Berkonomics

AUGUST 3, 2023

When the need is high… For the rest of us, desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Both Sides of the Table

SEPTEMBER 18, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

SEPTEMBER 17, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Berkonomics

JUNE 8, 2017

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. I suspect that this seems reasonable if there is basically no due diligence due to the early stage of the companies. (By under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

www.paulgraham.com

APRIL 28, 2010

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Altgate

MARCH 8, 2009

There are three types of venture investing (early stage, “growth&# stage and later stage. Early stage means the first real investors in a startup when the team could be as small as 5-10 people. Early stage investing is complicated, hard work. But some will be saved. Also, the $1.5

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

Scalable Startup

OCTOBER 26, 2011

The second round is often for some or all of the following – corporate growth, go to market, turn the prototype into a robust offering, marketing costs, or to hire a sales force. It’s no longer based on a hunch, unless the company is in trouble and needs money to finish what the first round started.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

Both Sides of the Table

JUNE 5, 2016

In other words, it isn’t that VCs suddenly got smart, it’s that the costs of starting a company went down dramatically. This led median valuations to triple in 3 years and led to this stupid phenomenon that people refer to as “unicorns ,” which I am convinced will the the thing most historians laugh most about in this era.

Venture Capital 150

Venture Capital Silicon Valley Burn Rate LP 150

Both Sides of the Table

OCTOBER 18, 2015

Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation. Here is a chart to show you the median valuation of late stage private tech companies compared to traditional growth rounds of capital led by VCs and also vs. the public markets. 25% “down rounds?

IPO 150

IPO Venture Capital LP SEC 150