Both Sides of the Table

JUNE 5, 2011

Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit&# someday – either via selling your company to a larger company or via an IPO. Another firm we saw tried to raise $15 million at a $60 million pre-money with similar metrics. Here’s the problem.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

abovethecrowd.com

APRIL 20, 2016

The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate. In Q1 of 2016 there were zero VC-backed technology IPOs.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

SEPTEMBER 18, 2014

Him: But when I raised my first round we didn’t know how to price the company. There were no metrics. How will you price the next round? Your A round? Him: On metrics. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

SEPTEMBER 17, 2014

Him: But when I raised my first round we didn’t know how to price the company. There were no metrics. How will you price the next round? Your A round? Him: On metrics. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Reid Hoffman

JUNE 8, 2021

Airbnb was preparing for an IPO right when the pandemic hit, and everything changed in a matter of days. The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs. Obviously, the challenges of 2020 were next level.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

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

Growthink Blog

MAY 23, 2011

Yes, you heard me right – multiple research studies, including from the Kauffman Foundation , have shown that when you remove a follow-on venture capital round from a founder or angel investor-funded company, that expected returns skyrocket. It is driven by the following: • The Best Metric for the Health of a Company is Cash Flow.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112