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When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336
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Signaling Pricing Expectations Early in Seed Investment Discussions

Genuine VC

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136
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Both sides must be fair in a term sheet negotiation.

Berkonomics

Just a few of these terms include vesting, corporate structure, governance principles, financing strategy, valuation and exit strategy. As an example, twenty five years ago, most VCs used common share deal structures. It was not until the later 1980s that the preferred share structure became popular.

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Knowledge Is Power: Convertible Note Financing Terms, Part IV

Gust

What these approaches have in common is that they cap the investors’ upside such that even in the most spectacular of liquidity events, unless the notes convert to equity first at a lower valuation, angels don’t get anywhere near the payoff awarded to equity holders. a) payable upon demand as of the closing of such transaction; or. (b)

Finance 79
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The Pre-Seed FAQ

K9 Ventures

In order for a company to attract a full Seed round ($2M – $3M), that company needs to show an almost completed product, an advanced prototype, or some kind of traction/demand metrics. The amount of capital (and therefore the resulting valuation) also sets the stage for the next round of financing for a company.

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Cracking The Code: The Bessemer 10 laws of SaaS - Fall 2008.

Cracking the Code

Only after reaching $1M in CMRR should you consider hiring European sales and services execs behind customer demand. Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Philippe Botteri.

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Why Leave A Six Figure Corporate Job For Internet Entrepreneurship?

Entrepreneurs-Journey.com by Yaro Starak

I was trading real heavy hours for heavy dollars, and led a very mobile, demanding and by choice, a pressure packed lifestyle. I travelled all over the world wherever business deals were happening, gained tremendous experience and exposure to the Corporate landscape, and learned invaluable life lessons in my career.