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

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

The Next Web

SEPTEMBER 29, 2013

They feel the money can and should be spent on ways to grow the company, so they shift into growth mode by hiring more employees, paying themselves, hiring salespeople, running paid ad campaigns, and spending on overhead. You know cost of acquisition at a low scale, so instead of 10 users you decide to test with 100 or 300 users.

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. And they hire very aggressive securities attorneys to represent their interests. There are a lot of dark, hard days. There is considerable internal debate around whether or not to solicit and/or accept outside venture capital.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112