ReadWriteStart

JUNE 1, 2020

The next reason is to establish a competitive advantage over your competition and quickly acquire a substantial market share. Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. Establish a competitive advantage. Both of which are expensive and time-consuming.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Steve Blank

APRIL 26, 2022

Cram downs are back – and I’m keeping a list. At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. A cram down is different than a down round. This article previously appeared in TechCrunch. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Professionals Musings

AUGUST 6, 2023

Lack of checks and balances on startup valuations. A startup that is listed on a crowdfunding platform gets no formal pushback or negotiation on its declared valuation. Unreasonably high early valuations hurt the entrepreneurs, as well as professional investors, later when a second round becomes a down round or can’t be negotiated.

Angel Groups 201

Angel Groups Accredited Investor Due Diligence Equity 201

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Startup Professionals Musings

NOVEMBER 25, 2020

Lack of checks and balances on startup valuations. A startup that is listed on a crowdfunding platform gets no formal pushback or negotiation on its declared valuation. Unreasonably high early valuations hurt the entrepreneurs, as well as professional investors, later when a second round becomes a down round or can’t be negotiated.

Equity 411

Equity Angel Groups Accredited Investor Due Diligence 411

Both Sides of the Table

JUNE 22, 2011

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. I believe a bubble occurs when a market is willing to pay greater than intrinsic value for an asset class. I spoke about a lot of things during the keynote.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Feld Thoughts

FEBRUARY 9, 2016

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. But, as you raise more money at higher valuations, this will normalize. Then use the down round to clean up your preference overhang.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Berkonomics

MARCH 5, 2020

So, it is important for the entrepreneur to identify, address and mitigate each of these in order to increase valuation and decrease the risk of ultimate loss of the business. Second: Market risk. . Are you ahead or behind the market with your product or service? First: Product risk. . compete in the marketplace?

Valuation 62

Valuation Down Round Early Stage Demand 62

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 205

Finance Silicon Valley Valuation Startup 205

ithacaVC

NOVEMBER 14, 2014

I have written about startup valuations previously. 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]. Market size.

Valuation 69

Valuation Startup Down Round Early Stage 69

VC Cafe

MAY 29, 2022

According to the State of Private Markets report by Carta it’s clear to see that the biggest impact of the current downturn is on the growth stages (post series A) and that seed remains stable (for now). Carta’s State of Private Markets Q1 2022. The bull market is over. ‘doom and gloom’ headlines.

Venture Capital 183

Venture Capital Early Stage Valuation Startup 183

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. Valuations. Restructures, Down Rounds, and Pay to Plays. Soft Acquisition Market.

Portfolio 99

Portfolio Cap Table LP Valuation 99

Lightspeed Venture Partners

OCTOBER 7, 2012

This isn’t a company yet, it’s an idea, and the founder could do a lot more on his own to validate product-market fit before raising capital. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. They were right to do so. The last company was a bit of a puzzler.

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. People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Ben's Blog

JULY 16, 2013

You probably thought that valuations would be roughly the same as they were the last time you raised money. 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).

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

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. 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.

Marketing 70

Marketing Down Round Startup IRR 70

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. They point to some widely known facts: financings & valuations are up massively over the past 7 years and non-VC money has entered the system. How do I know?

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Berkonomics

MARCH 15, 2012

So it is important for the entrepreneur to identify, address and mitigate each of these in order to increase valuation and decrease the risk of ultimate loss of the business. Second: Market risk. Are you ahead or behind the market with your product or service? First: Product risk. And fifth: Competitive risk.

Valuation 80

Valuation Down Round Demand Management 80

VC Cafe

FEBRUARY 27, 2024

Seed is about showing initial product market fit. Below are just a few contributors to the rise of pre-seed in the current market: Explosion of Micro funds – In recent years, there’s been a steep increase in the number of micro funds, which are generally below $100M in size.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

VC Cafe

OCTOBER 31, 2022

This is largely due to several major stock market crashes and global economic uncertainties. 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. It’s an investors market. Funding crunch intensified in Q3 2022.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

Startup Professionals Musings

MAY 20, 2016

Lack of checks and balances on startup valuations. A startup that is listed on a crowdfunding platform gets no formal pushback or negotiation on its declared valuation. Unreasonably high early valuations hurt the entrepreneurs, as well as professional investors, later when a second round becomes a down round or can’t be negotiated.

Angel Groups 136

Angel Groups Accredited Investor Equity Due Diligence 136

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. The market correction has come for Series A and seed startups (Source: Pitchbook ). Lemkin #????????????

Valuation 151

Valuation Marketing Venture Capital 151

thebarefootvc

AUGUST 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. As a former investment banker who followed the markets closely once upon a time (especially when I was in the midst of public market M&A transactions), I now have the luxury of watching from an arm’s length.

Marketing 40

Marketing Investment Bankers Valuation China 40

thebarefootvc

AUGUST 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. As a former investment banker who followed the markets closely once upon a time (especially when I was in the midst of public market M&A transactions), I now have the luxury of watching from an arm’s length.

Marketing 40

Marketing Investment Bankers Valuation China 40

thebarefootvc

JULY 26, 2015

After a tumultuous week in global markets, today the US stock market ended higher on the session. As a former investment banker who followed the markets closely once upon a time (especially when I was in the midst of public market M&A transactions), I now have the luxury of watching from an arm’s length.

Marketing 40

Marketing Investment Bankers Valuation China 40

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. People seem concerned about valuation. A down round?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Ben's Blog

JULY 16, 2013

You probably thought that valuations would be roughly the same as they were the last time you raised money. 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).

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

The Equity Kicker

NOVEMBER 20, 2015

Match closed up 23% at a valuation of $3.5bn and Square was up 45% at a valuation of $4.2bn. However in the run up to its IPO Square had indicated it would go out at between $11 and $13 per share, and then ended up at $9, and in October last year Square raised $150m at a $6bn valuation.

IPO 60

IPO Matching Ratchet Valuation 60

ithacaVC

FEBRUARY 1, 2018

If FFAs only invest at the beginning and do not make any follow on investments as the company raises more $$ then the only real way FFAs make money when the company is ultimately sold is if the company keeps raising future rounds at higher and higher valuations (and IPO exit may provide upside if the stock price increases over time after the IPO).

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Berkonomics

MARCH 14, 2019

Of course, we are speaking of increased valuation of your company when we speak of “wealth.” So, it is important for you to identify, address and mitigate each of these in order to increase valuation and decrease the risk of ultimate loss of the business. Second: Market risk. . So, let’s examine them and mitigate them.

Valuation 48

Valuation Down Round Early Stage Demand 48

ithacaVC

FEBRUARY 23, 2012

It is the time of year when VC firms do year end valuations for their portfolio company holdings. FAS 157 and other accounting rules require such a valuations be done, but what is the real value of doing them? Some VC firms use the art of Level 3 inputs to mark up their valuations, which has a tendency to make limited partners happy.

Valuation 49

Valuation Institutional Investors Marketing Down Round 49

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. than comparable companies in the same sector that raised at a higher valuation.

Venture Capital 60

Venture Capital Valuation Stock NDA 60

The Equity Kicker

JANUARY 22, 2014

Investors pay a high valuation to get into a good deal, betting on continued fast growth. You rush a few key hires, overbuild the team, ramp marketing spend. You fall into the spiral of death: head of sales gets replaced (at least once), CEO gets replaced (at least once), a down-round financing happens (if lucky).

Venture Capital 102

Venture Capital Down Round Valuation Lean 102

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Don’t assume that you can “just do a down round” if necessary.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

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. The best startups capture all the returns so focusing too much on entry valuation is a mistake.

Venture Capital 60

Venture Capital Angel Investor Startup Participating Preferred 60

VC Cafe

SEPTEMBER 26, 2022

Before product-market fit… just care about speed of iteration according to your customer feedback. ValuatIon should be a function of value, not ego. Kawasaki’s Law of Pre-Money Valuation: for every full-time engineer, add $500,000; for every full-time M.B.A., Team, product, market. Our goals, their goals. 9M Seed: $20M ?

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

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.

Dilution 60

Dilution Portfolio China Down Round 60