Both Sides of the Table

SEPTEMBER 25, 2010

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. As I’m generally a believer in ‘pricing rounds’ I initially didn’t agree with the premise of the post. Photo credit: D.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

OCTOBER 12, 2014

Prorata rights are one of the most important rights of a private market technology investors and yet are seldom fully understood. They often create the biggest tensions between investors who are investing at different stages in the business. I have seen bad behavior from later-stage VCs, believe me.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

JUNE 5, 2011

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I can’t control the market. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. 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.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

VC Adventure

NOVEMBER 14, 2012

I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by investors who, despite higher frothy valuations, are looking to hit certain ownership thresholds. Ultimately this takes advantage of the larger raise.

Balance Sheet 77

Balance Sheet Valuation Post-Money Valuation Early Stage 77

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. 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.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

AUGUST 1, 2010

Short summary of my posts: 1. There is a structural reason that VCs are investing at early stages, 2. The fact that I invest less just means the company is earlier stage and needed/wanted less or without a product/market fit we weren’t yet prepared to invest more heavily. This is the nature of compromise.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298