Agile VC

JULY 11, 2012

While ownership and control of the management company matters , these stakes are rarely monetizable at least in the VC business (unlike the buyout world where huge firms like Blackstone, KKR, and Apollo have IPO’d to the great financial benefit of the founders). To a lesser extent the desire for greater industry prestige is a factor.

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

Rob Go

JANUARY 17, 2017

In the last three investments I’ve made, there has either been a lifecycle VC involved or one was interested but didn’t end up being part of the syndicate. Although seed investing has become increasingly the domain of specialized seed funds, large lifecycle VC’s continue to participate as well.

Due Diligence 28

Due Diligence Seed Stage Syndicate Syndication 28

Professor VC

JANUARY 17, 2008

One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. My facebook can beat up your facebook.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Both Sides of the Table

FEBRUARY 25, 2010

We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. We ended up agreeing a term sheet for $16.5 million at a $15 million pre-money valuation.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Professor VC

JUNE 20, 2011

And this is a company that has managed to get an A+ list of investors and is executing very well. We managed to pull together an angel syndicate and close $450K on 9/30 after working the phones the last few days and anxiously waiting for signature pages to show up on the fax machine and wire confirms to hit the bank account.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

David Teten

JULY 11, 2019

So when a company in which I’m an investor is raising a later round, should we (the VC investor) keep our pro rata or get diluted? . In practice, sometimes we cannot exercise these rights, as company management may ask us to make room for certain desired new investors. You have to know when to hold them and know when to fold them.

Syndicate 60

Syndicate Syndication Institutional Investors Dilution 60

www.paulgraham.com

APRIL 28, 2010

And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Some angel investors join together in syndicates. Whatkind of anti-dilution protection do they want? At Viaweb we managed to raise $2.5 Apparently our situation was not unusual.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The founders usually get wiped out completely, but existing management usually ends up with new options for between 10% and 20% of the company.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

www.paulgraham.com

APRIL 28, 2010

Mechanics Angel investors often syndicate deals, which means they join togetherto invest on the same terms. In a syndicate there is usually a"lead" investor who negotiates the terms with the startup. Dont feel like you have to join a syndicate, though. Dilution is normal. So its your choicewhether you get diluted. [

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Austin Startup

AUGUST 1, 2017

Large funds write larger checks because they lack the mental/resource bandwidth to actively manage a portfolio of smaller investments. By driving the valuation up, you’re usually not reducing your dilution in the round; you’re just increasing the size of the check they need to write in order to get to their desired %.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48