Both Sides of the Table

FEBRUARY 15, 2016

How much your company should burn should also have a direct correlation with whom your existing investors are and I strongly advise that you have open conversations with them about their comfort levels and also the level of support you are likely to receive going forward.

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Burn Rate Cap Table Valuation Software Review 150

View from Seed

SEPTEMBER 23, 2019

My partner Rob has previously written some thoughts on how to approach that conversation. What not to include is directly stating valuation expectations.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

View from Seed

FEBRUARY 12, 2020

I notice some founders (from YC in particular) have been trained to say something like: “we are just starting the process, but things are moving faster than we expect and we are already scheduling follow-up conversations and partner meetings.”. Some founders lay out a specific time frame for when they hope to get the round closed.

Term Sheet 364

Term Sheet Burn Rate Founder Partner 364

David Teten

SEPTEMBER 5, 2014

I’ve also presented at a range of industry conferences on how institutional investors can use professional networks for research , origination , market research , and value creation. Over the past 15 years we’ve built this amazing membership to serve our core clients – leading investors, corporations, consulting firms, and nonprofits.

New York 114

New York Technical Review Networking Advisory Board 114

Hunter Walker

SEPTEMBER 12, 2022

And while I passed on leading their seed, I did contribute a smaller amount into the financing, along with three subsequent pro rata/super pro rata investments. I agreed and we subsequently did a TechCrunch Live discussion together with a follow-up blog post in her newsletter.

Cofounder 96

Cofounder Lead Investor Founder Restful 96

techcrunch.com

APRIL 26, 2013

First, AngelList Invest is available to any company on AngelList that has a top-tier lead investor. And the lead investor has to be putting in at least $100,000 in capital, says Ravikant. Using today’s data on AngelList, that includes 300 startups. Other criteria include that the startup needs to be U.S.-based,

SEC 61

SEC Accredited Investor San Diego New York City 61

OnlyOnce

APRIL 27, 2021

Here are four tough conversations you may have to have along the way, with some suggestions on how to navigate them. All of these conversations need to come with a point of view of why independence and diversity matters to your company, a lot of empathy, and appreciation for the value the person brings to the table.

Vesting 48

Vesting Cofounder Startup Term Sheet 48

Pascal's View

JULY 9, 2017

At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. This is not uncommon—and it is a problem precisely because the notes are being used improperly.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

View from Seed

JANUARY 11, 2021

Said one investor, “We may have overdone it on socialization at the expense of productivity.”. Of the eight venture capitalists we interviewed, six commented that they felt more efficient and were able to have more early conversations during this period than before.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

Hippoland

APRIL 9, 2017

This leads investors to believe that there is something either really wrong with your business or that you, as a founder, are not sharp. Either your existing leads are junk / not qualified, in which case, you should own up to it. But, whatever it is, something doesn’t add up, and you need to be able to address this.

Cofounder 48

Cofounder Early Stage Software Review Naming 48

View from Seed

OCTOBER 21, 2014

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

Valuation Founder Seed Stage Angel Investor 336

ReadWriteStart

JULY 18, 2011

The conversation at investment banks was 'why don't we have one of those?'. How many seed investors should you take money from? Typically 5 to 15, with a strong lead investor with relevant expertise, passion, time to work with you and a great rolodex. For 10 years there have been no gazelles to take down.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

This is going to be BIG.

FEBRUARY 27, 2011

The right lead investor and the right amount of cushion in a raise can help with the best defense against scaling disaster—hiring. Wouldn’t it be better to walk into a hiring conversation knowing that you can’t be outbid for the dream hire? Make sure you’ve got sure footing to get to the next level.

Dilution 104

Dilution Equity Hiring Partner 104

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

Both Sides of the Table

MAY 30, 2018

Before raising capital you need to have a conversation with your existing investors to get a sense on what they’re thinking or at a minimum you better have an intuitive feel for it. Many investors can also be the opposite situation where you’re so successful that everybody wants to invest.

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Austin Startup

SEPTEMBER 27, 2011

Spredfast, a leading social media management system provider, today announced it has raised $12 million in Series B funding led by InterWest Partners. Also participating in the round is Austin Ventures, the lead investor of the company’s $3.6 million Series A round.

Lead Investor 74

Lead Investor Social Media Austin Channel 74

Feld Thoughts

MAY 3, 2010

The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. All of the conversations about customer are really about how the customer uses the product and the value the product brings the customer. Not interested, not aware of, not familiar with, but obsessed.

Product 148

Product Cofounder Lead Investor Software 148

ReadWriteStart

MAY 9, 2018

The company’s growth is largely thanks to its collaborators – Travelport, its first investor and incubator, lead investor 7 Gate Ventures, and Real Venture. It achieved a conversion rate of up to 4.48%, approximately twice as high as the next leading online travel agency (2.4%).

Widget 64

Widget France Canada Aggregator 64

Scott Edward Walker

JUNE 9, 2019

Pro rata rights are relatively standard and non-controversial; however, founders should try to limit such rights solely to “Major Investors” (which is typically defined to include only those investors that will own a substantial number of shares – e.g., a lead investor).

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. If you think the other investors will be super value-added – no problem! For me it’s clear.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

David Teten

SEPTEMBER 6, 2015

Some corporate funds now lead rounds. Others follow independent financial lead investors and most require that independent investors be part of the syndicate. Teten: What makes for a good vs. bad corporate venture investor? Corporate VCs are at the table with all the other venture funds.

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

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. The needs of the lead investor for ownership? A round that is most accommodating for the existing investors while allowing you to get new people involved?

Cofounder 89

Cofounder Founder Acquisition Startup 89

Both Sides of the Table

OCTOBER 14, 2009

That’s what “information rights&# are for and you can promise the investor to meet 1-on-1 on a quarterly basis. The second scenario is where there are too many investors (egos?) I’ve never seen a junior VC person speak out and try to drive the conversation with the partner also in attendance. in a company.

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

Hippoland

JANUARY 4, 2017

Usually, an equity round is kicked off by a “lead investor”. Typically, this lead investor decides the terms of the round and also invests the majority of the money that will go into your company. That lead investor will also usually help you fill out the remainder of your round with other investors.

Convertible Security 48

Convertible Security Equity Security Silicon Valley 48

ithacaVC

DECEMBER 9, 2018

Doors open, conversations are easier, business happens. Sure, the person will ultimately typically need to be mutually agreeable to the lead investor and founders but having the founders source the person strikes the right balance in my opinion. This is common sense. The benefits of the credibility boost are enormous.

Stock Options 40

Stock Options Salary Lead Investor Founder 40

Agile VC

JANUARY 12, 2012

Good investors try to be clear in terms of what they look for in terms of progress and milestones of the startups they invest in. Occasionally though, a “not yet” response simply stems from the inevitable staging of conversations that happens in any startup’s fundraising process.

Seed Stage 100

Seed Stage Silicon Valley Syndicate Syndication 100

Rob Go

FEBRUARY 3, 2014

The idea is to get a small but solid commitment from these people, so that when you have your first conversation with a lead, it doesn’t feel like you are starting from scratch, and there is built in credibility. This is kind of the equivalent of “I’m in as long as you have a lead” but sounds a lot better.

Term Sheet 73

Term Sheet Due Diligence Valuation Seed Stage 73

This is going to be BIG.

FEBRUARY 17, 2016

So yeah, let's have *that* conversation. If you're a startup investor, you have to take risk somewhere. Seed CX operates in areas where there have been recent regulatory shifts, which present the potential to innovate in new or obscure markets. This will include hemp and related products. No risk, no return.

Chicago 60

Chicago Security Lead Investor Government 60

Both Sides of the Table

MAY 13, 2018

If you’re raising a round where a new lead investor would invest $5 million the VC fund must have no less than $100 million and if you’re looking for them to write $15–20 million as the lead their fund realistically should be at least $400 million. How Many Investors Should You Talk to in a VC Fund Raise?

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

www.seriesseed.com

DECEMBER 9, 2012

You can follow this conversation by subscribing to the comment feed for this post. This is not normal nor is it, in my opinion, acceptable or for that matter practical given that there rarely is a lead investor counsel in an angel round and if there is one it's likely not a real angel round but an institutional round anyway.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Gust

DECEMBER 27, 2012

You should know every metric regarding customer acquisition, conversion and retention. Accelerators typically provide several months of intensive mentoring, at the end of which they host a Demo Day to introducing all their graduating companies to a large number of local angel investors.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

David Teten

JULY 12, 2017

Steve Brotma n of Alpha observes, “In general, for any co-investor, the higher the quality of the institutional VC firm lead for the new round and the more reasonable the valuation, the better the odds of a coinvestment. Hence, if Sequoia is the lead and the valuation is reasonable, it’s near 100% chance.

Syndicate 60

Syndicate Syndication Institutional Investors LP 60

Rob Go

JULY 17, 2014

Prospective LPs evaluating NextView tend to focus their due diligence on conversations with these folks as well as other trusted participants in the startup community that are likely to have a POV on us. We want to be able to comfortably lead these rounds and speak for 1/3 – 1/2 of the capital or more.

Seed Stage 69

Seed Stage Early Stage Due Diligence Liquidity Event 69

Startup Lessons Learned

JULY 2, 2020

She believed so deeply in Curative's new mission and the science behind it that she went out and pitched investors on a company she didn't even work for--and got results. You can listen to our conversation on Apple , Google, or wherever you like to download podcasts. Here's my conversation with Curative.

Curation 60

Curation Government Los Angeles Partner 60

Rob Go

AUGUST 9, 2016

Think of it this way, an investor may invest in 1-3 deals a year, and build a portfolio of 7-12 active companies that they are point on at any given time. Entrepreneurs are typically only choosing one lead investor and board member per round. But often, it is not. Here are a couple suggestions on this.

Term Sheet 28

Term Sheet Due Diligence Lead Investor Portfolio 28

ithacaVC

NOVEMBER 14, 2014

Here is Walla’s post: I can’t tell you how many times I’ve had this conversation. The valuation only exists if investors validate it. Traditionally, there’s a lead investor that validates a valuation, but a lot of companies now raise without a lead.

Valuation 69

Valuation Startup Down Round Early Stage 69

Bryce Dot VC

FEBRUARY 12, 2015

terms that were most important to us and to founders: cash distributions and contingent equity conversion. model cash distributions can be paid out to investors vs. a lump some return at the time of an exit. It also facilitates the two elements of the indie.vc Distributions The heart of the indie.vc Within the indie.vc

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San Francisco Distribution Equity Delaware 40