Ben's Blog

JULY 16, 2013

In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation. Things change.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. He’d be employee number 3. They raised $5 million in their B round. The company was being spun out of a larger company.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Board Effect

MAY 13, 2019

Let’s assume your startup enters into negotiations at this stage with a neatly-formatted cap table, outfitted with equations for pre- and post-money valuation as well as equity dilution. Some startup companies also choose to implement an employee stock purchase plan (ESPP). Managing Cap Tables in Seed and Angel Funding.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

VC Cafe

JUNE 10, 2022

According to new research by Pitchbook , the trickle down effect has already started in seed and series A startups with round sizes and valuations shrinking in size compared to 2021. But recently those round sizes and valuations have tumbled to about $10 million and $50 million, respectively, he said.

Valuation 151

Valuation Marketing Venture Capital 151

Ben's Blog

JULY 16, 2013

In June of 2000, I raised money at an $820M post-money valuation. By the end of the year and despite more than doubling bookings, I could not raise money at any price in the private markets and was forced to take the company public at a $560M post-money valuation. Things change.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

Gust

SEPTEMBER 17, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? Him: Not so good. Me: I know.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Altgate

DECEMBER 18, 2008

Then your other preferred investors will get their preference (let’s assume they have $12MM at 1x invested in two rounds at a $17MM post-money valuation which would make the “current&# round flat). But non-management employees and founders will be thrown table scraps and crushed down.

Liquidation Preference 31

Liquidation Preference Venture Capital Post-Money Valuation Participating Preferred 31

Professor VC

FEBRUARY 12, 2015

I was an informal advisor to the founders from the time they were the only two employees. In 2008, I made an investment offer of $250K for approximately 38% of the company ($400,000 pre-money valuation). The current valuation of $2B is 3,000X the proposed post-money valuation of that seed term sheet.

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

betashop.com

OCTOBER 8, 2012

If we don’t enjoy working with someone - an employee, a partner, whomever - we’re just not going to do it. Sure, we employee lots of amazing people whom we trust to help us make it great, but as Founders we still own and control the final product. 10M post-money valuation = $100M target. It’s that important.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Board Effect

MAY 10, 2019

There’s the owner—maybe a partner or two—but unless employees are offered equity from the get-go, there’s typically not a whole lot of dilution. It’s not unusual for owners to offer equity to early employees and advisors, both as a motivator and a form of compensation before the business turns a profit. Why do cap tables matter?

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

Lightspeed Venture Partners

SEPTEMBER 23, 2012

post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation. The company ended up negotiating with Cuban and settled on $300k for 30% of the company, or a $1M post money valuation.

Pre-Money Valuation 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

www.paulgraham.com

APRIL 28, 2010

2 ] When you negotiate terms with a startup, there are two numbers youcare about: how much money youre putting in, and the valuation ofthe company. The valuation determines how much stock you get. Ifyou put $50,000 into a company at a pre-money valuation of $1million, then the post-money valuation is $1.05

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63