say 30% discount, so 1 – 0.3 = 0.7). a) payable upon demand as of the closing of such transaction; or. (b)

Finance 79