Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

ReadWriteStart

OCTOBER 7, 2010

Before I do, however, I want to talk about a thumb rule that I'd like to propose to entrepreneurs about raising money. So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. Value Of Insight Consulting, Inc.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Lightspeed Venture Partners

OCTOBER 7, 2012

The first company started as a BBQ catering business, and eventually focused in on their most popular product, a dip made of blended up chicken plus various sauces. While they were very complimentary of the team and product, they all gave versions of the “I’m not the right guy to help, so I’m out” pass.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

SEPTEMBER 29, 2009

But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. While the company continues to perform well it has come at a cost.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, playing coy, or quoting an exorbitant number. Marty Zwilling.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. The right number to focus on is pre money valuation as that is how an investor is valuing the company before the investment. Post money valuation = Pre money valuation + Investment.

Pre-Money Valuation 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164

Both Sides of the Table

FEBRUARY 17, 2011

This conversation seems to come up very frequently these days both with portfolio companies and with entrepreneurs just looking for mentorship. For many businesses you should keep your costs low & your capital raises low until you discover whether you are really on to a big idea where there is market demand. The result?

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Lightspeed Venture Partners

NOVEMBER 19, 2012

They believed that they could get customer acquisition costs to the $10-12 range, but as Cuban points out, that was just hope, they had no evidence to back this up. All e-commerce businesses should be examined through the lens of customer acquisition cost and lifetime value. The cost of shipping and handling is at least 4 x $2= $8/mth.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. Or, in the case of a convertible note, they’ll explicitly state a valuation cap. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. Price is always a consideration in investing, but particularly so if the entrepreneurs have shown an interest in an early exit. The entrepreneur took this offer.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). But it only costs $65k to buy a new food truck, so it is easy for others to enter the market. Barbara suggested that this was more money than the company needed.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. It could be building an early version of the product. Or even doing pre-sales or lead generation well before having a product.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

Startup Lessons Learned

JUNE 19, 2019

Meanwhile, we recently talked with him about his thoughts on 35 years in Silicon Valley, why the skill sets of venture capitalists and CEOs are so different, and why telling a good story about your product is so crucial. If they really could build what they said they could, then you knew that people would buy the product.

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. It could be building an early version of the product. Or even doing pre-sales or lead generation well before having a product.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

Genuine VC

JULY 30, 2012

In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: Lower than “market.” This approach is almost never a good idea. By definition, all entrepreneurs should think that their endeavor is truly exceptional. Above market.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

K9 Ventures

MARCH 23, 2011

Obviously, both the founders and the note holders have the common objective of getting the company funded; but assuming the company is fundable, there is a basic misalignment of incentives when it comes to valuation. The typical fix for this problem is to put in a cap in the note for the pre-money price for conversion.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. The option pool lowers your effective valuation.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

www.currentlyobsessed.com

MAY 28, 2010

Currently Obsessed Joe Heitzeberg – Entrepreneur | Tech Geek | MBA Home About Me Joe Heitzeberg is an internet entrepreneur who has started and sold two companies. Entrepreneurs are generally too focused on pre-money valuation, and VCs know this. Future value is key. cthomaschase great post.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42