A VC : Venture Capital and Technology

NOVEMBER 7, 2016

I’ve written a bunch on this topic and here are two posts that address this exact issue: Founder Dilution – How Much Is “Normal”? Employee Equity: Dilution. I saw a blog post this weekend that looked at the IPO filings of 79 tech companies and calculated the ownerships of the founders and the VCs at IPO. The result of that analysis is that the average founder ownership at IPO was 17% and the average VC ownership at IPO was 56%.

Dilution 68

Dilution Founder IPO Equity 68

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Because the total percentage of equity will always equal exactly 100%, every time anyone gets another piece, by definition it “dilutes” all of the previous equity holders.

Dilution 64

Dilution Equity Vesting Stock Options 64

Both Sides of the Table

OCTOBER 14, 2011

Dilution. million pre-money valuation, which is a $10 million post-money) you get diluted by 25% (2.5m / 10m). But understanding how you’re likely to get diluted over time is a more difficult concept. So here is our crack at explaining the world of dilution to you.

Dilution 150

Dilution Pre-Money Valuation Valuation Equity 150

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. That’s the concept of what some call mathematical dilution.

Dilution 96

Dilution Equity Prospectus Sweat Equity 96

Ask The VC

OCTOBER 5, 2011

Today’s post of the day is from Nic Brisbourne (DFJ Esprit) and it titled What is anti-dilution/downround protection? Nic covers narrow-based, broad-based, and full ratchet anti-dilution with real examples using real math. Fundraising anti-dilution brisbourne broad-based anti-dilution full ratchet fundraising narrow-based anti-dilution vc post of the dayWell – I fell off that particular horse.

Dilution 33

Dilution Ratchet 33

Taffy Williams

AUGUST 26, 2011

The companies with low prices either had to dilute investors in a financing, had enough to survive, or went out of business. So when you consider the Dilution Effects of a financing, remember the following advice delivered by many old timers; “ It is Better to Have 10% of a Lot of Money, than Have 100% of Nothing.” You don’t want to dilute the investors too much, but you want enough funds to ensure you can weather any storm and that you will not run out of money.

Dilution 20

Dilution Redemption Valuation Stock 20

Inc Startups

FEBRUARY 14, 2013

But now there's a new wave of comments, this time from customers angry that the company would dilute the product they have come to expect. The bourbon distillery offers a perfect case study in how to anger your biggest fans: Take the product they love and water it down--literally.

Dilution 13

Dilution Demand Stock Product 13

Recent Buzzes - VC Experts, Inc.

FEBRUARY 23, 2011

There are three phenomena that trivialize even the best of investment strategies: Dilution, Dilution, Dilution.". The problem is, of course, dilution. Dilution - Dilution - Dilution. By Joseph W.

Dilution 11

Dilution Option Pool Prospectus Liquidity Event 11

Inc Startups

NOVEMBER 4, 2015

Do you even know the voice and tone of your company's communications these days? Maybe it's time to have a 2nd look

Dilution 19

Dilution 19

VC Ready Blog

JULY 6, 2010

Anti-dilution Provisions. While the timing of conversion is not a very hot topic in negotiating a term sheet, the anti-dilution provision can be if the investors decide to play hardball. Other adjustments, however, are intended to protect the investor against dilution caused when the company issues shares at an effective price-per-share lower than the price-per-share paid by the investors (a future financing at a lower price is called a “down-round”).

Term Sheet 11

Term Sheet Ratchet Preferred Stock Common Stock 11

VC Ready Blog

SEPTEMBER 13, 2010

When discussing a company’s capital structure, investors typically talk in terms of “fully-diluted capital” (a/k/a capitalization on a “fully-diluted basis”), rather than authorized or issued capital , because fully-diluted capital provides a more accurate picture of the company’s overall capitalization. There are two other important things to note about the way fully-diluted capital is calculated.

Common Stock 5

Common Stock Stock Preferred Stock Dilution 5

ArcticStartup

MAY 7, 2013

In 2011, Tekes Tempo launched with an idea to provide 50% non-dilutive funding to companies that would be building market-oriented services.

Dilution 11

Dilution Programming Global Customer Development 11

StartupCFO

SEPTEMBER 3, 2010

When entrepreneurs talk about dilution to their share ownership, most of the time they’re talking about dilution from outside investors. Yet, more dilution, especially early on, can come from adding co-founders which is something no one seems to talk about. I am in favour of having a co-founder. It gives you someone to bounce ideas off, energize you when you’re down, etc. Investors generally like them too.

Management 4

Management Dilution Equity Conversion 4

Recent Buzzes - VC Experts, Inc.

SEPTEMBER 14, 2011

Anti-Dilution provisions can be a key negotiating point when it comes to the Deal Terms of a new round of financing, especially in the presence of a. View an example of Anti-Dilution Provisions By VC Experts Analyst Team. Down Round. Broad Based Weighted Average can be a more friendly provision as compared to. Full Ratchet when it comes to the effects of equity % held by early investors and founders. See how these terms can differ when it comes to the structure of the.

Ratchet 6

Ratchet Cap Table Down Round Equity 6

Grade A Entrepreneurs

FEBRUARY 21, 2011

For most entrepreneurs, it’s hard to get funded, and then, when they receive a term-sheet, at the same time they are thrilled, they worry (for good or bad reasons) about dilution, often terrified at the idea that they might have been ripped off.

Term Sheet 8

Term Sheet Dilution Equity Entrepreneur 8

ReadWriteStart

JANUARY 27, 2011

I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature.

Dilution 7

Dilution Warrant Massachusetts Africa 7

VC Ready Blog

JULY 6, 2010

Anti-dilution Provisions. While the timing of conversion is not a very hot topic in negotiating a term sheet, the anti-dilution provision can be if the investors decide to play hardball. Other adjustments, however, are intended to protect the investor against dilution caused when the company issues shares at an effective price-per-share lower than the price-per-share paid by the investors (a future financing at a lower price is called a “down-round”).

Finance 3

Finance Ratchet Preferred Stock Common Stock 3

Winston-Salem Journal State/Region News

APRIL 11, 2017

AP) — Republican legislators have for a second time voted to dilute the power of North Carolina's new Democratic governor to run elections RALEIGH, N.C. (AP)

North Carolina 0

North Carolina Raleigh Dilution 0

Inc Startups

APRIL 28, 2016

In a world desensitized and diluted by incessant noise, has standing out from the crowdbecome a privilege preserved for the select few

Dilution 42

Dilution 42

OnlyOnce

MARCH 24, 2011

Although David is talking about taking in outside capital and founder dilution in pursuit of larger business growth and objectives, he is also getting to the same point about entrepreneur type. Business Entrepreneurship Venture Capitalists dilution entrepreneur equity Founders scalingSize of Pie, a.k.a. What Type of Entrepreneur Are You? Mmmm…pie.

Email 17

Email Customer Employee Dilution 17

A VC : Venture Capital and Technology

MARCH 12, 2017

Here is why: They defer the issue of valuation and, more importantly, dilution, until a later date. I think dilution is way too important of an issue to defer, for even a second. They obfuscate the amount of dilution the founder(s) is taking. Sometimes we get blamed for leading such a dilutive round, but I don’t care so much about that, I care about the fact that we are allowing these young companies to finance themselves in a way that allows such a thing to happen.

Cap Table 104

Cap Table Dilution Angel Investor Equity 104

Nick O'Neill

JANUARY 7, 2012

Entrepreneurship DilutionThe ruler of the world is always a master at one thing: ruling the world. Businesses are the same way: they exist to satisfy specific needs of their customers.

Demand 16

Demand Stock Business Model Advertising 16

A VC : Venture Capital and Technology

JULY 3, 2011

It's too dilutive to you and your co-founders and angels. First, try to dilute in the 10-20% band whenever you raise money. You might have to do more, but try hard to keep your dilution below 20% each round. Image via Wikipedia.

Dilution 144

Dilution Balance Sheet Early Stage Portfolio 144

ithacaVC

SEPTEMBER 10, 2012

But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership. It is legally possible to grant non-dilution via a contractual right. Those additional grants would prevent Exec X from being diluted.

Cap Table 0

Cap Table Stock Equity Stock Options 0

YFS Magazine

DECEMBER 7, 2015

Before you think about diluting your brand offering or price in order to serve everyone and anyone, here are five strategies you can use to attract the right customers.

Dilution 37

Dilution Customer Audience Acquisition 37

Early Growth Financial Services

MARCH 1, 2013

Bootstrapping helps you to focus on your product in so much as … Continue reading → Financial Planning bootstrapping dilution enterpreneurship entrepreneurs equity fundraise profit margins self-fund small business financial planning startup startup financials vc venture capitalOriginally published in SoCalTech. To self-fund or to raise funds? That’s the big question that many founders ask themselves as they try to get their product and service to market.

Entrepreneur 8

Entrepreneur Bootstrapping Product Development Product 8

Will Price

FEBRUARY 22, 2009

Sim over at Polaris Ventures is looking for founders to help him quantify dilution over the life of a company (financings, stock option refreshes, etc) and the impact of fund raising on the ultimate stakes founders enjoy in their companies. He will be sharing his findings on his blog. Take the survey here

Stock Options 0

Stock Options Stock Finance Dilution 0

Recent Buzzes - VC Experts, Inc.

SEPTEMBER 13, 2011

Anti-Dilution provisions can be a key negotiating point when it comes to the Deal Terms of a new round of financing, especially in the presence of a. Down Round

Down Round 0

Down Round Finance Dilution 0

Ask The VC

AUGUST 1, 2008

Dilution 2

Dilution Equity 2

Ask The VC

AUGUST 23, 2011

In addition, he’s created a variety of interactive examples that help you understand things like: Anti Dilution – Broad-based Weighted Average. Anti Dilution – Narrow-based Weighted Average. Anti Dilution – Full Ratchet. A few days ago I answered a question on AsktheVC about modeling cap tables. After a quick email conversation with Jeff Boardman (founder of LearnVC ), I realize I had left his product off the list.

Cap Table 69

Cap Table Dilution Ratchet Liquidation Preference 69

Recent Buzzes - VC Experts, Inc.

OCTOBER 28, 2009

There are three phenomena that trivialize even the best of investment strategies: Dilution, Dilution, Dilution.". If my students at Cornell University take away one thought from the entire semester of instruction, that thought is embedded in the following exposition: First, I draw on the blackboard an inverted bell shaped curve, the top of the curve heading downwards rather than up.

Venture Capital 0

Venture Capital Dilution Founder 0

Both Sides of the Table

JUNE 5, 2015

When you do, my 20% becomes 15% and thus my true price for your round is actually higher than it appears when I invested because I already know I’m going to face more dilution for options. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined). Then you’ll willing to take more dilution for them. As I mentioned if you raise $2m on $8m pre-money you take 20% dilution.

Dilution 106

Dilution Option Pool Post-Money Valuation Pre-Money Valuation 106

Rob Go

AUGUST 29, 2016

If there is a fixed post money on say, a $5M series A round, if the founder decides that they want to take on a bit more new capital, the existing shareholders eat all of the additional dilution.

Post-Money Valuation 45

Post-Money Valuation Valuation Dilution Term Sheet 45

This is going to be BIG.

OCTOBER 10, 2014

For those of you that have trouble doing division, not surprisingly, that puts the average dilution right around 20%, which isn''t surprising. Dilution. then you need to take a look at the dilution numbers. Dilution is the price and you''re all pretty much getting the same deal. If you''re oversubscribed, but don''t want to take additional dilution, you can usually move the price up. But what really counts is the dilution. Dilution.

Dilution 30

Dilution Pre-Money Valuation Valuation Revenue 30

Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool.

Option Pool 27

Option Pool Pre-Money Valuation Dilution Valuation 27

Recent Buzzes - VC Experts, Inc.

FEBRUARY 13, 2012

In the "modern era" of venture capital (1970 and beyond) the so–called anti–dilution provisions have become increasingly important. Like so many words in the glossary of venture capital, "dilution" has multiple meanings. The core concept, however, arises from a central fact: any new claimant to the assets and/or income of a firm reduces the percentage interests of the existing claimants

Antidilution 20

Antidilution LBO Dilution Venture Capital 20

Ask The VC

JANUARY 13, 2012

Percentage size of grant fully diluted. Total size of option pool and remaining available pool (absolute numbers and percentages fully diluted). Today’s VC post of the day is from Albert Wenger (USV) and titled Presenting Option Grants to Boards. This is feedback I give to CEOs 98% of the time after my first board meeting. While there is no standard for how to present option grants, Albert lays out a very clear set of eight pieces of data he likes to see.

Vesting 55

Vesting Dilution Option Pool Employee 55

A VC : Venture Capital and Technology

JANUARY 8, 2017

That means they will invest enough capital to avoid being diluted by the follow-on financing round. That hurts them because they get diluted by those rounds they can’t participate in. Reserves is the term VCs use to describe funds they “reserve” for follow-on financings of their portfolio companies.

Portfolio 98

Portfolio LP Cap Table Dilution 98

Both Sides of the Table

FEBRUARY 8, 2016

Optimize for a W more than % dilution in these circumstances. Founders hate them because they’re dilutive. Much has changed in the past four months of the technology startup world and how outsiders value the business.

Burn Rate 148

Burn Rate Cap Table Valuation Dilution 148

Ask The VC

APRIL 3, 2012

In the previous post I talked some about “re-up grants” In some cases, especially if there is a lot of dilution from a financing, there are occasionally broad grants across all employees post financing. However, in many cases, there aren’t, and employees should expect to take at least some of the dilution from subsequent financings, especially in up-round cases where the value of their underlying equity is increasing.

Stock Options 62

Stock Options Stock Vesting Dilution 62