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Why Raising Too Much Money Can Harm Your Startup

Both Sides of the Table

conversation literally every week with startups. So the temptation would be to ask for $5 million because that implies a $20 million pre-money valuation if you’re able to only give away 20% or a $15 million pre-money valuation of investors require 25%. I have this “How much should I raise?”

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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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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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The Changing Venture Landscape

Both Sides of the Table

And there is so much money around being thrown at so many entrepreneurs that many firms don’t even care about board seats, governance rights or heaven forbid doing work with the company because that would eat into the VCs time needed to chase 5 more deals. And the truth is that several entrepreneurs prefer it this way.

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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

At the end of the day Kayak’s playing a key role in the online travel process, but it appears more of the revenue comes from filling top of the conversion funnel rather than the middle or bottom of it. Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Author howerl.

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How to Fund Your Startup Without Losing Control

Up and Running

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. Background: Adam Carlson is a serial entrepreneur who has successfully raised private capital at three different technology startups.

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The Changing Structure of the VC Industry

Both Sides of the Table

pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. Because this is all VCs do and if we intend to work with all of our fellow VCs and entrepreneurs when the rain ends and the sun shines again our reputations matter greatly.