David Teten

JANUARY 19, 2021

When the company hits potholes, Flexible VC investors usually don’t have the nuclear options of firing management and/or doing a recapitalization. Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

philipsmith.typepad.com

SEPTEMBER 24, 2011

While there have been times in the last dozen or so years, usually during times of venture capital excess, that cash to founders, early-stage executives and other key employees has matched regular market compensation (still with the upside of the equity), this is not true in the vast majority in the start-up game. New Business Models.

Silicon Valley 40

Silicon Valley Equity Technical Review Recapitalization 40

Feld Thoughts

JULY 14, 2015

But instead of adding it on to the note or doing an equity round with a price, which could still be an early stage price but below the cap, they make the argument that since the company couldn’t raise a round, the company is worthless. So they recapitalize the company.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

abovethecrowd.com

APRIL 20, 2016

This severely heightens the risk of either running out of money or a complete recapitalization that wipes out previous shareholders (founder, employees, and investors alike). Never in the history of venture capital have early stage startups had access to so much capital. Competition also has access to capital.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.paulgraham.com

APRIL 28, 2010

Theres no real answer.There is no rational way to value an early stage startup. Then its up to themto tell VCs early on. The reason you dont want to give them up is the following scenario.The VCs recapitalize the company, meaning they give it additionalfunding at a pre-money valuation of zero.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Both Sides of the Table

MARCH 1, 2010

Large early stage rounds. • Work with the best at early stages : I’d like to get involved with capital efficient companies early in their lifecycle. It’s the “entrepreneur thesis.” Let me outline the contra viewpoint, which is never expressed openly, but it what I believe gives our industry a bad reputation.

Entrepreneur 321

Entrepreneur Warrant Silicon Valley Early Stage 321