Berkonomics
OCTOBER 5, 2023
Time and fixed overhead: [Email readers, continue here…] That relationship between fixed overhead and production time is as critical as any other factor in the success of a young company. And professional investors often penalize the company with lower-priced down rounds or expensive loans as a result.
Both Sides of the Table
JULY 29, 2010
The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.
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Berkonomics
AUGUST 10, 2017
Email readers, continue here…] In the technology sector where I most often play, extended unplanned software development cycles account for the majority of these corporate failures. It is not a strong bargaining position for the CEO to ask for money to complete a product promised for completion with the previous round of funding.
ReadWriteStart
JUNE 1, 2020
One can also proactively reach out to investors by sending them emails with the teaser document and follow up for a meeting. But, in subsequent rounds of funding inflated valuation will be normalized resulting in a down round. You might have seen that valuations of several unicorns were suddenly slashed down.
Both Sides of the Table
MAY 30, 2018
Of course valuation is in the eye of the beholder but if that VC thinks your last round valuation was way too high then he or she is more likely to politely pass rather than try and talk down your valuation now. VCs hate “down rounds” and many don’t even like “flat rounds.” There are some simple reasons.
Berkonomics
OCTOBER 18, 2018
For investors, a subsequent down round at a lower valuation than the last, or an exit opportunity at a loss are all opportunities for the affected stakeholder to show a side that can sometimes shock an entrepreneur or CEO. Investor loyalty is most tenuous of all.
crowdSPRING Blog
MAY 10, 2013
The Damaging Psychology of Down Rounds | by Mark Suster – [link]. How MailChimp learned to treat data like orange juice and rethink email in the process – [link]. “Embrace skeptics. They can make your business better. Toss out cynics, because they don’t further your cause.” ” [link].
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