VC Cafe

FEBRUARY 27, 2024

A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? Defining the pre-seed round It’s futile to look for ‘one true’ definition.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Startup Professionals Musings

SEPTEMBER 14, 2010

The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Venture capitalists and later round investors like the preferred convertible shares. These “IV drip” financings may reduce risk for investors, but put more pressure on founders. Anti-dilution protection.

Term Sheet 227

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

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

ithacaVC

FEBRUARY 1, 2018

It is highly typical for a startup to have small investors on its cap table. 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. Here is a quick guide.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

The Equity Kicker

MARCH 24, 2015

Everyone loves a high valuation and it’s natural for founders to want to minimise dilution. They will most probably go on to raise multiple rounds of venture capital after all. YC’s Sam Altman explained why in a post last year: Startups are usually a pass-fail course — either you succeed or you don’t.

Valuation 60

Valuation Down Round Dilution Venture Capital 60

Both Sides of the Table

FEBRUARY 8, 2016

Much has changed in the past four months of the technology startup world and how outsiders value the business. Optimize for a W more than % dilution in these circumstances. Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

This is going to be BIG.

JANUARY 17, 2016

They might have to get another round in, and that round will most certainly be a down round. They might be doing board meetings more frequently, coaching first time founders through layoffs and debating with their partners which companies they should bridge until things thaw out. They're just.

Dilution 60

Dilution Portfolio China Down Round 60

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. 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 Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

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. — 23 Comments.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. A lot of startups that end upgoing public didnt seem likely to at first.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

VC Cafe

JUNE 10, 2022

The market correction has come for series A and seed startups. For the past few week I’ve been sharing here the impact of the current downturn that started in the public markets on startups and venture capital. Until now, early stage startups were relatively unaffected. It’s not just the prices that are coming down.

Valuation 151

Valuation Marketing Venture Capital 151

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. 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.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

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? Many startups these days are first-time entrepreneurs. is lowered.

Equity 40

Equity Employee Founder Cofounder 40

Both Sides of the Table

FEBRUARY 14, 2016

” “Mark has a vested interest in talking down valuations of startups.” Most prefer not to say this publicly for two reasons: 1) they have an entire portfolio of startups, many of whom are raising capital and 2) they prefer not to be attacked publicly or seem “anti entrepreneur.” goes into a startup.

Valuation 150

Valuation Down Round Startup Later Stage 150

abovethecrowd.com

APRIL 20, 2016

In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “ The Age of the Unicorns ” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.” Next came Rolfe Winkler’s deep dive “ Highly Valued Startup Zenefits Runs Into Turbulence. ”

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

NZ Entrepreneur

JULY 8, 2019

I waited for the ‘casino-like’ world of startup investing until I was 28 years old, putting $10,000 into a friend’s software distribution company – a tidy sum for me at that age. There are numerous unforeseen and unknowable challenges when running a startup; one person’s experience is rarely sufficient to identify a great solution.

New Zealand 42

New Zealand Entrepreneur Valuation Dilution 42

Reid Hoffman

JUNE 8, 2021

While many travel industry leaders chose to “go dark,” as Airbnb CEO and co-founder Brian Chesky put it , while they decided how to navigate next steps, Chesky took a different approach: He got candid. Today, we are thrilled to have Airbnb CEO and co-founder Brian Chesky with us. Not that we should have more committees.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

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. Investors had grown too used to the idea that any deal you funded would get marked up to a higher valuation in the next round and that’s clearly not always true. Some startups will have a hard time reorienting.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Bryce Dot VC

APRIL 21, 2016

In Bill’s world, ALL involved in the Unicorn market include Founders, Employees, Investors, LPs, even Sovereign Wealth Funds. If you read this post your takeaway might be that founders egos are crushed, employees options are worthless and Investors have very difficult conversations with their LPs. It will also minimize future dilution.

Silicon Valley 40

Silicon Valley Dilution Term Sheet Down Round 40

A Crowded Space

MAY 31, 2016

We expect there to be an increase in down rounds, flat rounds, inside rounds and various pay-to-play scenarios. These shut downs are likely to happen when companies are funded solely by seed funds and angel investors that have not reserved significant capital for follow-on investments.

Cram Down 60

Cram Down Pay to Play Angel Investor Warrant 60

Reid Hoffman

JUNE 8, 2021

While many travel industry leaders chose to “go dark,” as Airbnb CEO and co-founder Brian Chesky put it , while they decided how to navigate next steps, Chesky took a different approach: He got candid. Today, we are thrilled to have Airbnb CEO and co-founder Brian Chesky with us. Not that we should have more committees.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36