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. Is a completed product necessary to get funding?

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

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. Shelton came under intense questioning about how she justified her valuation given no proof of demand.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

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

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

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]. “sometimes you have the right product but the wrong business model.”

Social Media 90

Social Media Small Business Design Media 90

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

Lightspeed Venture Partners

OCTOBER 7, 2012

The first company started as a BBQ catering business, and eventually focused in on their most popular product, a dip made of blended up chicken plus various sauces. While they were very complimentary of the team and product, they all gave versions of the “I’m not the right guy to help, so I’m out” pass.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

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. Value Of Insight Consulting, Inc.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

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

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 Pre-Money Valuation 114

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

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

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 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164

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. When you see evidence that there is this so called “product / market fit&# then you may be ready for larger amounts of capital. 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

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

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

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 Intellectual Property 187

Agile VC

MAY 26, 2011

I also joke with Reid Hoffman that this was back in the days before he was “Reid” Reid’s an incredible entrepreneur, startup investor, and human being. Yes… he was a very successful PayPal exec and previously co-founder & VP Product of SocialNet. It was a pretty good valuation for the time.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Lightspeed Venture Partners

NOVEMBER 19, 2012

The next two entrepreneurs run a wine tasting cruise business. He developed the product out of necessity. Much of the money went into buying inventory, and a founder with around 40% owernship is still highly motivated to see the company succeed. Cuban loved both the idea and the entrepreneur. Corks Away.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. Or, in the case of a convertible note, they’ll explicitly state a valuation cap. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. Price is always a consideration in investing, but particularly so if the entrepreneurs have shown an interest in an early exit. The entrepreneur took this offer.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. It could be building an early version of the product. Or even doing pre-sales or lead generation well before having a product.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

ithacaVC

JANUARY 14, 2014

I was giving some advice the other day on how to approach Series B investors in terms of valuation. Company X raised its Series A at a pre-money valuation of $5mm and it raised $4mm dollars. So the post-money valuation after the Series A was $9mm. What should the pre-money valuation be for the Series B?

Pre-Money Valuation 58

Pre-Money Valuation Post-Money Valuation Valuation Term Sheet 58

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). Barbara suggested that this was more money than the company needed. The entrepreneurs asked what value the investors would add beyond money.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

The Startup Magazine

SEPTEMBER 12, 2019

Realistically, VCs expect 90% of their ventures to fail, but entrepreneurs expect 100% of their ventures to succeed. Focus on Product Development First. We prioritized validation from our customers by listening carefully to what our customers wanted and focusing on early-stage product development. It certainly was for us.

Early Stage 98

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 98

Startup Lessons Learned

JUNE 19, 2019

Meanwhile, we recently talked with him about his thoughts on 35 years in Silicon Valley, why the skill sets of venture capitalists and CEOs are so different, and why telling a good story about your product is so crucial. If they really could build what they said they could, then you knew that people would buy the product.

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159

ithacaVC

APRIL 25, 2012

If you want to scare off VCs, start your pitch with “we are looking to raise $X at a pre-money valuation of $Y” Stating how much you want to raise is fine and recommended. However, stating a desired pre-money valuation early in the process is not a good idea. Here is why.

Valuation 49

Valuation Pre-Money Valuation Liquidation Preference Preferred Stock 49

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 million and is established by negotiations between the entrepreneur and the angel investors. Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Hippoland

AUGUST 31, 2018

A few months ago, I was talking with a friend of mine who is a successful serial entrepreneur. There’s a lot of work to do to prepare to raise money at this pre-seed stage. It could be building an early version of the product. Or even doing pre-sales or lead generation well before having a product.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The company spends the $1m building and launching their first product. The product gets a lot better. ” They are running out of money.

Recapitalization 70

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

Genuine VC

JULY 30, 2012

In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: Lower than “market.” This approach is almost never a good idea. By definition, all entrepreneurs should think that their endeavor is truly exceptional. Above market.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

K9 Ventures

MARCH 23, 2011

Obviously, both the founders and the note holders have the common objective of getting the company funded; but assuming the company is fundable, there is a basic misalignment of incentives when it comes to valuation. The typical fix for this problem is to put in a cap in the note for the pre-money price for conversion.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Berkonomics

NOVEMBER 4, 2016

So how do you use financial projections as valuation metrics when you know the odds of those being accurate predictors of the future are so very unreliable? I thought then that the best way to value a start-up is to give value to those elements of progress by the entrepreneur or team that reduce risk of success.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. The option pool lowers your effective valuation.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

www.currentlyobsessed.com

MAY 28, 2010

Currently Obsessed Joe Heitzeberg – Entrepreneur | Tech Geek | MBA Home About Me Joe Heitzeberg is an internet entrepreneur who has started and sold two companies. Entrepreneurs are generally too focused on pre-money valuation, and VCs know this. Future value is key. cthomaschase great post.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

thestartuplawyer.com

FEBRUARY 24, 2010

Entrepreneurs often believe their startup company faces legal threats from only external sources. Even so, I believe the negative experience can end up producing a better entrepreneur if he or she applies lessons learned to current and future startups. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40