Berkonomics

AUGUST 3, 2023

They have been burned too badly during the last decade by overvaluing businesses and finding themselves like friends and family, “stuffed” into a down round of lower valuation when a company takes its next round of financing from the next step, venture capitalists. The post Need money? first appeared on BERKONOMICS.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

NZ Entrepreneur

SEPTEMBER 16, 2020

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.’. If a startup expects $1M in sales revenue but only gets $100k and they haven’t got a backup plan, they may face a down round or in the worst case liquidity concerns.

Startup 69

Startup Sales Cycle Down Round Revenue 69

ithacaVC

FEBRUARY 1, 2018

Or the economy tanks or stock market tanks moving valuations down at inopportune times for the startup. So, the best thing for FFAs is to continue to invest, particularly in down rounds (where the price per share is lower than previous round). Personally, I like everyone to be on the same page starting out.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

VC Cafe

FEBRUARY 27, 2024

In smaller funds, ticket sizes tend to be lower, so pre-seed is the only stage where micro funds are able to secure their minimum equity targets. Carta reports that 20% of the rounds in 2023 were down rounds, but I believe the actual number is much higher.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Scalable Startup

JANUARY 27, 2011

Growth means bigger and more complex barriers to entry – more advertising, products, support and security for your users/buyers, advanced services, etc. If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding.

Revenue 22

Revenue Early Stage Down Round Software Review 22

Berkonomics

JUNE 8, 2017

They have been burned too badly during the last decade by overvaluing businesses and finding themselves like friends and family, “stuffed” into a down round of lower valuation when a company takes its next round of financing from the next step, venture capitalists.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Growthink Blog

MAY 23, 2011

And they hire very aggressive securities attorneys to represent their interests. This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Startup Company Lawyer

MARCH 14, 2010

Given that the Series Seed is issued at a fairly low valuation, anti-dilution protection is probably not that important, as a “down round&# from a low valuation in the Series Seed is unlikely. Name of security. Deleting anti-dilution rights saves several pages of text in the Certificate of Incorporation. Series Seed.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Scalable Startup

FEBRUARY 1, 2013

Security, Cloud, NoSQL databases, etc. Because there used to be lots of issues around can I trust the security issues or liability issues, and an awful lot of big companies are now saying, “You know what, I am going to save so much money, the service is going to be so much better, my users are going to be so much happier, more productive.

Software Review 22

Software Review Startup Venture Capital Stock 22

Reid Hoffman

JUNE 8, 2021

And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. That probably saved a huge amount of dilution, rather than doing a down round at between $15 billion to $18 billion.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

www.paulgraham.com

APRIL 28, 2010

A lawyer I asked about it said: When the company goes public, the SEC will carefully study all prior issuances of stock by the company and demand that it take immediate action to cure any past violations of securities laws. For example, our hypothetical startup never spent more than halfof one round before securing the next.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Reid Hoffman

JUNE 8, 2021

And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. That probably saved a huge amount of dilution, rather than doing a down round at between $15 billion to $18 billion.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36