K9 Ventures

JUNE 5, 2015

So in this post, I present the epilogue to The New Venture Landscape that highlights my take on what I think the venture landscape looks like today and what the implications are for founders, for GPs and for LPs. Implications for Founders. Too many founders still think that. The Epilogue. Seed is the New A. Well, yes they do.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Revenue multiple? How will you price the next round?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

FEBRUARY 15, 2016

And recaps hurt founders so often people just avoid doing them. So if they’re in the mindset that they’re better off getting their $20 million back versus risking more capital then they may prefer just to sell your company for whatever you can get for it. Are Your Existing Investors Over Their Skis?

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

SEPTEMBER 2, 2009

If a company has reached a level of success, has been around for a few years and you believe the company has potential to break out into a much bigger company then you should let the founders take money off of the table. The VCs basically have liquidity in management fees along the way, in the sense they get paid decently along the way.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Tim Keane

JANUARY 12, 2010

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model. Second a liquidation preference and a participation. These include: ·       Vesting of Founder Stock.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Feld Thoughts

SEPTEMBER 9, 2015

We basically doubled the number of unicorns in the past year and a half,” says Aileen Lee, the founder of Cowboy Ventures, who has herself become a mythic creature in the Valley after coining the term. I once was on the board of a company that had generated lifetime revenue of $1.5m Don’t feel bad for me.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

Both Sides of the Table

SEPTEMBER 28, 2013

For starters let me use “CEO” as a proxy to include her “inner circle” which might mean co-founders or might just mean senior execs of the business. The Mind of the Founder. The mind of a founder is wired differently than most people. The startup CEO was not the original founder.

Startup 417

Startup Dilution San Diego Stock Options 417

Up and Running

MAY 21, 2015

What this means, is that he gets paid not as a portion of the profit, but as a portion of the overall revenue, regardless of the profit. That’s because preferred shares operate under a completely separate set of rules (which will be defined in the investment documents) than your shares. Liquidation preference.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

Both Sides of the Table

NOVEMBER 4, 2009

BTW, this ignores liquidation preferences which actually mean you’ll earn less. So when the Stanford MBA, the ex senior technology developer or the former Chief Revenue Officer of a company is calling me and asking my advice on their next gig you can see why I start with “are you ready to earn or to learn?&#.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Up and Running

DECEMBER 30, 2015

To help you become a savvy founder (and avoid these mistakes), we asked nine successful entrepreneurs from the Young Entrepreneur Council to talk with us about the mistakes they’d made in the past, and to give a bit of advice on how others can avoid doing the same. Overestimating future revenue. See Also: Rejected by Investors?

Due Diligence 84

Due Diligence Valuation Liquidation Preference Redemption 84

Growthink Blog

MAY 23, 2011

With this capital, the company propels itself to $50 million+ in revenues, and to either a sale to a strategic acquirer or to an initial public offering. This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Spencer Fry

APRIL 17, 2017

If this is the case, you may find yourself starting all over with little revenue (if any), a 1-2 person team that might be consulting on the side to pay bills, and no marketing spend. As a bootstrapped startup, the only accountability you have is to yourself and to your co-founder if you have one. The quality bar has never been higher.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Gust

MAY 24, 2012

Some commentators have suggested this is the wave of the future, signifying a shift in the balance of power from investors to founders of the relatively small, elite group of growth companies that make it to public markets. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

abovethecrowd.com

FEBRUARY 24, 2015

As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. You must subtract it from your top-line revenue. You should not pay a net revenue multiple for a gross revenue disclosure.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

dondodge.typepad.com

JANUARY 15, 2011

The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. Founders usually end up with 10% to 20%, all the other employees end up with about 15%, and the VCs end up with about 60% to 75%. Founders and VPs usually have about 10% and employees have about 15%.

Equity 40

Equity Employee Dilution Valuation 40

Both Sides of the Table

MARCH 3, 2013

I reinforced this view by referring to a very interesting article I had read by Andy Grove (co-founder & former CEO of Intel) on car batteries, china manufacturing and the problem of US outsourcing. We talked about Liquidation Preference, Voting Rights, and all of the other valuable terms crowd-funding investors don’t understand.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

forward revenue for SaaS businesses when in the years before it had been less than 5x. Many founders don’t understand why inside rounds are so difficult. Also, new investors will be worried that the down round will cause founders or senior management to depart and no VC wants to replace management.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

One Million by One Million is a global initiative that aims to nurture a million entrepreneurs reach a million dollars each in annual revenue and beyond by 2020, thereby creating a trillion dollars in global GDP and ten million jobs. 1M/1M Program has a bold mission. This is where numerous ventures fail.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116