Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Feld Thoughts

AUGUST 25, 2015

Take a look at the founding syndicates of each: Masstor Sytems (5/1979). Quantum Corporation (6/1980). What is striking about these syndicates is that nobody had any meaningful capital, which forced syndication and cooperation. Some were Silicon Valley early stage companies, such as Apple, Quantum, and Masstor Systems.

Venture Capital 70

Venture Capital SBIC Technical Review Silicon Valley 70

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. Current Average. up slightly.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

Agile VC

APRIL 17, 2011

Post-money valuation probably no higher than $12M (2). 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). liquidation preference, 6% accumulated dividend (1).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Gust

JULY 12, 2012

In all four countries we met passionate entrepreneurs who were eager to discuss their exciting startups, as well as angel investors looking to support them. The following day, I delivered a four hour workshop on capital sources and pitch strategies for fifteen entrepreneurs in the Propel program.

Community 121

Community Estonia Ireland Finland 121

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. See Why Are Revenue-Based Investors Investing in Women & Diverse Entrepreneurs? Coinvestors: Flexible VC terms have not been standardized, which may make the investment harder to syndicate. Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

thebarefootvc

MAY 8, 2012

As an entrepreneur at heart, I often innately grasp the potential of entrepreneurs and ideas that I meet with. These days, I am seeing a large number of first time entrepreneurs with great ideas, which is fantastic to see. There is inherent risk taking when you haven’t done it before, which often leads to true innovation.

Venture Capital 78

Venture Capital Syndicate Syndication Bandwidth 78

Genuine VC

MAY 29, 2014

Yet even today, whether or not to take a (relatively) small check in a seed round syndicate from a multi-hundred million or even billion dollar fund is still a decision which takes quite a bit of consideration and sometimes consternation. So there is an element of (positive) selection bias in the larger VC syndicate cohort companies.

Syndicate 166

Syndicate Syndication Seed Stage Valuation 166

Agile VC

SEPTEMBER 15, 2011

The very strongest companies can still likely get out if they really wanted, but may not command the valuations they hoped for in more bullish times. Im a former Silicon Valley entrepreneur turned East Coast VC. The second tier of companies probably have to wait whether they like it or not. Author howerl. Filed under Uncategorized.

IPO 100

IPO Marketing Silicon Valley Technical Review 100

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. The terms and valuation for both offers were comparable and when the team debated which path to choose, we all agreed both firms would have made good partners.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

View from Seed

JUNE 10, 2020

As we’ve shared, we intentionally wanted to flip the traditional Accelerator model on its head and offer a unique offering for entrepreneurs at the earliest of stages. The dynamics for participation in the next round’s fundraise syndicate is complex, and many accelerators (and VCs) obfuscate their intentions for self-serving interests.

Cofounder 177

Cofounder Syndicate Syndication Alabama 177

View from Seed

APRIL 30, 2015

From a company milestones perspective, entrepreneurs who take on venture debt are almost always thinking about raising that next round of capital from other institutions. GM: The model is more about the relationship with the entrepreneurs, the investors, and us as the bank, as opposed to cash flow or fixed assets to lend on.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

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. Scorecard Valuation Methodology. In most regions, the pre-money valuation does not vary significantly from one business sector to another.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Both Sides of the Table

APRIL 27, 2014

Of course these are great places to network with other investors, meet great entrepreneurs and keep your connections strong with senior execs at larger companies like Yahoo!, But it’s very easy to be flattered into “here’s why we want YOU as an investor” by entrepreneurs and earlier-stage investors alike.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

Genuine VC

NOVEMBER 12, 2012

It’s really interesting, but perhaps only applicable to a more limited set of entrepreneurs. In contrast, valuation always has room to move up. Terms precedent is one solid reason (among others like founder-investor alignment) that entrepreneurs should have bias towards priced equity round vs. convertible notes in seed financings.

Finance 128

Finance Mezzanine Valuation Seed Stage 128

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

View from Seed

AUGUST 20, 2014

It seems like a high-class problem for an entrepreneur to be able to influence round composition, and it is. How should an entrepreneur think about the different types of investors affecting their seed and Series A rounds? But I find that once a company has investor interest, many other folks tend to want to pile on.

Startup 301

Startup Syndicate Syndication Boston 301

This is going to be BIG.

MARCH 3, 2014

At what valuation? Will the entrepreneur count that investor among their most helpful? Would the entrepreneur enthusiastically include them in the syndicate of their next venture? How long ago? Are they making real revenue? Are the exit prospects for the company any good? Did they lead it?

Syndicate 124

Syndicate Syndication Venture Capital Valuation 124

Feld Thoughts

DECEMBER 10, 2014

The deals tend to fall into two categories – easy and immediate, which multiple bidders generating an rapidly escalating valuation or a long slow slog through lots of “almost there but we are passing because of some arbitrary reason.” We are happy to support whatever process an entrepreneur wants to go through.

Later Stage 142

Later Stage Syndicate Syndication Portfolio 142

Feld Thoughts

APRIL 29, 2015

Now that everyone is overly focused on unicorns, the headline number on the valuation (e.g. Company X raised Y at a valuation of Z from A, B, and C) has crept into the story on big rounds. While this makes for press release fodder and ego gratification, it’s of very little use to entrepreneurs. financing of Mattermark.

Atlanta 70

Atlanta Valuation Term Sheet Finance 70

David Teten

SEPTEMBER 23, 2017

Chris Dixon, Partner, A16Z, observes , “ Success in VC is probably 10% about picking, and 90% about sourcing the right deals and having entrepreneurs choose your firm as a partner”. Signal is a fundraising tool for founders run by NFX Guild, which identifies the most relevant VCs for you. . 3) Originate investments.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Both Sides of the Table

MARCH 6, 2015

*. If you are a 20-something tech entrepreneur you could be forgiven for thinking that seed-stage investors, Angellist Syndicates and widely available angel money always existed. It is, of course, a very recent phenomenon. I was out to raise my first seed money in my second startup of $500,000.

Seed Stage 150

Seed Stage Silicon Valley Syndicate Syndication 150

Feld Thoughts

AUGUST 10, 2010

In this case neither Niel (nor I) had any interest in creating a traditional syndicate to fund the company. It’s a great example of how we like to work with entrepreneurs – especially those that we have a long history with. We did a second financing by ourselves at an increased valuation – this was the “Series B&#.

Syndicate 120

Syndicate Syndication Angel Financing Finance 120

Agile VC

FEBRUARY 28, 2012

Startups in NextView’s portfolio frequently receive inbound interest from other VC investors who are intrigued about what they’re doing, and I often talk with other early-stage entrepreneurs how to approach similar situations. Im a former Silicon Valley entrepreneur turned East Coast VC. Author howerl. Read More ».

Early Stage 100

Early Stage Syndicate Syndication Silicon Valley 100

View from Seed

JANUARY 26, 2016

This means that it has rewarded Series A and B investors for chasing momentum and made it less important for these investors to focus on valuation or sound, early unit economics. And all of that is a lot to absorb and understand, let alone react to as an entrepreneur who’s full-time job is not to fundraise.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Agile VC

MAY 21, 2012

There’s also a meaningful cohort of newly public companies that now have valuations of $1B+ who could seriously contemplate an acquisition of $100M+ for stock or cash… Yelp, Zillow, Tripadvisor, Jive Software, Splunk, and others. Im a former Silicon Valley entrepreneur turned East Coast VC. Pingback: this. Pingback: [link].

Acquisition 162

Acquisition Silicon Valley B2B Seed Stage 162

Professor VC

APRIL 1, 2010

was part of a Dow Jones VentureWire webinar last week titled Negotiating An Angel Deal: What Angels, Entrepreneurs & VCs Need to Know. One comment made by Jason was that angels tend to be less sensitive than VCs on valuation and can potentially make it difficult to get a venture financing done at acceptable valuation.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Rob Go

AUGUST 26, 2013

What I am finding interesting is watching the way valuations and difficulty of raising has changed for these different flavors of seed rounds. This led to a period of seed stage exuberance, and that led to higher valuations, larger rounds, etc. The risks were not commensurate with the valuation relative to institutional seed rounds.

Valuation 68

Valuation Seed Stage Syndicate Syndication 68

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Agile VC

SEPTEMBER 27, 2011

Providence Equity invested $100M at a $1B valuation not because of their technology or product, but because the network owners contributed a lot of valuable content… or at least access to it for 2years. Im a former Silicon Valley entrepreneur turned East Coast VC. Turns out content is still king… Author howerl. Read More ».

Silicon Valley 100

Silicon Valley Seed Stage Syndicate Syndication 100

Rob Go

MARCH 10, 2012

Valuation Discipline. We have a pretty strong sense of what realistic valuation ranges are and aren’t for seed stage companies. We try to maintain a pretty steady investment pace each year, although it tends to ebb and flow a little bit based on our deal flow and valuations in the market. Syndicate diversification.

Seed Stage 49

Seed Stage Syndicate Syndication Marketing 49

Both Sides of the Table

AUGUST 1, 2010

Many firms do it in a way that can be more detrimental to entrepreneurs. We’ll probably end up paying more than we’d want to because we want to take the investment off the market and the entrepreneur will likely feel they should get a higher price if they shopped it broadly on the open market.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Babbling VC

JANUARY 7, 2011

Valuations were also therefore lower and I believe you could extrapolate that exit valuations too were lower. Exits with "homerun valuations" such as Skype, MySql, Bebo and so forth are far more outliers in the EU than they ever would be in the US. . Further, VC's will have to simply learn to syndicate more and work together.

Finance 76

Finance LP Europe Valuation 76

Rob Go

SEPTEMBER 2, 2014

I’ve seen a few cases now where a number of very high-quality institutional investors were interested in investing in a company at valuation, but a non-institutional investor was willing to set terms 1.5 – 2X higher than that valuation. All in all, this is good for entrepreneurs. Alternative funding sources.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

Agile VC

JANUARY 27, 2012

Multi-billion dollar valuations for late stage startups like Dropbox, et al. Im a former Silicon Valley entrepreneur turned East Coast VC. How to Evaluate Firms for a Seed VC Syndicate 10 July 2012, 5:13 pm What A VC Orders for Breakfast Says 27 June 2012, 10:16 am To Leave or Not to Leave as Your Startup Grows 12 June 2012, 12:21 pm.

Hockey Stick 113

Hockey Stick Seed Stage Silicon Valley Syndicate 113

Berkonomics

DECEMBER 17, 2020

Each has a process in place to accept applications or recommendations for investment into new companies, and to review these and make decisions based upon their exploration, previous experience in the field, knowledge of the company or industry, or about individual entrepreneurs. Some can supply more when syndicating with other such groups.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Professor VC

JULY 25, 2013

This is the feeling you get from watching the venture capitalists talk about the entrepreneurs and other investors in the film. I''m all for transparency, but won''t be naming names in this post as I don''t want to put some entrepreneurs in a difficult position. Startup outcomes tend to be very binary.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46