Both Sides of the Table

SEPTEMBER 28, 2014

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. Conversely if you’re burning $600,000 per month (yes, some companies do) then you only have 5 months of cash left. Valuation.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

View from Seed

NOVEMBER 18, 2020

Sizing the ask incorrectly is one of the things I see founders get wrong most often, and it ends up having a meaningful impact to the fundraising process overall. Every ask implicitly suggests a valuation range. Conversely, a series A with a $6M ask suggests a lower valuation. That said….

Valuation 418

Valuation Founder Conversion Demand 418

ReadWriteStart

JULY 15, 2020

Startup founders are trying to figure out how to fundraise through a pandemic and economic crash. New talk of capital efficiency is gratifying, but there was another lesson from pre-COVID-19 valuation struggles. Venture capitalists and early-stage investors have told all of us, founders are critical to a startup’s valuation.

Valuation 91

Valuation South Carolina San Jose Balance Sheet 91

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. I have conversations with entrepreneurs and other VCs on a daily basis about fund raising, the prices of deals, how much companies should raise, etc. You can be pissed off, but I don’t set prices. That’s stupid.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Hunter Walker

SEPTEMBER 3, 2023

Holiday weekend here in the US means links for you to read Playing Different (Stupider) Games The Other End Of The Valuation Stick [Kyle Harrison, Contrary Capital] – Kyle puts out a new essay (almost) every Saturday and I really enjoy his consistent and clear eyed POV on venture capital. The former start the work.

Technical Cofounder 79

Technical Cofounder Cofounder Coder Canada 79

VC Adventure

JUNE 14, 2022

Most founders don’t feel they are getting value from their investors, even in areas like follow on rounds where they would hope to see specialized experience. But it certainly highlights the need for a deeper level of conversation between venture investors and their portfolio CEOs about where and how they can truly be helpful.

Technical Review 150

Technical Review Due Diligence Portfolio Venture Capital 150

Both Sides of the Table

SEPTEMBER 10, 2021

I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. On the one hand, you’re over paying for every investment and valuations aren’t rational. two founders in a garage?—?(HP

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Austin Startup

MARCH 22, 2021

In recent years we’ve seen mega-rounds of investment and sky-high valuations. billion Series D round giving the company a valuation of about $14 billion!* However, for a first-time founder, the prospect of building a fully-functioning marketplace can feel quite daunting?—?you’re They raised a whopping $2.4

Software Review 100

Software Review San Francisco Valuation Stock 100

Both Sides of the Table

AUGUST 14, 2017

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. But unlike the popular press reporting of this conflict — 80% of the time it is founder-to-founder conflict and not investor-to-founder conflict.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

VC Cafe

APRIL 4, 2024

While investments to generative AI startups are red hot, founders have to battle quite a few investor biases. Despite being less than 2 years old, Mistral is now looking to raise funding at a $2 billion valuation in December 2023. Shameless plug, at Remagine Ventures , we’re looking to back founders that have internalised this.

Generative AI 78

Generative AI Artificial Inteligence Technical Review ChatGPT 78

YoungUpstarts

JANUARY 10, 2018

How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? Minimizing losses in the year before you begin shopping around for buyers will increase profit and help you get that higher valuation. Fact is, you just don’t know whether your business is ready to sell.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Both Sides of the Table

FEBRUARY 12, 2019

And this era ushered in by Amazon changed everything from the age of founders to the skill sets required to the structure of the VC industry and even to the layout of cities (yes, I would proclaim that boldly that Amazon AWS affected city development). The “A Round” of my startup in 1999 was $16.5 thus the rise of “pre seed” investing).

Venture Capital 328

Venture Capital Technical Review Seed Stage IPO 328

Both Sides of the Table

NOVEMBER 14, 2017

As the idea went from innovating on software & systems to launching a company to rolling it out in the field brought on Rahul Gandhi as his co-founder to physically launch the company. At MakeSpace we had to build complex models to tell us how our pricing and conversion compared down to the neighborhood level.

Operations 286

Operations New York City Technical Review Startup 286

VC Cafe

JANUARY 27, 2021

We are taking the screen sharing experience to the next level, so that collaboration doesn’t get in the way of doing great work,” writes CEO and founder Tom Medema. Then there’s Bubbles , a chrome extension focusing on screen grab collaborations. “ Their latest round of 138 millions dollars, led by Viola Growth ?

Vertical 148

Vertical Video Technical Review Europe 148

David Teten

JANUARY 19, 2021

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Every Flexible VC structure allows founders to access immediate risk capital while preserving exit, growth trajectory, and ownership optionality. . Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

SoCal CTO

JANUARY 18, 2011

I have been working full time with two founders for about 10 months on full time basis. During that time one of the founders had mentioned that for the initial agreed time (3 months, equivalent dollars could be translated to 2% of equity but no agreement was reached at that time). Don’t put yourself in this situation.

CTO 167

CTO CTO Hire Equity Vesting 167

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

Up and Running

SEPTEMBER 19, 2017

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. A deal was reached after two phone conversations and within three weeks contracts were signed and the investment was funded.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Both Sides of the Table

JULY 6, 2016

When I hear the realism that comes from founders with setback it elicits an understanding of what it takes to be successful at a startup that frankly can’t exist unless you’ve walked in those shoes before. In London when founders failed they were ostracized in the press and culturally I believe it became harder to raise capital.

South Korea 261

South Korea Silicon Valley Los Angeles Japan 261

Startup Professionals Musings

MARCH 16, 2016

This term is currently applied to recent startups who profess a current valuation which exceeds $1 billion. Frothy startup valuations. Ron Conway , of SV Angels, and Reid Hoffman , LinkedIn's founder, are names often mentioned in this category. Prime examples include Uber, Airbnb and Snapchat. Could your startup be the next one?

Software Review 120

Software Review Sweat Equity Accredited Investor Angel Investor 120

SoCal CTO

JANUARY 18, 2011

I have been working full time with two founders for about 10 months on full time basis. During that time one of the founders had mentioned that for the initial agreed time (3 months, equivalent dollars could be translated to 2% of equity but no agreement was reached at that time). Don’t put yourself in this situation.

CTO 150

CTO CTO Hire Equity Vesting 150

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. Only you know.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

YoungUpstarts

OCTOBER 28, 2015

“And if you have a valuation cap; a higher cap is always better than a lower cap.” The primary terms for these types of transactions are the valuation cap and the conversion discount. Incorporation also protects the founders from a liability standpoint. ” The Cost of Financing.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

This is going to be BIG.

OCTOBER 12, 2020

That leaves me out raising with two funds under my belt and no big exit and no unicorn valuations. One of my founders texted me, “What are you telling people to do about the Coronavirus?” One just got a seed term sheet for twice the valuation I put in at in the pre-seed and the other is doing $200k/month in revenue.

LP 147

LP Technical Review Software Review Valuation 147

Startup Professionals Musings

OCTOBER 10, 2014

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation.

Founder 254

Founder Cram Down Angel Investor Equity 254

Feld Thoughts

JUNE 10, 2022

I like the quote she pulled out of me in our conversation. Brad Feld] says his “strong belief” that “just doing a clean resetting — at whatever the valuation so that everybody is aligned and dealing with reality — is much, much better for a company.” If you can do this cleanly, take the money.

Down Round 162

Down Round Ratchet Liquidation Preference Participating Preferred 162

Austin Startup

DECEMBER 15, 2020

Any tech or consumer startup with a black founder can apply to pitch at our Black in Tech Summit. Journey Foods - Food Science & Supply Chain Software Could you be next?

Founder 98

Founder Dallas Houston Term Sheet 98

View from Seed

NOVEMBER 23, 2021

I was doing a virtual AMA with a terrific group of underrepresented founders from Visible Hands last week and the conversation turned a little personal. I reflected a little on my own experience as well as on the experience of the hundreds of founders we have backed at NextView.

Startup 227

Startup United States Valuation Stock 227

Austin Startup

SEPTEMBER 10, 2017

TL;DR: Using a “tiered” valuation cap structure in a convertible note or SAFE can provide flexibility that bridges the gap between (i) what founders expect their company to be worth in the near future, and (ii) what investors are comfortable accepting now. Did you get a “good” valuation? What a valuation cap isn’t.

Valuation 48

Valuation Dilution Silicon Valley Seed Stage 48

View from Seed

JANUARY 11, 2021

The sudden arrival of the global pandemic has shifted the playbook for founders and venture capitalists. As high-conviction, seed stage investors, we are inherently relationship-driven, and we value meeting exceptional founders face-to-face. I can have a wider reach and a higher volume of 30 minute meetings with founders.”.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

Agile VC

APRIL 17, 2011

Kayak was started here in my backyard of Boston… co-founder & CTO Paul English and the product/engineering team is based here in Concord MA. Co-founder & CEO Steve Hafner and the business team are based in Norwalk, CT. Led by General Catalyst with participation by co-founders Steve Hafner & Paul English.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Startup Professionals Musings

MARCH 22, 2020

Offering debt is better than offering direct equity, especially in early stages when you have no valuation for setting equity percentages. Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation.

Management 308

Management Cram Down Angel Investor Equity 308

Austin Startup

JULY 22, 2021

Any software, hardware, or CPG startup in Texas with a female founder or co-founder can apply to participate. We’ve helped winners connect with customers, mentors, and secure millions of dollars in capital from partners like Google Black Founders Fund, Revolution’s Rise of the Rest Fund, Backstage Capital, and many other VC investors.

San Antonio 107

San Antonio Dallas Houston Founder 107

Berkonomics

AUGUST 10, 2023

Investor-friendly clauses in agreement There are also clauses in many such investor documents that allow the investor to override the founder and force a sale of the company if a proposed sale is attractive to an investor for liquidity, even if the founder feels that there is much more potential if the business is not sold at the present time.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. So it might actually be more productive for you to improve your conversion than to improve your ad buying, for example.

Metrics 150

Metrics Cost Acquisition Startup 150

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

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. But it is also a topic that many find esoteric and difficult to grasp.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49