David Teten

DECEMBER 15, 2018

Existing investors have said they’d be glad to invest…if she gets a new lead investor, which 6 months of searching have failed to generate. Consider approaching one of the small number of funds which acquire tech startups, e.g., Constellation Software , Think3; Vista Equity Partners. The CEO comes to us.

Startup 60

Startup Later Stage Technical Review Software Review 60

Berkonomics

JANUARY 25, 2024

Board members or lead investors as coaches If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success.

SBA 62

SBA Warrant Stock Options Vesting 62

Hippoland

JANUARY 4, 2017

Equity Traditionally, investors have invested in companies to receive equity, or shares in a company. Simplistically, if I’m an investor who is interested in buying a percentage of your company, I’ll offer you money, and you’ll send me a certificate indicating how many shares — how much of your company — I own.

Convertible Security 48

Convertible Security Equity Security Silicon Valley 48

Pascal's View

JULY 9, 2017

At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. They do not recognize that they may have already contractually sold a meaningful portion of equity in their company. All of these items are postponed until the elusive priced equity round.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Also, sharing some flavor (but not necessarily full detailed specifics) of the existing investor-set adds context. What not to include is directly stating valuation expectations.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

ReadWriteStart

JULY 18, 2011

He believes that equity need not be distributed equally, as long as everyone involved is happy with their arrangement. And as long as founders don't have an argument about equity shares in front of the investors they are pitching. How many seed investors should you take money from? You can also follow Kedrosky on Twitter.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

Both Sides of the Table

SEPTEMBER 23, 2010

Convertible or equity? If you have a “lead&# investor agreed then the price is already set and you don’t have to worry about price. Have you looked at competition? How well financed is the competition? What is their market traction? How much are they raising? How much is soft-circled (committed)? At what valuation?

Entrepreneur 292

Entrepreneur Technical Review Stealth Valuation 292

This is going to be BIG.

FEBRUARY 27, 2011

This is where your business starts to incur real costs—but it’s also where entrepreneurs don’t like to be short term “sellers” of their equity. They’re hesitant to raise money—selling equity to investors—when things look great.

Dilution 104

Dilution Equity Hiring Partner 104

Startup Professionals Musings

AUGUST 29, 2016

On the positive side, friends and family probably won’t be as demanding on your financial projections as a professional investor, and they likely will be satisfied with an initial offer of a convertible note (loan with option to convert to equity later), so you don’t have to give away the store before you get started.

Elevator Pitch 151

Elevator Pitch Exit Strategy Angel Investor Equity 151

This is going to be BIG.

MAY 4, 2022

Would you take a check from a corporate raider whose private equity dollars come with mass layoffs and union-busting? So when you finally do get an offer to invest, the temptation to not question where it comes from is understandable. A lot of people make their money in ways that you wouldn’t necessarily feel great about.

Cap Table 163

Cap Table Cofounder Private Equity Finance 163

www.paulgraham.com

OCTOBER 23, 2010

Angels In the big angel rounds that increasingly compete with series Arounds, the investors wont take as much equity as VCs do now. AndVCs who try to compete with angels by doing more, smaller dealswill probably find they have to take less equity to do it. forstartups was to find one angel to act as the lead investor.

Startup 93

Startup Valuation Non-Compete Deal Flow 93

Scott Edward Walker

JUNE 9, 2019

First let’s discuss pro rata rights (sometimes referred to as “participation” or “preemptive” or “right of first offer/refusal” rights) – which investors will typically request in connection with any venture capital financing. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

www.seriesseed.com

DECEMBER 9, 2012

.  That’s because there are not that many issues to negotiate in a simple equity financing.   Based on the comments received, both on the blog and in the many deals in which these documents have been used, I am convinced that the terms of a simple set of equity documents are really not an issue. 

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Berkonomics

DECEMBER 7, 2017

If you take smart money from a good angel or venture organization, the lead investor usually becomes your board member and has a vested interest in your success. The one warning: avoid those looking to become partners, asking for larger portions of equity than, say, 5% when they contribute no cash to the enterprise.

Warrant 97

Warrant Stock Options Vesting Equity 97

David Teten

SEPTEMBER 5, 2014

I’ve written on the expert network industry a fair amount in the past: see How to Earn More Consulting Revenue from Expert Networks and How Executives Can Work with Private Equity and Venture Capital Portfolio Companies. GLG Share broadens that resource pool to our 400,000 experts around the world and across industries.

New York 114

New York Technical Review Networking Advisory Board 114

Haystack

SEPTEMBER 2, 2018

Most of the rounds I participate in today are priced equity rounds. Most of these rounds have the investor wire on a specific day. There is a process the founder goes through, he or she collects interest, and then works on closing the round with their lawyers at a fixed time.

Seed Stage 76

Seed Stage Seed Capital Equity Europe 76

The Next Web

DECEMBER 4, 2012

The company says it will not take equity or a share of any company that emerges from this program. million , with its most recent round coming earlier this summer, with the lead investor being iNovia Capital. If you want to apply, you have until the end of the year to submit your name for consideration.

Incubator 119

Incubator Engineer Developer San Francisco 119

Both Sides of the Table

JUNE 5, 2015

” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. If you think the other investors will be super value-added – no problem! For me it’s clear. Then you’ll willing to take more dilution for them.

Pre-Money Valuation 150

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

The Startup Lawyer

JUNE 9, 2010

Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. It aligns his interest with the equity holders. But if the startup’s CEO gets a huge salary, the startup CEO could likely view his or her equity stake as “house money&# (i.e.,

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

Feld Thoughts

AUGUST 2, 2010

This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors. They are: Fred Wilson: Lead Investors, Dipshit Companies, and Funding Every Entrepreneur.

Angel Investor 152

Angel Investor Cofounder Syndicate Syndication 152

Gust

DECEMBER 27, 2012

Keep in mind that any cash you put in will remain in the company as Founders’ Equity, and will only come back to you on a successful exit in which your investors make money. [3a. With #1 – #3 under your belt, you should start preparing the components you will use to support your pitch to outside investors.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

Growthink Blog

MAY 3, 2010

Series B funding, as you may recall, is the 2nd institutional round of equity funding that a company receives. The "lead" VC firm creates the terms of the deal. The other investors are called "syndicate investors" or "co-investors" and invest at the same terms as the lead investor, so you only need to negotiate once.

Venture Capital 71

Venture Capital LP Syndicate Syndication 71

Reid Hoffman

JANUARY 26, 2021

This is one of the reasons why the best practice for a startup is to raise investment rounds from different lead investors rather than simply doing internal rounds, even if an internal round requires less work. Founders should receive additional equity grants, but not to the extent that an incoming CEO or executive would.

Startup 36

Startup Equity Early Stage Green 36

ithacaVC

DECEMBER 9, 2018

Independent directors are usually compensated (often with equity) so they are motivated to directly help. Sure, the person will ultimately typically need to be mutually agreeable to the lead investor and founders but having the founders source the person strikes the right balance in my opinion. These are just examples.

Stock Options 40

Stock Options Salary Lead Investor Founder 40

Bryce Dot VC

FEBRUARY 12, 2015

Terms We’ve worked with the team at Cooley to create an investment instrument that has elements of both debt and equity. Debt in that we will not be purchasing equity initially, but, unlike debt, there is no maturity date, no collateralization of assets and no recourse if it’s never paid back. Within the indie.vc

San Francisco 40

San Francisco Distribution Equity Delaware 40

ithacaVC

NOVEMBER 14, 2014

The valuation only exists if investors validate it. Traditionally, there’s a lead investor that validates a valuation, but a lot of companies now raise without a lead. By getting a few investors to buy in at a specific valuation, they’re effectively validating the amount. Map out multiple stages of financing.

Valuation 69

Valuation Startup Down Round Early Stage 69

Both Sides of the Table

MAY 13, 2018

If you’re raising a round where a new lead investor would invest $5 million the VC fund must have no less than $100 million and if you’re looking for them to write $15–20 million as the lead their fund realistically should be at least $400 million.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

View from Seed

JANUARY 26, 2016

Third, founders at this stage have an incentive to minimize dilution at the point when their equity is the least valuable. They are either repeat successful founders or first-time founders who are still well-known and well-respected individuals by the lead investor. This is why pre-seeds tend to be between $50K and $500K.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Berkonomics

JULY 3, 2010

If you are lucky enough to create competition among investors for your company, you can select the investor or group with an individual who has experience in your niche and identifies with your vision. And some will willingly work for stock options, an amount to be negotiated based upon time spent and stage of corporate development.

Warrant 71

Warrant Stock Options Vesting Equity 71

Both Sides of the Table

OCTOBER 14, 2009

It’s just that many companies waste equity on advisory boards, pick the wrong advisers or set up advisory boards with the wrong expectations. That’s what “information rights&# are for and you can promise the investor to meet 1-on-1 on a quarterly basis. People love their advisers and I don’t blame them.

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. In a CTO Salary and Equity trends report by Safire Partners, it finds non-founder equity compensation to settle out below 2 percent. Why not wait until the opportunity to be engineer #10, #20, #100?

Engineer 129

Engineer Dilution Option Pool Vesting 129

SoCal CTO

SEPTEMBER 8, 2010

How I Think About Seed Investing As A VC - Feld Thoughts , August 2, 2010 Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors.

Startup 191

Startup CTO Hire Cofounder Venture Capital 191

Rob Go

AUGUST 29, 2016

My advice here is that if the additional dilution is material, and you feel like there is a strong argument to take more money, you should go back to your lead investors and try to argue to share in the dilution together. Maybe adjust the post money a bit as well, so that you don’t bear the entire burden. Worst case, they say no.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

David Teten

JULY 12, 2017

Steve Brotma n of Alpha observes, “In general, for any co-investor, the higher the quality of the institutional VC firm lead for the new round and the more reasonable the valuation, the better the odds of a coinvestment. Hence, if Sequoia is the lead and the valuation is reasonable, it’s near 100% chance.

Syndicate 60

Syndicate Syndication Institutional Investors LP 60

This is going to be BIG.

AUGUST 2, 2010

First off all, not every company is right for equity financing—and many other companies would be better off starting without it. ” I’m all for more entrepreneurship, but I think it’s a slippery slope to tie together funding an increased number of companies with a better innovation landscape or even a better economic.

Startup 101

Startup Venture Capital Incubator Programming 101

David Teten

JANUARY 10, 2012

He is an active angel with many successful angel investments including: Rent.com, (purchased by Ebay in 2005 for $415 million), Golfnow.com (purchased by Comcast in June 2008), and Lifelock (lead investors include Bessemer Venture Partners and Kleiner Perkins Caufield & Byers).

Technical Review 128

Technical Review Technology North Carolina Switzerland 128

The Equity Kicker

DECEMBER 3, 2012

Too often the finance lens leads investors to jump on bandwagons and invest in sectors which are hot and where companies look like they will be able to pull in hot money at big valuations and get premium exits, even when the underlying product proposition isn’t very strong. At the highest level I think Chris is right.

Finance 116

Finance Valuation Lead Investor Startup 116