Feld Thoughts

APRIL 21, 2016

Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness? Those are my thoughts on less than a third of Bill’s post.

Marketing 70

Marketing Down Round Startup IRR 70

VC Cafe

FEBRUARY 27, 2024

Carta reports that 20% of the rounds in 2023 were down rounds, but I believe the actual number is much higher. For that and other reasons (like cash preservation) VCs moved to focus more on earlier stage, and many funds that typically invest in A started deploying more into seed rounds.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

The Equity Kicker

JANUARY 25, 2016

However severe our current situation is, I’m sure there will be plenty of short term negatives, including more job losses, company failures and down rounds. We need a new disruptive capitalism that is designed for a much more mature internet market, one that can bring founders, investors, and employees together.

Venture Capital 60

Venture Capital Angel Investor Startup Participating Preferred 60

Gust

SEPTEMBER 17, 2014

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? Less than you’ll probably grant your most junior employees in stock options? A down round? Him: Not so good. Obviously he’d be pissed off. Me: I know. Last year ….

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Ben's Blog

JULY 16, 2013

First, if you did not understand how radically the fundraising environment might change, then there is no chance that your employees would have understood it. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

Both Sides of the Table

FEBRUARY 8, 2016

Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive. Employees hate them because it’s hard to reset expectations that their stock is worth less. Optimize for a W more than % dilution in these circumstances. Insiders hate them and fight them.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

VC Cafe

SEPTEMBER 26, 2022

A combination of competition for top talent and an effort to bring employees back to the office drove startups in Israel to throw extravagant parties and all-inclusive retreats abroad. The press took notice, especially since just a few months later startups were laying off employees en-masse to cut costs. Team, product, market.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Scalable Startup

JANUARY 27, 2011

If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding. Are we becoming passé? Time for a new CEO? And all those other depressing clichés. Many early stage founders aren’t sure how to handle this requirement for success.

Revenue 22

Revenue Early Stage Down Round Software Review 22

Berkonomics

OCTOBER 7, 2011

For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. And it is that disconnected employee, usually one or more of the better performers, that starts looking for a job when times look bad for a company.

Valuation 54

Valuation Dilution Down Round Employee 54

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This answer. Please specify the necessary improvements.

Equity 40

Equity Employee Founder Cofounder 40

VC Cafe

JUNE 10, 2022

new unicorns created each day), startups may find themselves raising down rounds as they struggle to justify previous valuations. However, employees have been notified that Meta no longer plans to commercially release the AR glasses due to efforts to cut back on heavy investments in its Reality Labs and AR/VR division.

Valuation 151

Valuation Marketing Venture Capital 151

thebarefootvc

AUGUST 26, 2015

The third requirement to be a successful VC is finding resilient teams that are building companies and product that can stand up to external shocks such as recessions (in addition to “internal” shocks such as employee turnover, product delays, etc). Build solid relationships with strategic partners and customers.

Marketing 40

Marketing Investment Bankers Valuation China 40

thebarefootvc

AUGUST 26, 2015

The third requirement to be a successful VC is finding resilient teams that are building companies and product that can stand up to external shocks such as recessions (in addition to “internal” shocks such as employee turnover, product delays, etc). Build solid relationships with strategic partners and customers.

Marketing 40

Marketing Investment Bankers Valuation China 40

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

thebarefootvc

JULY 26, 2015

The third requirement to be a successful VC is finding resilient teams that are building companies and product that can stand up to external shocks such as recessions (in addition to “internal” shocks such as employee turnover, product delays, etc). Build solid relationships with strategic partners and customers.

Marketing 40

Marketing Investment Bankers Valuation China 40

www.mattbartus.com

DECEMBER 9, 2012

Interesting strategy, although I don't know if it justifies the added risk of having a flat (or down) round next time you go to raise. Interesting strategy, although I don't know if it justifies the added risk of having a flat (or down) round next time you go to raise. Employees, Advisors & Consultants (12).

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Genuine VC

FEBRUARY 9, 2011

Evaluating a startup as a prospective employee is tough, especially when you compare to VCs. When there are unique and strong external & internal tailwinds which can push a startup forward, there is more opportunity and overall upside for all employees. So what is a prospective employee to do?

Startup 146

Startup Burn Rate Technical Review Down Round 146

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. Their own ego is also a factor – will a down round signal weakness?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

Social networking finally came of age connected the planet and leading to enormous wealth creation for Facebook employees and investors. Smart phones finally took off leading to enormous wealth creation for Apple employees and investors but also helped propel Google, Facebook, Twitter, Instagram, Snapchat, WhatsApp and others.

Valuation 150

Valuation Down Round Startup Later Stage 150

Reid Hoffman

JUNE 8, 2021

And then how would you prompt other entrepreneurial leaders to think more broadly about stakeholders than even just investors, employees, customers, which tends to be the typical trifecta? We identified five, and the trifecta of employees, shareholders and customers, everyone has those, we also added two more. BC: Exactly, Reid.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

crowdSPRING Blog

FEBRUARY 21, 2014

The Right Way to Grant Equity to Your Employees - crowdspring.co/1bCrvce. The Right Way to Grant Equity to Your Employees – crowdspring.co/1bCrvce. How You Get Slaughtered in a Down Round: When Taking Venture Capital Doesn’t Go as Planned – crowdspring.co/MvF29W. ” - crowdspring.co/1fjSpog.

Social Media 92

Social Media Small Business Design Media 92

VC Cafe

NOVEMBER 30, 2022

On a high level, the report found that “ of the more than 300 VC-backed unicorns in the region, 203 have fuelled more than 1,000 (1,018) new tech-enabled startups, with former employees becoming founders “ In terms of hubs, UK and Israel have produced the highest numbers of unicorns outside of US and China.

Europe 97

Europe Balance Sheet Valuation 97

www.paulgraham.com

APRIL 28, 2010

The reason is that employees are investors too—oftheir time—and they want just as much to be able to cash out. Ifyour competitors offer employees stock options that might make themrich, while you make it clear you plan to stay private, yourcompetitors will get the best people. How much stock do you give early employees?

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Altgate

MARCH 8, 2009

Growth stage investors are usually the Series B or C investors who come in when the product is in the market but there is little or no revenue and the team is probably in the 20-something range with the goal to ramp it up to 40-50 employees with the new money, build out a sales team, etc. “Series B&# funds.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

Reid Hoffman

JUNE 8, 2021

And then how would you prompt other entrepreneurial leaders to think more broadly about stakeholders than even just investors, employees, customers, which tends to be the typical trifecta? We identified five, and the trifecta of employees, shareholders and customers, everyone has those, we also added two more. BC: Exactly, Reid.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Scalable Startup

FEBRUARY 1, 2013

Then from a bottoms-up standpoint what you said is exactly right, I think, which is that the new generation of employees grew up on smartphones and tablets and touch and everything, social networking and Twitter and everything else. And increasingly they might not buy their laptops, because their employees will just bring their own devices.

Software Review 22

Software Review Startup Venture Capital Stock 22

Bryce Dot VC

APRIL 21, 2016

In Bill’s world, ALL involved in the Unicorn market include Founders, Employees, Investors, LPs, even Sovereign Wealth Funds. If you read this post your takeaway might be that founders egos are crushed, employees options are worthless and Investors have very difficult conversations with their LPs. That about covers it, right?

Silicon Valley 40

Silicon Valley Dilution Term Sheet Down Round 40

A Crowded Space

MAY 31, 2016

We expect there to be an increase in down rounds, flat rounds, inside rounds and various pay-to-play scenarios. The company lives through the cycle, all investors increase their ownership a bit, founders and early employees take some more dilution. This is extremely well summarized in Bill’s Road to Recap post.

Cram Down 60

Cram Down Pay to Play Angel Investor Warrant 60