Berkonomics

JUNE 5, 2014

One entrepreneur has a company which appears to be scalable to a $30 million exit value in five to eight years, and a second entrepreneur’s venture seems to be scalable to $200 million in exit value in the same time frame. Yet, at the pre-revenue stage of development, angel investors price both companies at a pre-money valuation of $1.5

Pre-Money Valuation 92

Pre-Money Valuation Valuation Angel Investor Dilution 92

Both Sides of the Table

SEPTEMBER 10, 2021

And there is so much money around being thrown at so many entrepreneurs that many firms don’t even care about board seats, governance rights or heaven forbid doing work with the company because that would eat into the VCs time needed to chase 5 more deals. And the truth is that several entrepreneurs prefer it this way.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Gust

NOVEMBER 7, 2011

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. This calculator uses 25 questions to size up the progress of the new venture and calculate a pre-money valuation for investment purposes.

Valuation 87

Valuation Pre-Money Valuation Venture Capital Technical Review 87

Both Sides of the Table

MAY 28, 2018

VCs tend not to want to fund founders who raise too much money in a given round also because they know that sometimes having too many resources will lead to founders burning through cash too quickly. One entrepreneur refrain I sometimes hear is “We want to raise some extra money for M&A activities.”

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

VC Cafe

SEPTEMBER 26, 2022

The past year was a wild ride for startups and founders, giving a whole new meaning to the ”rollercoaster” aspect of being an entrepreneur. ValuatIon should be a function of value, not ego. Kawasaki’s Law of Pre-Money Valuation: for every full-time engineer, add $500,000; for every full-time M.B.A.,

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Agile VC

APRIL 17, 2011

Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Pre-money valuation was approx. Pre-money valuation was approx. Pre-money valuation was at least $250M (2). General Catalyst & Sequoia participated. Author howerl.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. Background: Adam Carlson is a serial entrepreneur who has successfully raised private capital at three different technology startups.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Both Sides of the Table

APRIL 20, 2011

The Exchange Fund – This allows the entrepreneurs to diversify their founders stock into other portfolio companies stock. Twitter wanted to raise money for this new venture at a pre-money valuation which was quite a bit higher than First Round’s $10 million limit. A few deals have been funded through this program.

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

Altgate

DECEMBER 16, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Pre-Money Valuation vs Number of Founders Where Do Tech VCs Invest? But first, let’s look at pre-money valuation by liquidation preference.

Liquidation Preference 39

Liquidation Preference Pre-Money Valuation Term Sheet Valuation 39

Lightspeed Venture Partners

OCTOBER 29, 2012

The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. Unsurprisingly, all the sharks passed, based on market size and valuation expectations. SBU sought $300,000 for 10% of the company, implying a $2,700,000 pre money valuation.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

Both Sides of the Table

JULY 23, 2014

pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. Because this is all VCs do and if we intend to work with all of our fellow VCs and entrepreneurs when the rain ends and the sun shines again our reputations matter greatly.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Gust

JULY 23, 2014

So, putting all that together, to get a pitch meeting with me, an entrepreneur would probably have the best result with the following strategy: Read up on the kinds of investments I make, and the kinds of opportunities I am seeking. Invested Interests Power Pitches angel investor business David Rose entrepreneur meeting pitch startup'

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

Both Sides of the Table

JUNE 22, 2011

This was an audience of mostly first-time entrepreneurs. It is great for entrepreneurs and great for VCs. So here is what I have been telling entrepreneurs privately for the past 6 months. What a bubble means for each entrepreneur. Still, market amnesia by ordinarily rational actors always surprises me. I believe that.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

David Teten

SEPTEMBER 16, 2014

Angel investors are generally former entrepreneurs and/or executives, who invest in privately-held, early-stage companies. Villalobos & Payne: “Startup Pre-Money Valuation: The Keystone to Return on Investment” 117. Lastly, angels want to serve as mentors to the next generation of entrepreneurs.

Angel Investor 114

Angel Investor Technical Review Venture Capital New Hampshire 114

Austin Startup

JUNE 21, 2018

Our pre-money valuation for the seed round is 2 trillion dollars.” Now, if you’re a crypto entrepreneur, you still have to abide by the basic rules of good startups (link shamelessly inserted if you missed it before). Now go out and make Ronald Coase proud: start lowering those transaction costs crypto entrepreneurs!

Securities and Exchange Commission 61

Securities and Exchange Commission SEC Pre-Money Valuation Security 61

Startup Professionals Musings

JANUARY 27, 2012

Entrepreneurs sometimes assume an initial agreement with an Angel is a commitment, so they start spending before any money is received. It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

Both Sides of the Table

FEBRUARY 15, 2016

This has led VC & entrepreneur bloggers alike to similar conclusions: start raising capital early and be careful about having too high of a burn rate because that lessens the amount of runway you have until you need more cash. I’m surprised how few entrepreneurs have this open conversation with their investors.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

ReadWriteStart

OCTOBER 7, 2010

Before I do, however, I want to talk about a thumb rule that I'd like to propose to entrepreneurs about raising money. So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. I encouraged Todd to keep building.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Lightspeed Venture Partners

OCTOBER 7, 2012

This does neither, so I’m out” Cuban said, “I see you guys not as entrepreneurs but as wantrepreneurs” I agree with him. In this way, they remind me of the Lifter Hamper entrepreneur. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. The right number to focus on is pre money valuation as that is how an investor is valuing the company before the investment. Post money valuation = Pre money valuation + Investment.

Pre-Money Valuation 158

Pre-Money Valuation Post-Money Valuation Valuation Dilution 158

Startup Professionals Musings

SEPTEMBER 14, 2010

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board. Marty Zwilling.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. One: The entrepreneur. First, there is the entrepreneur , the visionary, and force behind the venture from start to finish. It starts with sharing the opportunity and upside. Two: Co-management. Reward for early risk.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Both Sides of the Table

SEPTEMBER 29, 2009

But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. It is no wonder why they had less time for new deals.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Jason Ball

SEPTEMBER 28, 2010

Don’t sweat the valuation too much. If this is your first start up, you’re not going to get a great multi-million dollar pre-money valuation, nor a lot of cash up front. A $5M Series A is pretty spectacular, and even a $10M pre-money valuation for twitter would have been a good result.

Pre-Money Valuation 34

Pre-Money Valuation Valuation Dilution Venture Capital 34

This is going to be BIG.

OCTOBER 10, 2014

The criteria for what is a Seed and what is a Series A for these purposes is whether or not the first round of the company was within the same year that I did the investment, and it had to be less than $750k of prior money. Well, if you group them all up, here''s what you get: Pre-Money Valuations (M). Not Launched.

Pre-Money Valuation 146

Pre-Money Valuation Dilution Valuation Term Sheet 146

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

crowdSPRING Blog

APRIL 26, 2013

Q1 Venture Capital Spending & Number Of Deals Down, M&A Activity Drops 44 Percent And Pre-Money Valuations Plummet – [link]. 10 Things Entrepreneurs Can Learn From High School Seniors – [link]. Downfalls of Distributed Startups – [link]. ” – [link].

Social Media 90

Social Media Small Business Design Media 90

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Here’s the “what.”. And here’s the “why.”.

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, playing coy, or quoting an exorbitant number. Marty Zwilling.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

David Cohen

AUGUST 1, 2018

When valuations rise, so do the caps on notes, which are upper limits on valuation at conversion. In many cases the caps are very high because the entrepreneurs are telling the investors that they’re super confident they’re about to raise a larger round and they just need to “bridge” the company to that larger round.

Pre-Money Valuation 83

Pre-Money Valuation Valuation Equity Finance 83

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

Valuation 187

Valuation Pre-Money Valuation NPV Startup 187

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. We already agreed on my deal – 20%.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

FEBRUARY 17, 2011

This conversation seems to come up very frequently these days both with portfolio companies and with entrepreneurs just looking for mentorship. I like to tell entrepreneurs that the “fairway&# of fund raising is 25-33% per round. 5 million raised at a $9 million pre-money valuation or 35.7%

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Gust

OCTOBER 17, 2011

Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Seat on the board.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Gust

MAY 15, 2015

Entrepreneurs seem genuinely surprised to find that investors in Peoria or Little Rock are not willing to invest in startup companies at Silicon Valley prices. After all, they just read in TechCrunch that investors funded a company similar to theirs at an $8 million pre-money valuation!

Pre-Money Valuation 70

Pre-Money Valuation Silicon Valley Valuation Startup 70