Startup Professionals Musings

JANUARY 27, 2012

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Define equity type.

Term Sheet 223

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

Startup Professionals Musings

SEPTEMBER 14, 2010

The price is the percent of ownership given to the investor, calculated as “investment/post-money valuation.” The pre-money valuation is company value today, while the post-money valuation is the pre-money valuation plus the investment amount. Define equity type.

Term Sheet 227

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

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. Obviously most of these employees are working hard primarily for equity upside compensation, but Kayak’s personnel costs are roughly $200K/head so the company is highly productive on a per employee basis. Post-money valuation probably no higher than $12M (2).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Board Effect

MAY 13, 2019

Let’s not waste time listing everything startups could be doing to more effectively manage their cap tables. When it comes to cap table management in startup companies, it’s unrealistic to expect perfection. Before we dive into managing cap tables for startups, let’s define what they are. Can we be real? That’s a long list.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Both Sides of the Table

SEPTEMBER 18, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. “But lawyers will charge much more for equity.” Try doing THAT with equity.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Agile VC

DECEMBER 6, 2012

A little more inside baseball from the VC biz… why VC’s rarely make “crossover” investments, with capital from multiple funds the VC firm manages invested in a single startup (see note 1). If Acme Ventures III, LP invests in Startup X then typically Acme Ventures IV, LP would not.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

The Startup Lawyer

OCTOBER 9, 2010

But this morning I read a Dallas Business Journal article that I found amusing: A new accelerator is planning to invest $200,000 and provide up to 45,000 square feet of office space to about 10 mobile app startups in exchange for 15-20% equity in each startup. (a) a) That’s $20,000 per startup for a 15%-20% equity stake.

Dallas 91

Dallas Seed Capital Incubator Post-Money Valuation 91

Board Effect

MAY 10, 2019

It’s important to note that the structure and contents of a cap table are unique to how a company has chosen to divide its equity. Cap tables are also used to model waterfalls and what-if scenarios, giving companies a better understanding of how different events might impact shareholder payouts and equity dilution.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

Lightspeed Venture Partners

OCTOBER 1, 2012

There is a lot of momentum in startups. It is always possible, but as an investor, there are usually better opportunities to put your money to work, where momentum is on your side. The founders were seeking $100k for 15% of the company, implying a $567k valuation. Robert said- “You seem to be looking for a lifeline.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

This is going to be BIG.

MARCH 28, 2021

Consider the first money you ever take from VCs. You go back and forth on a price and you eventually settle on a post-money valuation cap of $6.5mm, meaning you have sold about 23% of your company. Well, what if I actually started looking at your net worth on paper given those valuations? million from investors.

Founder 133

Founder Post-Money Valuation Dilution Valuation 133

www.paulgraham.com

APRIL 28, 2010

When we sold our startup in 1998 I thought one day Id do some angelinvesting. You give a startup money and they give you stock. Thats how you win: by investing in the right startups. In a syndicate there is usually a"lead" investor who negotiates the terms with the startup. Seven years later I still hadnt started.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63