Startup Professionals Musings

JANUARY 27, 2012

When a company is at its earliest seed stage, the terms tend to be the least complex. As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. Seat on the board. Anti-dilution protection.

Term Sheet 223

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

Startup Professionals Musings

SEPTEMBER 14, 2010

When a company is at its earliest seed stage, the terms tend to be the least complex. As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. Seat on the board. Anti-dilution protection.

Term Sheet 227

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

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it. This will almost always be the best approach to an investor.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Steve Blank

APRIL 12, 2013

The first wave of startups began when R&D centers and universities began to provide the technology and seed capital for new startups that were spin-outs or spin-offs. By 1991, 70% of the Torch funded startups were getting bank financing for expansion and later stages of the new ventures, with local governments acting as guarantors.

Venture Capital 271

Venture Capital China Offshore SBIR 271

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. As with so many subjects in law and finance, mastering the jargon is half the battle. This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

OCTOBER 17, 2011

When a company is at its earliest seed stage, the terms tend to be the least complex. As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. Seat on the board. Anti-dilution protection.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. The risk here is what I refer to as the curse of over-capitalization. Seed stage was super tough. Together this means that Seed stage companies need to run longer and at a higher expense structure, meaning they need to raise a lot more capital.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Steve Blank

APRIL 12, 2013

The first wave of startups began when R&D centers and universities began to provide the technology and seed capital for new startups that were spin-outs or spin-offs. By 1991, 70% of the Torch funded startups were getting bank financing for expansion and later stages of the new ventures, with local governments acting as guarantors.

Venture Capital 163

Venture Capital China Offshore SBIR 163

ReadWriteStart

APRIL 26, 2012

Angels have significantly increased their investment activity, and are committing more dollars resulting from higher valuations," says Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics. “It If your business is beyond the seed capital stage, there’s still good news for you.

New Hampshire 120

New Hampshire Early Stage Seed Capital Angel Investor 120

View from Seed

SEPTEMBER 13, 2018

Over the past five years, we’ve witnessed an Atomization of the Seed Stage. Early fundraising is no longer a one-and-done fundraise of a single round of Seed capital subsequently followed by a Series A 12–18 months later. How much total capital has been put into the company since founding. 100K in MRR was cited).

Seed Stage 136

Seed Stage Post-Money Valuation Valuation Startup 136

Business Plan Blog

DECEMBER 10, 2013

When raising pre-seed capital from friends, family, and founders (FFF) you’ll want to consider the milestones that Angel investors care about and be sure to raise enough capital to reach those milestones. Below are the milestones that you will need to achieve in order to attract seed investment from Angels: Business Plan.

Angel Investor 55

Angel Investor Intellectual Property Seed Capital Advisory Board 55

Scott Edward Walker

SEPTEMBER 21, 2011

If you’re an entrepreneur looking for seed capital, but don’t know any sophisticated angel investors, you need to hustle and build relationships in order to get “warm” introductions. This approach will keep the financing relatively simple and inexpensive and will defer the company’s valuation (i.e.,

Preferred Stock 45

Preferred Stock Angel Investor Entrepreneur Common Stock 45

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The company spends the $1m building and launching their first product.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Rob Go

NOVEMBER 30, 2012

To do that means that you have a large enough fund to write a $3-$5M series A check, which is great, but creates a lot of misalignments that true dedicated seed funds have. Given this definition, we continue to see dedicated seed funds providing strong benefits for founders, including: Minimal signaling risk at the next round of financing.

Seed Stage 55

Seed Stage Pre-Money Valuation Dilution Early Stage 55

techcrunch.com

FEBRUARY 19, 2010

Tweet View Comments Sarah Lacy Feb 19, 2010 Pepperdine has a new study out that attempts to shed some light on the clubby, shadowy world of private finance. Researchers polled experts in lending, mezzanine capital, private equity, venture capital and private businesses themselves. Think Again.

Venture Capital 62

Venture Capital Technical Review Sweat Equity Valuation 62

Steve Blank

MAY 9, 2017

Third, venture capital has now become Founder-friendly. A 20 th century VC was likely to have an MBA or finance background. Their need to get into high-profile deals has driven late-stage valuations into unicorn territory. A unicorn is a startup with a market capitalization north of a billion dollars.

Restful 222

Restful Silicon Valley Puerto Rico San Jose 222