Berkonomics

MARCH 5, 2020

So, it is important for the entrepreneur to identify, address and mitigate each of these in order to increase valuation and decrease the risk of ultimate loss of the business. Reduction or elimination of one or more of these risks increases the valuation of the company and certainly improves its chances of survival and growth.

Valuation 62

Valuation Down Round Early Stage Demand 62

VC Cafe

NOVEMBER 30, 2022

According to Pitchbook’s Q3 2022 European VC Valuations Report , Europe minted 40 unicorns in the first 3 quarters of 2022. Atomico’s founder Nicklas Zennstrom recently called the end of the high valuations era and urged founders and VCs to remove the stigma from down rounds.

Europe 97

Europe Balance Sheet Valuation 97

ithacaVC

NOVEMBER 14, 2014

I have written about startup valuations previously. If you are advising startup founders, I strongly suggest having them read all 4 of the posts to get the lay of the startup valuation land. A founder is about to raise their first round and asking me how to value their company. [1]. Here is a post from October 2012.

Valuation 69

Valuation Startup Down Round Early Stage 69

YoungUpstarts

JUNE 26, 2020

To do that you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation. Many entrepreneurs waste time talking to investors who are at the wrong stage, sector or tribe. Myth #3: Take the Highest Valuation You Can Get. Valuation is a touchy subject for most entrepreneurs.

Finance 205

Finance Silicon Valley Valuation Startup 205

Berkonomics

AUGUST 3, 2023

My experience with early valuations by founders for friends… I’ve arrived at a significant number of companies that were looking for additional growth capital after a “friends and family” round and had to “clean up” the cap table more than a few times over the years.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? A down round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Gust

SEPTEMBER 17, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? A down round?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

OCTOBER 18, 2015

“Trade in an asset at a price that strongly deviates from an asset’s intrinsic value” The arguments against that, “This time the startups have real revenues!” Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation. 25% “down rounds?

IPO 150

IPO Venture Capital LP SEC 150

NZ Entrepreneur

JULY 8, 2019

In the first of a three part series on early stage business investment, we asked serial entrepreneur and investor Josh Comrie what three key things New Zealand entrepreneurs must get better at when it comes to seeking angel investment. So, I went deep (currently sitting at 26 different early-stage ventures). Valuations.

New Zealand 43

New Zealand Entrepreneur Valuation Dilution 43

Berkonomics

JUNE 8, 2017

It is most common to greatly overprice such a round of financing, valuing the enterprise well above what it may be worth at the moment for friends or related investors who do not have the sophistication or willingness to challenge the valuation. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

View from Seed

FEBRUARY 19, 2015

Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. It’s nice to get great valuations and hire A-players. Sometimes the only path forward is to fill a gap with a down round of funding, a B-player, or some other non-ideal option.

Founder 120

Founder Startup Cofounder Business Model 120

Hippoland

NOVEMBER 13, 2016

But as we’ve seen, these valuations can be hocus-pocus — even at later stage rounds, we’ve seen lots of companies of late fall from grace and become massively devalued overnight when they cannot raise their next round at a higher valuation. If a company raises a good round, it gets marked up to the new value.

IRR 48

IRR Valuation Portfolio Due Diligence 48

This is going to be BIG.

SEPTEMBER 7, 2012

In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive. That wasn't a bubble bursting issue--that was a poor financing strategy issue of people getting caught with their pants down, hands in the cookie jar, and all the metaphors you can think of at once.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. 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.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Tim Keane

AUGUST 20, 2009

  So to the extent that he sees that the quality of the investor and his/her connections and abilities is really what the early stage company is buying, the more Jason and I would agree.   New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur. 

Milwaukee 60

Milwaukee Bootstrapping Cram Down Deal Structure 60

Altgate

MARCH 8, 2009

There are three types of venture investing (early stage, “growth&# stage and later stage. Early stage means the first real investors in a startup when the team could be as small as 5-10 people. So in the current collapse, the later stage investors will fare the best, or should I say least worst.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

Scalable Startup

OCTOBER 26, 2011

It’s no longer based on a hunch, unless the company is in trouble and needs money to finish what the first round started. This problem often leads to a lowered valuation or “down round” Not a great scenario.) If the company is doing well, the second round is easier to acquire.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22