Both Sides of the Table

SEPTEMBER 25, 2010

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. As I’m generally a believer in ‘pricing rounds’ I initially didn’t agree with the premise of the post. Photo credit: D. rings true to me.

Finance 286

Finance Term Sheet Technical Review Warrant 286

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. It’s worth reading his post to understand the problem. In the old days VCs funded off of a “pre-money” valuation. So how DOES a VC think about financings at early stages?

Pre-Money Valuation 150

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

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. 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. Employment.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417