Both Sides of the Table

APRIL 20, 2011

They chose the name First Round Capital because they thought capital would be deployed most efficiently at smaller seed stage rounds considering the cost to build an internet business had come down drastically. He also says it is important to be able to participate in follow on rounds so as not to get “crammed down”.

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

Both Sides of the Table

MAY 5, 2013

Often that is a good incentive because it keeps VCs from screwing people over since a bad reputation or bad working relationships could cost you deals in the future. But in this case it works against the founders.

Down Round 302

Down Round Cram Down Valuation Reputation 302

Haystack

JANUARY 12, 2020

As valuations have gone up early, the cost of ownership has also risen, and in an early-stage fund where the loss ratio is likely to be much higher, high ownership has been increasingly important to these funds.

Seed Stage 106

Seed Stage Cram Down Early Stage Cofounder 106

Startup Professionals Musings

JUNE 2, 2013

The single most important ingredient of success is not the idea, but having a team in place that has impeccable integrity, can iterate the product quickly, pivot the business model as necessary, and keep costs down in the process. This requires a visible focus on the company’s revenue model, the costs to get there, and cash on hand.

Cram Down 269

Cram Down Angel Investor Intellectual Property Venture Capital 269

The Next Web

SEPTEMBER 29, 2013

Some metrics that I like to look for are: Lifetime value of a customer, average revenue per buyer, cost of a paying customer, registration rates, etc. For example, if you think the lifetime value (LTV) of your customer is $300 and in reality it is $60 but costs $80 to acquire, you’re going to go out of business. Your company will die.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Growthink Blog

MAY 23, 2011

Technical progress and market traction are much slower and cost a lot more than anticipated. A " black swan " investor appears out of the blue and backs the company - less impressed by the technology than by the talent, desire, and grit of the entrepreneur. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing.

Lean 244

Lean Silicon Valley Startup RSS 244