Both Sides of the Table

SEPTEMBER 10, 2021

Today you have funders focused exclusively on “Day 0” startups or ones that aren’t even created yet. They might be ideas they hatch internally (via a Foundry) or a founder who just left SpaceX and raises money to search for an idea. And the truth is that several entrepreneurs prefer it this way. The legends of Silicon Valley?

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. Conversely many VCs believe that constraining cash can often lead to increases in creative solutions at a startup.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. 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).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

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

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. The “big boom” in startup financing started around March 2009?—?more Marc Andreessen captured some of this sentiment in his recent “ 10 Ways to Damage Your High-Growth Tech Startup ” Tweetstorm.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Both Sides of the Table

APRIL 20, 2011

As a courtesy if you enjoyed his write-up please check out his startup company, ChannelStack. The Exchange Fund – This allows the entrepreneurs to diversify their founders stock into other portfolio companies stock. First Round Capital’s pre-money range is usually between $3-5 million. Ultimately, only 25 will be chosen.

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

YoungUpstarts

SEPTEMBER 15, 2018

Startup valuation, under no circumstances, can be described as a simple affair. While valuing a publicly traded company is more or less straightforward, the case with a rarely profit making startup is not quite the same. Here are several factors that are taken into account while these startups are evaluated.

Pre-Money Valuation 124

Pre-Money Valuation Valuation Sweat Equity Startup 124

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

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

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). It will revolutionize produce sales globally. By: Joe Merrill, Partner at Sputnik ATX.

Securities and Exchange Commission 61

Securities and Exchange Commission SEC Pre-Money Valuation Security 61

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.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

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

View from Seed

OCTOBER 21, 2014

As the seed-stage startup fundraise process has received more transparency in recent years, ranging from published advice on how to raise seed capital to increased availability through AngelList, Funders Club, and various accelerator programs, I’ve noticed another trend emerging. Lower-Than-Market Value. Above-Market Value.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

David Teten

SEPTEMBER 16, 2014

Angel investors are generally former entrepreneurs and/or executives, who invest in privately-held, early-stage companies. These companies can range from tech startups to food trucks to retail stores. Sohl: “The Angel Investor Market in 2009: Holding Steady but Changes in Seed and Startup Investments”. approx 2004-09.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

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

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” Team strength and experience is value.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

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! Guess again! A Read more >.

Pre-Money Valuation 70

Pre-Money Valuation Silicon Valley Valuation Startup 70

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

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

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Term-sheets and Valuations: Thinking about Negotiations. Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues. By Tim Keane, Angel Investor, Golden Angels Investors, LLC.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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

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

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

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

YoungUpstarts

SEPTEMBER 4, 2017

Investing in startups is a lot more than just buying “stock” in a company. For investors who have come to the table with a history investing in publicly listed companies or the property market, it’s easy to think that backing startups is largely a “set and forget” strategy. Ask yourself, where is your startup currently struggling?

Pre-Money Valuation 187

Pre-Money Valuation Seed Stage IP Deal Flow 187

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

The Startup Magazine

SEPTEMBER 12, 2019

Most startups view venture capital funding as a blessing from above — eager to take it as soon as they can get it. Tempted by large sums of money and the perceived validation that comes along with being funded, founders turn to venture capitalists to accelerate their company’s growth. The expectations are fundamentally misaligned.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

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

Agile VC

MAY 26, 2011

AGILEVC My idle thoughts on tech startups. Salesforce.com is a startup with 76,000 subscribers (over 2.1M 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. How to Evaluate Firms for a Seed VC.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

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

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

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’m a very big believer in the “Lean Startup&# principles as espoused by Steve Blank and Eric Ries. 5 million raised at a $9 million pre-money valuation or 35.7%

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. In the old days VCs funded off of a “pre-money” valuation. Pre-money ($8m) + investment ($2m) = Post-money ($10m) and the investors now own 20% of your company $2m / $10m.

Pre-Money Valuation 150

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

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. The simplest illustration is the first VC funding round of a new startup. Suppose it raises $2 million at a $6 million pre-money valuation.

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162