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Cram Down – A Test of Character for VCs and Founders

Steve Blank

Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. A cram down is different than a down round.

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How’s Venture Capital Changing in 2023

VC Cafe

Taking stock of the venture capital market in 2023, it’s clear to see that we’re in a transition point. Prices went up from round to round, and startups were encouraged to grow, grow, grow, and not to worry about profitability. In today’s market, I believe small is beautiful, and that specialisation matters.

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Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. I have two simple rules for founders in my head from this experience. Then use the down round to clean up your preference overhang.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

I’ve decided to take all of my private conversations and subjective points-of-view on the topic and make them public in a keynote speech at the Founder Showcase in San Francisco on June 15th. The price of public stocks change instantly in reaction to news that is perceived to affect the future value of that company.

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Venture Capital Q&A Session

Both Sides of the Table

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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In Q4 2022, founders face tough choices

VC Cafe

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.

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Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

The shares given out can either be common stocks or preferred stocks. ? Debt investment. I have interacted with a lot of founders who funded their initial business expenses through credit cards. Point number 1: You must understand that funding is a business transaction between the investors and the startup founders.

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