Startup Professionals Musings

JANUARY 19, 2020

Venture capitalists (VCs) have long been seen as the top of the pyramid for startup funding sources, but in fact angel investors now fund over twice as many companies, according the Crunchbase. The cost of entry for tech startups continues to go down. Super angels have greater scope to match talent with a startup.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

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. The simplest illustration is the first VC funding round of a new startup.

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Startup Professionals Musings

SEPTEMBER 30, 2012

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. IPOs in 2008, the market was up to a still trivial 159 in 2011. After a record low of 39 U.S.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

Both Sides of the Table

OCTOBER 1, 2009

Bad stock markets mean less IPO’s and lower prices for M&A. If you’re a startup, in bad times there is less over-funding of your competitors and therefore less pressure to give everything away for free. Tags: Pitching VCs Start-up Advice VC Industry startup technology vc venture capital. million – take it.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Startup Professionals Musings

JULY 3, 2015

The visibility of Google, Facebook and a few others continues to propagate the myth that the ultimate objective of every entrepreneur should be to take their startups public via an initial public offering at the earliest opportunity. Facebook, for example, ended up raising almost $16 billion through its IPO.

IPO 120

IPO Initial Public Offering Entrepreneur Private Equity 120

Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. The downside is loss of control and financial dilution. Otherwise exit and startup with another idea.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

View from Seed

DECEMBER 4, 2019

At the same time, despite some realizations in recent years through M&A, PE acquisitions, and IPOs, the general sense I get from LPs is that the level of distributions don’t quite line up with the unrealized performance. This would suggest that TVPI would be performing well. So, how good is an outlier fund?

LP 256

LP IRR Distribution Portfolio 256

Both Sides of the Table

SEPTEMBER 16, 2010

But consider periods of time where the average time a company exists before acquisition or IPO is 7-10 years. I know some people think the whole market has been disrupted and startups and funding work differently these days. avoid being diluted). Tags: Startup Advice Tech Market Analysis VC Industry. But it is.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

Both Sides of the Table

JUNE 17, 2017

There are certain topics that even some of the smartest people I talk with who aren’t startup oriented can’t fully grok. It’s common cocktail party chatter to hear people confidently pronounce that some well known startup is sure to blow up because, “How could they succeed when they’re not even profitable!” What did they actually do?

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

NOVEMBER 6, 2020

It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. With major investors, your equity and return is diluted and delayed. Use flexibility to match your lifestyle.

Small Business 311

Small Business Small Business Administration SBA Equity 311

Both Sides of the Table

SEPTEMBER 28, 2013

So as a startup CEO you constantly have to suspend disbelief. A cautious person wouldn’t try to pry people out of Twitter right before their IPO to” join my cause!!” ” A startup CEO’s job is to absorb stress so the team doesn’t have to. The startup CEO was not the original founder.

Startup 417

Startup Dilution San Diego Stock Options 417

Startup Professionals Musings

DECEMBER 27, 2014

Venture capitalists (VCs) have long been seen as the top of the pyramid for startup funding sources, but in fact angel investors now fund over 60 times as many companies, according the Center for Venture Research. The cost of entry for tech startups continues to go down. Super Angels have greater scope to match talent with a startup.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

Startup Professionals Musings

JULY 5, 2011

They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. companies made the IPO transition in 2009, out of thousands of startups. Only about a dozen U.S.

Exit Strategy 235

Exit Strategy IPO Investment Bankers Entrepreneur 235

Both Sides of the Table

OCTOBER 12, 2014

And because they are so much larger by the time they go public (think: Facebook $104 billion, Twitter $18 billion, Alibaba > $200 billion) the private value of the most successful companies pre-IPO is more more valuable than it ever was. Fundraising / Negotiations Startup Lessons VC Industry' Aren’t they getting screwed?

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Steve Blank

APRIL 10, 2019

VC’s have just changed the ~50-year old social contract with startup employees. In doing so they may have removed one of the key incentives that made startups different from working in a large company. For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

This is going to be BIG.

NOVEMBER 28, 2021

In fact, it’s why many startup folks leave the early stage world to go over to the big company side—because the benefits tend to be much better. A lot of smaller startups are complaining that it’s super difficult to recruit talent right now, but few are differentiating their offering.

Hiring 179

Hiring Early Stage Marketing Term Sheet 179

Feld Thoughts

MARCH 24, 2017

Foundry Group is best known for our investments in startups, but our vehicle currently investing in other venture funds, Foundry Group Next, is off to what we believe to be a great start and I wanted to share an update about it by talking about our new investment in a fund managed by Founder Collective.

Founder 75

Founder LP Technical Review Seed Stage 75

Startup Professionals Musings

JULY 19, 2013

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. The downside is loss of control and financial dilution. Otherwise exit and startup with another idea. Marty Zwilling.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

ReadWriteStart

JULY 18, 2011

Clavier spoke last week at the International Startup Festival in Montreal on the topic of raising money - with a special emphasis on the numbers that a startup should keep an eye on. Clavier began his presentation at the beginning of a company's lifecycle, asking how many co-founders a startup ought to have.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

Both Sides of the Table

SEPTEMBER 10, 2021

In 2001 companies IPO’d very quickly if they were working, by 2011 IPOs had slowed down to the point that in 2013 Aileen Lee of Cowboy Ventures astutely called billion-dollar outcomes “unicorns.” Today you have funders focused exclusively on “Day 0” startups or ones that aren’t even created yet. The legends of Silicon Valley?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Next, they carefully consider the range of multiples being used today to value companies being acquired or doing IPOs in the market that the business is in. By Tim Keane, Angel Investor, Golden Angels Investors, LLC. « Power of Angel Investing in Milwaukee | Main. here of 7.65 [2].

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Version One Ventures

FEBRUARY 6, 2019

Over the past year, some of the most interesting and intellectually-stimulating pitches we heard have come from startups in biotech, specifically companies developing therapeutics. This aggressive ownership target is one reason more and more founders are looking for capital from IT/tech VCs who don’t demand as much equity.

Dilution 132

Dilution Artificial Inteligence IPO Valuation 132

Startup Professionals Musings

DECEMBER 14, 2014

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. The downside is loss of control and financial dilution. Otherwise exit and startup with another idea.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Startup Lessons Learned

JULY 5, 2010

I have personally sold many copies of his book, and continue to recommend it as one of the most important books a startup founder can read. Brant and Patrick undertook a difficult challenge: to provide a generally accessible introduction to Customer Development, without diluting its impact or dumbing-down its principles.

Customer Development 166

Customer Development Developer San Francisco Customer 166

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Low; a surprising number of Series A/B startups are missing basic financial reporting mechanisms. of startups raise VC.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

AUGUST 19, 2017

Most entrepreneurs struggle with many startup founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. The downside is loss of control and financial dilution. Otherwise exit and startup with another idea.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Haystack

JULY 8, 2018

And with this, every year, a new cohort enters into the “tech startup” world, and there’s no official canon to read, no “one-stop shopping” site or user manual to get briefed on the things you absolutely need to know. You can read more about the types of stock granted in startups here.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Hunter Walker

DECEMBER 18, 2015

Bloomberg’s article about lower-than-expected financial gains from startup IPOs for midlevel employees stuck in craw this week because there’s a handful of complex issues at play here. You join at an executive level pre-IPO for a company that already has huge potential. Post IPO, You Have Choices: Hold or Sell.

Equity 48

Equity Employee IPO Vesting 48

Both Sides of the Table

SEPTEMBER 18, 2014

And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? Maybe an IPO – who knows? Startup Lessons' But people seem pretty focused on that number. Raising lower seems kind of like something is wrong. A down round? Employment.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Austin Startup

MARCH 7, 2021

Austin, Dallas, Houston, San Antonio form a massive startup Megalopolis that is attracting top talent, impact-focused investors, and the most innovative companies in the world. Startups and investors should treat Texas like one big city. These are all potential customers and strategic partners for startups.

Texas 90

Texas San Antonio Houston Dallas 90

ithacaVC

FEBRUARY 1, 2018

It is highly typical for a startup to have small investors on its cap table. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. In this situation, the FFAs are diluted from an ownership percentage, but enhanced economically.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

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. Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

Austin Startup

NOVEMBER 25, 2018

As I mentioned at the beginning of this series/ebook, over the years I’ve noticed that I tend to frequently share certain Lucky7 posts with entrepreneurs we’ve backed , team members at data.world, or other startup investors I know. I failed to do that with Coremetrics and I paid dearly for it with dilution.

Bootstrapping 48

Bootstrapping Austin Equity Cofounder 48

Startup Lessons Learned

OCTOBER 26, 2009

Every time you listen to customers, you fear diluting your vision. Every time you listen to customers, you fear diluting your vision. ► August (2) SXSW Case Study: SlideShare goes freemium ► July (4) Case Study: kaChing, Anatomy of a Pivot Some IPO speculation Founder personalities and the “first-class man&# th.

Advisory Board 151

Advisory Board Customer San Francisco Lean 151

The Next Web

OCTOBER 7, 2013

That’s what a couple of my friends – engineers at Google and Bloomberg who have been following the rise of startup culture with intrigue – told me recently. Startup employees are granted common shares out of something called an option pool. Every time a startup raises capital, all common shareholders are diluted.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Agile VC

MAY 9, 2014

Some context… like many startups, the founders of Alibaba still own substantial stakes in the company and believe it’s in the company’s best interests for them to retain an outsized influence in the company’s governance longer term. Companies like Ford and the New York Times Co.

Government 153

Government Silicon Valley China Cofounder 153

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” I have moved my startup practice to Cooley from Dorsey. About Matt.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40