VC Cafe

OCTOBER 31, 2022

This is largely due to several major stock market crashes and global economic uncertainties. It’s a tough time for a lot of startup founders right now. Many companies are now having to resort to tough measures in order to stay afloat, including layoffs, down rounds and tough terms from current investors.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

Both Sides of the Table

JUNE 5, 2011

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I can’t control the market. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

SEPTEMBER 28, 2014

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. We’re going to start aggressively spend money on marketing our product. We want a strong balance sheet (um, ok.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

crowdSPRING Blog

MAY 10, 2013

These posts and videos are about logo design , web design , startups, entrepreneurship, small business, leadership, social media, marketing, and more! Startup Founders: Don’t Forget to Sell the Dream | by Jason Shen – [link]. The Damaging Psychology of Down Rounds | by Mark Suster – [link]. ” [link].

Social Media 93

Social Media Small Business Design Media 93

Both Sides of the Table

JUNE 22, 2011

I recently spoke at the Founder Showcase at the request of Adeo Ressi. They have seen one side of a market where many of us have seen the ebb and flow multiple times. Still, market amnesia by ordinarily rational actors always surprises me. That asset class need not represent the broader market.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Berkonomics

AUGUST 10, 2017

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. There is an art to efficient management of a process, whether that is the process of bringing a product to market from R&D to production or developing a new product’s launch program.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

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. Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

VC Cafe

MAY 29, 2022

Sequoia’s “Adapting to Endure” Sequoia presented this deck to a group of portfolio founders and it quickly spread online to founders worldwide. Carta’s State of Private Markets Q1 2022. As a result, they are less susceptible to immediate changes in the market environment. The bull market is over.

Venture Capital 183

Venture Capital Early Stage Valuation Startup 183

Feld Thoughts

APRIL 21, 2016

Bill Gurley wrote an incredible post yesterday titled On the Road to Recap: Why the unicorn financing market just became dangerous … for all involved. “Many Unicorn founders and CEOs have never experienced a difficult fundraising environment — they have only known success. It’s long but worth reading every word slowly.

Marketing 70

Marketing Down Round Startup IRR 70

Both Sides of the Table

MAY 30, 2018

VC firms see thousands of deals and have a refined sense of how the market is valuing deals because they get price signals across all of these deals. What was the post money on your last round (and how much capital have you raised)? VCs hate “down rounds” and many don’t even like “flat rounds.”

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

VC Cafe

SEPTEMBER 26, 2022

The past year was a wild ride for startups and founders, giving a whole new meaning to the ”rollercoaster” aspect of being an entrepreneur. Embrace a frugal mindset: cashflow is king. “Before product-market fit… just care about speed of iteration according to your customer feedback. Bill Gates , founder of Microsoft.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). Because markets are not logical; markets are emotional. Yes, we did a down round.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

View from Seed

FEBRUARY 19, 2015

This is a guest post from Rob May , a co-founder and CEO of Backupify , which raised $19.5M In 2010, we were recruiting for a Senior Vice President of Sales and Marketing for Backupify, and it was clear that many of the people I was interviewing wanted the CEO role. Hang out with other founders and CEOs. Keep at it.

Founder 120

Founder Startup Cofounder Business Model 120

Hunter Walker

AUGUST 8, 2023

At the time, this is last quarter and the stock market has trended upwards nicely since then (a potential leading indicator of private tech valuations), we all agreed venture portfolios were probably still 25-40% overvalued. Restructures, Down Rounds, and Pay to Plays. Soft Acquisition Market.

Portfolio 98

Portfolio Cap Table LP Valuation 98

Lightspeed Venture Partners

OCTOBER 7, 2012

The founders were very sympathetic; a man, laid off from his job, and his very pregnant wife, who sold their house and investing $150k into the business and are working hard to make a go of it. The two founders invested $40k in the business, and plan to license it rather than manufacture it because manufacturing seems too hard.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

SEPTEMBER 18, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. A down round? Cashflow projections?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

VC Cafe

FEBRUARY 27, 2024

A founder asked me what makes a $2M round “pre-seed”? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? What’s the difference between an angel round and pre-seed round and why do I believe we’ll see more pre-seed rounds taking place in 2024?

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Berkonomics

MARCH 30, 2010

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. There is an art to efficient management of a process, whether that is the process of bringing a product to market from R&D to production or developing a new product’s launch program.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

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. Like Mark Zuckerberg, who built a site only for college students, we are looking for a small, protected market that you as an entrepreneur, can dominate. Why does it need to be a small market?

Finance 180

Finance Silicon Valley Valuation Startup 180

NZ Entrepreneur

SEPTEMBER 16, 2020

The statistics show that even though most founders bet their time and resources that their startups will be the best in the world, 90% of those new startups won’t be in operation in 10-15 years. A much better analysis would be ‘if we do not secure this distribution agreement, the market share we can achieve by this date will be halved.’.

Startup 69

Startup Sales Cycle Down Round Revenue 69

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). Because markets are not logical; markets are emotional. Yes, we did a down round.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

Both Sides of the Table

FEBRUARY 4, 2016

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. But these data points are often lagging indicators and perhaps a better barometer of the future would be to gather data on VC perceptions in the market right now.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

VC Cafe

JUNE 10, 2022

The market correction has come for series A and seed startups. For the past few week I’ve been sharing here the impact of the current downturn that started in the public markets on startups and venture capital. But recently those round sizes and valuations have tumbled to about $10 million and $50 million, respectively, he said.

Valuation 151

Valuation Marketing Venture Capital 151

Both Sides of the Table

SEPTEMBER 27, 2010

We need venture debt, factoring companies and public markets. And people like Jeff Clavier, Aydin Senkut, Dave McClure, Chris Sacca & Eric Paley (at Founder Collective) are leading the charge. Chris Sacca talked about how a $20 million exit can change a founder’s life and that shouldn’t be scoffed at.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

ithacaVC

FEBRUARY 1, 2018

Founders often raise money from friends and family and other angels. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. And sometimes founders want to protect the financial interests of FFAs. Here is a quick guide.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Gust

SEPTEMBER 17, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. A down round? This is why Party Rounds in VC suck.”.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

The Equity Kicker

JANUARY 25, 2016

On Friday it seemed like everyone in the venture capital industry was again reading about market turmoil, this time the news is that angel investors are pulling back and valuations taking a hit. In the ecommerce and marketplace markets Forward Partners operates in growth is limited because business has to scale country by country.

Venture Capital 60

Venture Capital Angel Investor Startup Participating Preferred 60

ithacaVC

NOVEMBER 14, 2014

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]. A founder is about to raise their first round and asking me how to value their company. [1].

Valuation 69

Valuation Startup Down Round Early Stage 69

This is going to be BIG.

JANUARY 17, 2016

The public markets have been stumbling around lately, trying to figure out what China and oil prices mean for the rest of the world economy. Fear, not surprisingly, weighs markets down. They might have to get another round in, and that round will most certainly be a down round. They're just.

Dilution 60

Dilution Portfolio China Down Round 60

David Teten

AUGUST 7, 2019

To simplify, there are two classic approaches to public markets investing. The first is Momentum Investing , “a strategy to capitalize on the continuance of an existing market trend”, which usually meaning that the price has been rising in the recent past. As a venture capitalist, should you be a Momentum or a Value investor?

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Both Sides of the Table

FEBRUARY 8, 2016

And when prices are dropping on a VCs existing companies in market, there is a substantial reduction in FOMO (fear of missing out) for new deals, which means that investors take their time in making investment decisions. Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

Scalable Startup

JANUARY 27, 2011

The first trick is to offer something that the world will need more and more over the next few years (growing market), without that it doesn’t matter much anyway; your product/service/thing must “catch on”. This can be somewhat manipulated by your successful marketing execution (i.e. why one iPhone app succeeds vs. another).

Revenue 22

Revenue Early Stage Down Round Software Review 22

Growthink Blog

MAY 23, 2011

Technical progress and market traction are much slower and cost a lot more than anticipated. Usually unbeknownst to all, the decision around pursuing or accepting a venture capital round will be the most important factor in determining the investment return for the founder and the original angel investors in the company.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

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? They've got a handful of customers, maybe a few thousand users, and some initial traction.

Equity 40

Equity Employee Founder Cofounder 40

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Marketing demand creation programs (Search Engine Marketing, Public Relations, Advertising, Lead Generation, Trade Shows, etc.)

Lean 244

Lean Silicon Valley Startup RSS 244

VC Cafe

JANUARY 2, 2023

As growth investments (and valuations) go down, unicorns might struggle to survive, according to Globes. Israeli public tech companies saw market cap decline of 65% in 2022. The recent valuations analysis by Carta shows the valuation benchmarks across industry (note that the valuations are for the US market, so discretion is advised).

Valuation 158

Valuation Down Round Venture Capital 158

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. 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. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40