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Why Entrepreneurs Should Be Generous With Investors

YoungUpstarts

As well as how to work with pre and post-money valuations. Not compared to potential customers or lenders. Generous is not a word often associated with talking about negotiations between startup entrepreneurs and their investors. This instantly puts founders on guard, in a defensive position.

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NextView’s Greatest Hits

View from Seed

Taking Corporate Venture Money: When it Makes Sense “PayPal took on these investors in small part because it gave us an imprimatur in the stodgy and regulated world of financial services. Boxes vs Conveyor Belt Businesses “Box companies struggle to keep customers engaged and buying from the company over time.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

You are particularly vulnerable if: You have revenue concentration (few customers each providing a large total of percentage of your revenue). You have a large number of startup customers (because when markets crash they have a funny way of going bankrupt quickly or cutting burn precipitously).

Burn Rate 383
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The $10 Million Photo and Other VC Stories

ReadWriteStart

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

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Revisiting Paul Graham’s “High Resolution” Financing

Both Sides of the Table

Taking it from an investor perspective (not me, angels) I think it’s totally unfair to see early angels invest, take more risk, help you get to the next level through both sweat & money, and then pay a higher price because the round had a convertible note with no cap.

Finance 286
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A Guide to Using Authority & Social Proof in Fund Raising

Both Sides of the Table

Anything requiring lead generation and/or customer acquisition I call Matt Coffin. In my next post I’ll talk about using social proof in getting customer traction. We all want authorities who are smarter on specific topics than we are. So what are you waiting for? Go get your anchors.

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So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

When you raise larger rounds there is more “due diligence,” which includes: calling customers, looking at financial metrics, doing cohort analysis (looking for trends like changes in churn rates), evaluating competitor positioning and understanding more of the competency of your executive team.

Burn Rate 150