Remove Conversion Remove Metrics Remove Revenue Remove Vesting
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Why You Need to Ring the Freaking Cash Register

Both Sides of the Table

The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs. I have this conversation all the time.

Burn Rate 412
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Bad Notes on Venture Capital

Both Sides of the Table

There were no metrics. Him: On metrics. Revenue multiple? If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. These are all real conversations. of the time I have no vested interest in having the debate. So a convertible note was easier. Your A round?

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Should Your Startup Give Performance-Based Warrants?

Both Sides of the Table

Plus, we’re all allured by the false sense that our contract with BigCo is going to “make us&# because once they start using us it will spread like wildfire and the revenue will flow in. They negotiate a “master agreement&# to work with your company with some maybe minimum guarantees in terms of revenue.

Warrant 298
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Why you should never have a data room — the most counter-intuitive fund-raising advice you’ll ever…

Both Sides of the Table

A detailed financial model that shows your anticipated revenue, costs and profits (Income Statement) as well as your balance sheet and cashflow statements. VCs (and LPs) have a vested interest in having more data, whether they want to invest in your company / firm or not. They aren’t doing this viciously?—?they

Cap Table 336
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Bad Notes on VC

Gust

There were no metrics. Him: On metrics. Revenue multiple? If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. These are all real conversations. of the time I have no vested interest in having the debate. So a convertible note was easier. Your A round?

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Keep It Under Your Hat: Valuation Caps and the $650 Million Sale of MySpace for $125 Million

Gust

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. of MySpace, Inc.

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Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model. These include: ·       Vesting of Founder Stock. This is why a bottom up approach is more credible.