Startup Professionals Musings

SEPTEMBER 30, 2012

Even though the Initial Public Offering (IPO) alternative for a successful startup seems to be coming back into vogue, it is relatively rare. IPOs in 2008, the market was up to a still trivial 159 in 2011. Even in most of these cases, the original startup founders were pushed out, or heavily supplemented, with “experienced” executives.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

Both Sides of the Table

JUNE 22, 2011

I recently spoke at the Founder Showcase at the request of Adeo Ressi. I said that at the Founder Showcase, too. And this is happening in mezzanine (pre-IPO) deals as well. And post IPO deals, although these tend to correct more quickly. Or worse yet they may never get financed. Why does all this matter?

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Steve Blank

OCTOBER 24, 2017

Why do these founders get to stay around? Because the balance of power has dramatically shifted from investors to founders. — Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm.

Founder 263

Founder Technical Review CTO Hire IPO 263

Both Sides of the Table

JULY 16, 2010

But VC is an “illiquid asset&# so funds didn’t disappear quickly - In 2000/01 the stock market quickly adjusted punishing investors in the NASDAQ and in individual public technology stocks. What accelerated this was the collapse of the public stock markets. But in bad economies many angels get burned.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

SEPTEMBER 6, 2010

Options are gravy - I lived through the first dot com era where we used stock options as a recruiting tool. We set our sites on our IPO price and then worked back to our current valuation and showed potential employees what we thought they could earn (with all legal caveats) if the company was successful. We give out stock options.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? 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.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Up and Running

AUGUST 18, 2014

In comparison to traditional business ventures, startups are expected to grow rapidly, at a rate of between 5% and 7% per week in their initial stage – Paul Graham, co-founder of Y Combinator. Startups have some unique struggles, especially in regard to financing. Key difference #2 – the relationship with funding.

Small Business 154

Small Business Exit Strategy Cofounder Angel Investor 154

Start Up Blog

MAY 13, 2019

Last Friday night, I did a TV interview on ABC regarding Uber’s long awaited IPO. An IPO is when a company first becomes a publicly traded stock that anyone can buy and hold. So get ready for some finance meets tech nerdocity below. Amazon IPO 1997 – 2 years after it was founded.

IPO 48

IPO Valuation Stock Cost 48

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. Have you noticed the increase of founders selling their personal stock in what is known as a “secondary?” That is the most founder friends AND angel friendly way of doing it that I have found.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. Less than you’ll probably grant your most junior employees in stock options? There were no metrics. Him: Not so good.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

David Teten

MARCH 14, 2018

Managers of VC funds typically want to grow their business aggressively, just like the founders we back. Among the sites we have found most helpful with practical guides for founders: Biztree , First Search , Foundersuite , Goodwin Founders Workbench , Guides.co , Inc.com , and StartupRocket. .

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Startup Company Lawyer

AUGUST 31, 2012

” As a result, Ted introduced the Series Seed preferred stock documents as an alternative to convertible debt for early stage investments. One major concern about convertible debt is that it eventually needs to be repaid if another round of financing doesn’t occur. The problem. Series A) or have to be repaid.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

Both Sides of the Table

JULY 27, 2014

Scott pointed to B-round SaaS valuations in excess of $100 million in $15m+ financing rounds with companies with very limited proof of customer traction or revenue. Yet Mark also pointed out that the recent corrections in the public market valuations and the scrutiny new IPOs have undergone is a health sign.

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

Business Plan Blog

NOVEMBER 13, 2013

Most startup founders do not have enough capital to launch their companies and need to raise money at some point. The return only happens when there is an exit via acquisition or an IPO. Convertible Debt Financing. Among the most common methods of funding used by startups when raising seed capital is “Convertible Debt Financing.”

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Up and Running

DECEMBER 1, 2015

At the time, Facebook wasn’t the goliath it is today and so, Choe was given a couple of options: he could have $60,000 in cash, or stock (equal to the equivalent amount of the cash back then). If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different.

Equity 60

Equity Employee Stock Options Vesting 60

Both Sides of the Table

FEBRUARY 23, 2015

For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.” The narrative of this discussion is something like this: I meet a 35-40-year-old founder with two kids and mortgage. It will likely IPO in the coming years.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

www.entrepreneur.com

SEPTEMBER 22, 2011

Entrepreneur Homepage Startups Starting a Business Home How-To Guides Startup Basics Business Ideas Business Planning Startup Financing Success Stories Home-Based Business Starting a Business Play Video How to Take a New Product from Just an Idea to a Business (Video). Financing Some Jobs Act Proposals Make Headway.

Sweat Equity 55

Sweat Equity Equity Fractional CTO CTO 55

Startup Professionals Musings

JULY 5, 2011

Even though the Initial Public Offering (IPO) alternative for a successful startup seems to be coming back into vogue, it is still extremely rare. companies made the IPO transition in 2009, out of thousands of startups. Only about a dozen U.S.

Exit Strategy 235

Exit Strategy IPO Investment Bankers Entrepreneur 235

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For

Finance 134

Finance Convertible Security Equity Seed Stage 134

Steve Blank

JULY 15, 2010

The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. VC’s invested their limited partners’ “risk capital” in a portfolio of startups in exchange for illiquid stock. Startup lifecycle in an IPO Market. Netscape’s 1995 IPO changed the rules.

Venture Capital 302

Venture Capital IPO Liquidity Event Entrepreneur 302

Hunter Walker

AUGUST 26, 2022

Hunter Walk: Ok, so we first met when you were leading comms at enterprise software company Box, a startup you joined when they were still pretty early and stayed at until post-IPO. I had gone to high school with the founders in the Seattle area, and we had recently reconnected. First, congrats! Enter Box. They gave me a shot.

IPO 91

IPO Cofounder Early Stage Portfolio 91

mashable.com

OCTOBER 16, 2010

All of this is according to Paul Graham, co-founder of the early-stage investment fund Ycombinator. The result is that many venture capital firms are now making smaller angel investments in an attempt to get close with startup founders that are likely to raise bigger funding rounds later on. Angel rounds also tend to close quicker.

Angel Investor 84

Angel Investor Venture Capital Social Media Technical Review 84

mashable.com

OCTOBER 16, 2010

All of this is according to Paul Graham, co-founder of the early-stage investment fund Ycombinator. The result is that many venture capital firms are now making smaller angel investments in an attempt to get close with startup founders that are likely to raise bigger funding rounds later on. Angel rounds also tend to close quicker.

Angel Investor 83

Angel Investor Venture Capital Social Media Technical Review 83

Cracking the Code

NOVEMBER 10, 2009

While poised with a limited number of transactions this year, the world of public Cloud Computing and SaaS companies has been marked by two events in the past few months: the acquisition of Omniture by Adobe and the high profile IPO of LogMeIn, a leading provider of PC remote access and support with a very interesting freemium model.

Software Review 48

Software Review Technical Review IPO Cloud 48

Both Sides of the Table

SEPTEMBER 29, 2009

Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. The professor plotted data and showed us statistically that most people buy stocks when they are booming (e.g. Short answer – yes. The best MBA class I took was an investment strategy class.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. . times the investment.). here of 7.65 [2].

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Haystack

JULY 8, 2018

For employees at early-stage companies… the equity you’ve been granted is likely common stock, just like the founders. You can read more about the types of stock granted in startups here. valuation, that’s sort of like a new IPO, but without the lockup period.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Gust

JULY 18, 2012

Yet I’ve rarely seen entrepreneurs more fired up than when recounting war stories of startups whose founders had control of the company wrested from them, were forced to take financing or compensation deals on outrageously onerous terms , or worst of all, fired from their own companies.

Stock Options 188

Stock Options SEC Stock Government 188

Altgate

JUNE 25, 2012

—————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. Facebook’s IPO minted many millionaires and even billionaires. Facebook’s situation is far from unique, even among recent tech IPOs.

Equity 44

Equity Vesting Cap Table Technical Review 44

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. Less than you’ll probably grant your most junior employees in stock options? There were no metrics. So a convertible note was easier.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. The most you lose is 1 or 2 months of vesting on the stock. First, you’d probably want them to receive common stock, not preferred stock (which is the likely next round). A View from the Valley.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

David Teten

APRIL 1, 2011

I hope that you can join us Monday night, April 4, midtown NYC, at a panel on “Innovation in Private Company Liquidity-Online Merger Markets, Social Media, Secondary Markets, Non-US Markets, Private Equity, and the Disappearing IPO” The program is sponsored by the HBS Club of New York and the HBS Angels of NY.

Private Equity 68

Private Equity Merger IPO Equity 68

Feld Thoughts

JULY 13, 2014

I came across one from Nic Brisbourne (Forward Ventures) titled I’m a stock picker. Nor do we care – we are much more focused on the product and the founders. Financing Entrepreneurship fundraising unicorn VC' ” It was asked by VCs to several companies I’m involved in last week.

Later Stage 195

Later Stage Early Stage Valuation Seed Stage 195

Version One Ventures

APRIL 6, 2021

The company expects its direct listing to occur on April 14, 2021 with its Class A common stock trading on the NASDAQ under the ticker symbol COIN. This marks the first IPO in the Version One family. . Preemadonna raised over $5M in seed financing. The SEC declared Coinbase ’ s S-1 registration statement effective. Stacks 2.0.7

Portfolio 60

Portfolio SEC Common Stock Angel Investor 60

ithacaVC

FEBRUARY 1, 2018

Founders often raise money from friends and family and other angels. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. And sometimes founders want to protect the financial interests of FFAs. Here is a quick guide. So not very good odds.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Feld Thoughts

OCTOBER 30, 2014

In it, he talks about how he handles public company stocks that he ends up with either via an IPO or a sale of a company he’s involved in to a public company. This morning I woke up to an email thread from a founder of a company I’m an investor in. Two weeks ago Twitter stock hit $54 / share. How about $52?

Valuation 143

Valuation Stock Angel Investor IPO 143

Startup Lessons Learned

DECEMBER 23, 2009

If you never have, you can create your own using Google Finance. Sure I can build a stock chart, like this one , that shows that eBays stock price went into a four-year decline immediately after "eBay Inc Acquires Dutch Company Marktplaats.nl." If you never have, you can create your own using Google Finance.

Metrics 167

Metrics San Francisco Lean Continuous Deployment 167