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 term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless.

Recapitalization 70

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

www.paulgraham.com

APRIL 28, 2010

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value. Better how?

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

View from Seed

JANUARY 26, 2016

This means that it has rewarded Series A and B investors for chasing momentum and made it less important for these investors to focus on valuation or sound, early unit economics. Third, founders at this stage have an incentive to minimize dilution at the point when their equity is the least valuable.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Rob Go

SEPTEMBER 2, 2014

I’ve seen a few cases now where a number of very high-quality institutional investors were interested in investing in a company at valuation, but a non-institutional investor was willing to set terms 1.5 – 2X higher than that valuation. The institutions walked, but the round got done. Alternative funding sources.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

Rob Go

AUGUST 26, 2013

What I am finding interesting is watching the way valuations and difficulty of raising has changed for these different flavors of seed rounds. This led to a period of seed stage exuberance, and that led to higher valuations, larger rounds, etc. The risks were not commensurate with the valuation relative to institutional seed rounds.

Valuation 68

Valuation Seed Stage Syndicate Syndication 68

View from Seed

JUNE 30, 2015

You may actually need to raise a few financing rounds just to get to a series A, so think about the syndicate you are constructing (will they be loyal to you?),

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

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. The valuation determines how much stock you get. Dilution is normal.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Austin Startup

AUGUST 1, 2017

This is most clearly highlighted in the “unicorn” boom we all saw over the past few years, where founders raised very large rounds, with terms very onerous to the underlying common stock, hoping they could eventually justify billion dollar valuations to skeptical acquirers or public market investors. Angels/Seed Funds v.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

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. Another comment which probably deserves more discussion is around valuation. He also said they typically only invest at a $1 million pre-money valuation or less. My facebook can beat up your facebook.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

View from Seed

JANUARY 28, 2016

This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution. As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases.

Cofounder 120

Cofounder Finance Founder Syndicate 120

Professor VC

JULY 25, 2013

Another area where I''m not sure I stand is with some of the more formal referral and syndication programs that are emerging now. AngelList (which I remain a big fan) also recently launched a syndicate program. In this program, an angel can ask the entrepreneur for an allocation of the round and then syndicate through AngelList.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Both Sides of the Table

APRIL 3, 2010

Third, he notes that even if they do invest they’re likely to do so at a lower price because you can’t truly get an independent valuation. They said that they didn’t want the extra money or dilution. In my third seed deal we co-invested with a seed fund and then syndicated the rest to strategic angels.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Rob Go

JANUARY 28, 2016

This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution. As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases.

Cofounder 28

Cofounder Finance Founder Syndicate 28

Professor VC

JUNE 20, 2011

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. offering to invest $75K if we could find another $250K by September 30, 2005.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28