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.

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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. Trendy Loot.

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Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

JUNE 22, 2011

This was an audience of mostly first-time entrepreneurs. It is great for entrepreneurs and great for VCs. So here is what I have been telling entrepreneurs privately for the past 6 months. What a bubble means for each entrepreneur. Still, market amnesia by ordinarily rational actors always surprises me. I believe that.

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Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

FEBRUARY 15, 2016

This has led VC & entrepreneur bloggers alike to similar conclusions: start raising capital early and be careful about having too high of a burn rate because that lessens the amount of runway you have until you need more cash. I’m surprised how few entrepreneurs have this open conversation with their investors.

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Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

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Ratchet Liquidation Preference Equity Stock 354

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

crowdSPRING Blog

APRIL 26, 2013

How To Attract Customers And Not Waste Your Marketing Budget – [link]. How To Attract Customers And Not Waste Your Marketing Budget – [link]. Q1 Venture Capital Spending & Number Of Deals Down, M&A Activity Drops 44 Percent And Pre-Money Valuations Plummet – [link]. ” – [link].

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Social Media Small Business Design Media 90

Lightspeed Venture Partners

OCTOBER 7, 2012

This does neither, so I’m out” Cuban said, “I see you guys not as entrepreneurs but as wantrepreneurs” I agree with him. In this way, they remind me of the Lifter Hamper entrepreneur. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

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 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

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. It is no wonder why they had less time for new deals.

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Burn Rate Valuation Pre-Money Valuation Private Equity 263

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Here’s the “what.”. And here’s the “why.”.

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

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.

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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

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. I like to tell entrepreneurs that the “fairway&# of fund raising is 25-33% per round. 5 million raised at a $9 million pre-money valuation or 35.7%

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Pre-Money Valuation Dilution Valuation PR 303

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

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Angel Groups Elevator Pitch Software Review Deal Flow 159

YoungUpstarts

SEPTEMBER 15, 2018

The pre-money valuation of other startups is based on the following factors. It is important for businesses to be duly evaluated because it’s the valuation of businesses that actually go on to draw investors. In a way, putting a value on their businesses helps entrepreneurs to generate liquidity.

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Pre-Money Valuation Valuation Sweat Equity Startup 124

Lightspeed Venture Partners

NOVEMBER 19, 2012

The company launched six months ago and so far has grown to 110 subscribers, with all customer acquisition coming from PR and referrals. 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. The others all passed as well.

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Pre-Money Valuation Alabama Valuation Churn Rate 166

YoungUpstarts

SEPTEMBER 4, 2017

For startup founders and CEO’s it’s also just as common to see them place too much focus on the amount of money raised, and the pre-money valuation, rather than the value that each investor can bring to the table. Entrepreneurs, business owners, senior managers at large corporations.

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

Agile VC

MAY 26, 2011

I also joke with Reid Hoffman that this was back in the days before he was “Reid” Reid’s an incredible entrepreneur, startup investor, and human being. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. It was a pretty good valuation for the time.

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Term Sheet Silicon Valley Technical Review Social Network 178

Both Sides of the Table

JULY 27, 2014

(not in video but late stage valuations have grown 24% compounded years for the past 4 years which is higher than any segment. Four years ago people paid $66m median pre-money valuation and are now paying $155m. This can’t all be driven by increased company performance).

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Valuation Pre-Money Valuation Later Stage Non-Compete 309

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.

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Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. First priority is real revenue, customers and contracts. It’s like trying to sell a home still being built at next year’s dream market price.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

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. And/or getting your first set of customers. 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

The Startup Magazine

SEPTEMBER 12, 2019

Tempted by large sums of money and the perceived validation that comes along with being funded, founders turn to venture capitalists to accelerate their company’s growth. Realistically, VCs expect 90% of their ventures to fail, but entrepreneurs expect 100% of their ventures to succeed. The expectations are fundamentally misaligned.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

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. And/or getting your first set of customers. 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

Feld Thoughts

JULY 14, 2015

The feedback is “come back when you’ve made more progress with customers.” ” They are running out of money. The term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless. The product gets a lot better.

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Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

BeyondVC

APRIL 12, 2005

Therefore, it remains quite difficult for the larger funds to dole out money in $2-4 million chunks, and the valuations are quite attractive at this stage. Where I do not want to be is in a Series B or Series C round in a "hot, momentum" company.

LBO 60

LBO Pre-Money Valuation Technical Review Software Review 60

David Teten

NOVEMBER 15, 2013

Asset management also shows the traditional earmarks of an industry ripe for disruption — most obviously, unhappy customers and extremely profitable incumbents. Almost every other industry collectively does what it promises; the restaurant industry does give all its customers food. Photo credit: JD Hancock.

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Management Pre-Money Valuation Venture Capital New Hampshire 114

Startup Lessons Learned

JUNE 19, 2019

Previously, on the venture side you wanted to invest as early as possible, because the first round of financing got you to a product, and then you'd get beta-type customers, and then you'd raise a second round at a much higher price, and the business could immediately take off from there. Employees are not entrepreneurs. Most hedge.

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159

Seeing Both Sides

JULY 15, 2009

Thus, the universe of financings that even the most experienced entrepreneurs get directly exposed to is typically 5-10 financings over a 15-20 year career. Year in, year out, Thus, VCs and entrepreneurs are not operating on an equal playing field when it comes to negotiating financings and interpreting the impact of the terms involved.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

venturehacks.com

OCTOBER 21, 2010

If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle You have successfully negotiated a $2M investment on a $8M pre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management.

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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.

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Valuation Channel Pre-Money Valuation Term Sheet 42

thestartuplawyer.com

FEBRUARY 24, 2010

Entrepreneurs often believe their startup company faces legal threats from only external sources. Even so, I believe the negative experience can end up producing a better entrepreneur if he or she applies lessons learned to current and future startups. He obviously never launched a startup and got shafted by a co-founder.

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Cofounder Founder Preferred Stock Startup 40

Seeing Both Sides

NOVEMBER 30, 2008

For the last five years, it was not atypical for a high-quality Series A company that raised an initial round of capital priced at, say, $5 million on a $5 million pre-money valuation to hit a few important milestones (e.g., And woe to the portfolio company whose VC fund gets tapped out too soon.

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Pre-Money Valuation Portfolio Post-Money Valuation Valuation 20