Both Sides of the Table

JUNE 5, 2011

You’re unlikely to want to make this sort of investment with the product or the market not yet validated. As ever, prices still determined by: quality of team, quality of product / market and competitiveness of the deal. I should also point out that while they had built their products they had limited market traction.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

JUNE 30, 2016

And if you raise the “5 on 20” and don’t grow into your next-round valuation you’re stuck because venture investors HATE doing down rounds. The data suggests that the investors have a much easier time hitting a $100–200 million outcome than a $400–500 million outcome so it’s easier to commit at lower prices.

Pre-Money Valuation 292

Pre-Money Valuation Valuation Early Stage Startup 292

ReadWriteStart

JUNE 1, 2020

You must have a prototype or a minimum viable product (MVP). To fund the sudden spike in production, funds will be required for additional inventory and wages. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. Inception stage.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

crowdSPRING Blog

MAY 10, 2013

“Working in 90-minute intervals turns out to be a prescription for maximizing productivity.” How to Set Yourself Up for a Productive Day | by Michael Hyatt – [link]. How to Set Yourself Up for a Productive Day | by Michael Hyatt – [link]. Creative product packaging – [link]. .” [link].

Social Media 93

Social Media Small Business Design Media 93

VC Cafe

OCTOBER 31, 2022

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. If the answer is yes, then a down round is likely the best path forward. Why you shouldn’t worry about raising a down round ( source ).

Founder 174

Founder Technical Review Down Round Liquidation Preference 174

VC Cafe

MAY 29, 2022

I’ll take the opportunity to share a nugget by Konvoy Ventures on the current impact they’re observing across stages in the next 12 months: Pre-Seed / Seed: These rounds will be impacted the least and will generally continue to be filled and oversubscribed. Source: VentureUnlocked newsletter. Bonus: 2022 Axios Harris 100 poll.

Venture Capital 184

Venture Capital Early Stage Valuation Startup 184

Both Sides of the Table

JUNE 22, 2011

But this mania to not miss out on the next big thing is driving some investors to pay growth-equity prices for traditional market risk (as in, they’re paying up before it is clear there is product / market fit). And so on down then line. New investors hate down rounds. If you are interested the Vimeo is here.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Lightspeed Venture Partners

OCTOBER 7, 2012

This time I’ll break down week four of this season. The first company started as a BBQ catering business, and eventually focused in on their most popular product, a dip made of blended up chicken plus various sauces. Lori believed that the company should make the product themselves, instead of licensing it. BACK 9 DIPS.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

YoungUpstarts

JUNE 26, 2020

Going all the way back to Yahoo or Microsoft, the initial products (a directory for a nascent tech called the World Wide Web, and Microsoft BASIC,) didn’t look like billion dollar products at all. a game, we are looking for a product that ends up becoming wildly popular, more popular than anyone thought it could be in the early days.

Finance 205

Finance Silicon Valley Valuation Startup 205

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

Berkonomics

AUGUST 3, 2023

Certainly, bootstrapping is a preferred method of funding growth if it does not hold back the speed of growth or hobble the quality of product or service to the extent that better-funded competitors can overtake the business. There is a lot to say about retaining control.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Berkonomics

MARCH 5, 2020

First: Product risk. . Is the product or service possible to produce at all, let alone economically enough to. One way to mitigate this is by using early money to create a prototype, to perform market research, to complete the first generation of the product, or to deliver the service to a satisfied customer.

Valuation 62

Valuation Down Round Early Stage Demand 62

NZ Entrepreneur

SEPTEMBER 16, 2020

For example, “How will unit cost affect our capital requirements and how will product pricing affect revenue?” For instance, if a product price changes by 5% and leads to a 20% change in the bottom line, this variable would require close attention from founders to manage properly. Create clear scenarios. Timing of sales.

Startup 69

Startup Sales Cycle Down Round Revenue 69

VC Cafe

FEBRUARY 27, 2024

A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? Seed is about showing initial product market fit.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Seeing Both Sides

JANUARY 9, 2009

Two areas he hammered on were immigration policy ("expand H1B visas") and shooting down the ridiculous union-sponsored "card check" law (every large company business leader I have spoken to in the last 6 months is apoplectic over this bill and view it as a litmus test for Obama's centrist economic policies).

Down Round 20

Down Round Forecast Portfolio Government 20

The Equity Kicker

JANUARY 22, 2014

A few quarters in, you realize that product/market fit is not quite there, or you’re not as far up the sales learning curve as you thought, or your LTV/CAC is suddenly in the toilet. 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

Berkonomics

MARCH 14, 2019

First: Product risk. . Is the product or service possible to produce at all, let alone economically enough to compete in the marketplace? Email readers, continue here…] Are you ahead or behind the market with your product or service? Second: Market risk. . Third: Management risk. . Fourth: Financial risk. .

Valuation 48

Valuation Down Round Early Stage Demand 48

View from Seed

FEBRUARY 19, 2015

I’ve seen many companies with great products die because a great product is not necessarily a great business. Sometimes the only path forward is to fill a gap with a down round of funding, a B-player, or some other non-ideal option. It is important to relax, and time off actually makes your work time more productive.

Founder 120

Founder Startup Cofounder Business Model 120

ithacaVC

NOVEMBER 14, 2014

A founder is about to raise their first round and asking me how to value their company. [1]. You evaluate the team, product, market and other variables – then, make a general guess. Hopefully, it’s in high demand for good reasons, otherwise you risk a down round in the future. Don’t risk a down round.

Valuation 69

Valuation Startup Down Round Early Stage 69

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. I would summarise that as getting the fundamentals right – from great product, through unit economics to stakeholder alignment.

Venture Capital 60

Venture Capital Angel Investor Startup Participating Preferred 60

Berkonomics

MARCH 15, 2012

First: Product risk. Is the product or service possible to produce at all, let alone economically enough to compete in the marketplace? Are you ahead or behind the market with your product or service? Second: Market risk. Will the public respond in numbers to buy, license or rent your offering?

Valuation 80

Valuation Down Round Demand Management 80

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”. Did we build the wrong product? And by growth I mean revenue growth. why one iPhone app succeeds vs. another). Time for a new CEO?

Revenue 22

Revenue Early Stage Down Round Software Review 22

Both Sides of the Table

FEBRUARY 8, 2016

Pragmatic cost cuts are always possible and often productive. If you can get a round done at the price you expect – well done. Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive. It’s simply not true. I’m not rooting against anybody.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

Berkonomics

JUNE 8, 2017

Certainly, bootstrapping is a preferred method of funding growth if it does not hold back the speed of growth or hobble the quality of product or service to the extent that better-funded competitors can overtake the business. There is a lot to say about retaining control. It’s an option, even though an expensive one.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

VC Cafe

SEPTEMBER 26, 2022

Before product-market fit… just care about speed of iteration according to your customer feedback. So in terms of hiring, get people that can help you build the product faster… anything that minimizes the time between observing a need or a problem, and the execution or the fix for it.” Team, product, market. subtract $250,000.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

VC Cafe

JUNE 10, 2022

new unicorns created each day), startups may find themselves raising down rounds as they struggle to justify previous valuations. On a related note, this new report by OpenView on is full of benchmarks and examples of efficient PLG (product led growth). OpenView report on Product Led Growth.

Valuation 152

Valuation Marketing Venture Capital 152

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

Business Plan Blog

OCTOBER 8, 2013

In order to launch a successful business and raise the capital needed to do so, a startup needs to consider several aspects of the business including the management team , the size of the opportunity, the product/service/technology, the market/sales/distribution channels, the competitive environment and several other factors.

Business Plan 67

Business Plan NDA Exit Strategy Valuation 67

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.) are all expensive and potentially fatal distractions if done before you have found product/market fit and a repeatable sales model. Something else?

Lean 244

Lean Silicon Valley Startup RSS 244

Both Sides of the Table

FEBRUARY 14, 2016

The principle of microeconomics is that at a market-clearing price for any product the right amount of sellers and buyers will emerge and a price will be set. Some products are “inelastic” meaning when prices go up demand doesn’t fall much (think cigarettes, alcohol or even illicit drugs). Down rounds are hard.

Valuation 150

Valuation Down Round Startup Later Stage 150

Berkonomics

JANUARY 20, 2010

Certainly bootstrapping is a preferred method of funding growth if it does not hold back the speed of growth or hobble the quality of product or service to the extent that better-funded competitors can overtake the business. There is a lot to say about retaining control.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Scalable Startup

OCTOBER 26, 2011

The second round, however, is based more on cold hard facts. Does their product line hit the mark? What are the follow on products? The second round is often for some or all of the following – corporate growth, go to market, turn the prototype into a robust offering, marketing costs, or to hire a sales force.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

abovethecrowd.com

APRIL 20, 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? A down round is nothing. Get over it and move on.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

crowdSPRING Blog

FEBRUARY 21, 2014

How You Get Slaughtered in a Down Round: When Taking Venture Capital Doesn’t Go as Planned – crowdspring.co/MvF29W. Facebook and WhatsApp: The Nineteen-Billion-Dollar App – crowdspring.co/1jOdRlK. DHL Pranked UPS Into Advertising For Them – crowdspring.co/1jOeA6v. “If you want to sell ads, sell ads.

Social Media 92

Social Media Small Business Design Media 92