Startup Professionals Musings

JANUARY 27, 2012

As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Anti-dilution protection.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Startup Professionals Musings

SEPTEMBER 14, 2010

As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Anti-dilution protection.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Gust

OCTOBER 17, 2011

As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Anti-dilution protection.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? The real question here is: why is it fair for founders to get so much more?

Equity 40

Equity Employee Founder Cofounder 40

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. It’s like we need a finance 101 course for entrepreneurs.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

ithacaVC

FEBRUARY 1, 2018

Founders often raise money from friends and family and other angels. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. And sometimes founders want to protect the financial interests of FFAs. Here is a quick guide.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Ben's Blog

JULY 16, 2013

When you go to fundraise, you will need to consider the possibility of a valuation lower than the valuation of your last round, i.e., the dreaded down round. Down rounds are bad and hit founders disproportionately hard, but they are not as bad as bankruptcy. Yes, we did a down round.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Both Sides of the Table

MARCH 30, 2016

Investors sat with the founder & CEO, Jason Spievak, and asked him what he wanted to do about the future. Great companies get financed. They had to focus on getting a “W” one day over the short-term dilution impact of raising at a price lower than they had set out to achieve.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Both Sides of the Table

FEBRUARY 14, 2016

But if you’re a seed investor and you’re worried that the A-round won’t get done if your post-money is too high you suddenly start paying less. Why Financing in Falling Markets is So Damn Difficult. Why Inside Rounds are Difficult? Many founders don’t understand why inside rounds are so difficult.

Valuation 150

Valuation Down Round Startup Later Stage 150

Bryce Dot VC

APRIL 21, 2016

“Why the Unicorn financing market just became dangerous…for all involved.” In Bill’s world, ALL involved in the Unicorn market include Founders, Employees, Investors, LPs, even Sovereign Wealth Funds. It will also minimize future dilution. Paying customers are the only surefire way to avoid future dilution?

Silicon Valley 40

Silicon Valley Dilution Term Sheet Down Round 40

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. If you are a company that is fundraising, keep in mind that there are a few different levers you can pull to change the amount of dilution that the founders will experience. How to pump up your VC valuation.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Ben's Blog

JULY 16, 2013

When you go to fundraise, you will need to consider the possibility of a valuation lower than the valuation of your last round, i.e., the dreaded down round. Down rounds are bad and hit founders disproportionately hard, but they are not as bad as bankruptcy. Yes, we did a down round.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46