INDUSTRY INSIGHTS YOUR PEERS ARE READING
The term “lead investor” is often code. ” Let me know when you have a lead investor. ” You see, many angel and seed investors view it as their job to establish a “free option” on investing in your company. By telling you that they’re potentially “in” if you have a lead investor, they establish the free option to decide later. MORE
After all, aren’t seed investors (like us) by definition supposed to be the first and earliest-stage investors? Series A investors invested quite early, often before product/market fit. The proliferation of seed-stage investors. MORE
If you are a founder running a high growth, VC backed company, here are a few questions to ask your investors today. If we can’t find a new lead investor, will you write us a check? There is a cliche in the financial world that has been around forever. MORE
Lead investors leadership personal developmentI use to think that transparency was overrated — not because I didn’t want to be open, but because I didn’t believe much value could come from it. MORE
Let me explain why you should never ask anyone to be your lead investor. If they want to invest, they’re going to want to lead and will throw out a term sheet. You never have to ask them to be your “lead investor.” MORE
The Austin-based startup announced that the investment came from lead investor LiveOak Venture Partners with participation by Deep Space Ventures, RSH Ventures, Capital Factory and existing investor Keshif Ventures. Eventador announced recently the company has closed on $3.8 MORE
Is it worth paying attention to this potential “come-from-behind” VC investor? The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.” MORE
If you don’t have a mission or problem you’re passionate about, where investors are aligned on the business, and it’s still early stage, you’re better off returning the cents on the dollar. MORE
The importance of the Board is why institutional investors (like VCs) often get a seat on the Board after an investment. But don’t be fooled, there is an element of control as investors want a say in critical decisions. I have now done 2 deals where there has been a lead investor (not CVF) who did not mind the “founder as sole board member” trap. We followed in line with the lead investor and went along with the structure. MORE
Like many in the venture community, especially us newer investors, I enjoy Fred Wilson’s “process” posts, where he shares a POV on the practice of our profession. Like we do at the seed stage, USV almost always plays the role of “ lead investor.” MORE
We’ve written before on how to research partners , how to pitch the right investor at a given firm, and how to raise seed capital , generally speaking. But it’s also useful to try and understand where exactly you are in the process with a particular investor. MORE
And although this is written for angel investors, I think entrepreneurs can only benefit by increasing their knowledge around these investors and hope you’ll continue reading if that’s you. Favor investment rounds with strong leads that haven’t raised millions of dollars before you. MORE
Here are a couple tips and suggestions on how to go about creating the most supportive investor base for a typical institutional seed round. These folks don’t typically lead rounds, but would certainly invest if the right round came together. So make it easy for them to say “I’m “in” assuming you get a good lead and close at least $X to get you Y months or runway.”. So really take your time to do your due diligence on the investor (both the individual and the firm). MORE
An investor I met with got really excited about joining my round. He said he would like to join once we have a lead. Do I need a lead? What is a lead? 1) Technically speaking, you do not need a lead. Dear elizy : I’m raising my seed round right now. MORE
For example, “VC will serve as the lead investor up to $400,000; Company would source balance of the round up to $600,000 (so round size would be up to $1,000,000 in the aggregate).”. At the early stage, the founding team often has lots of “interest” lined up waiting for a lead. And it also puts the founding team to the task – VC stepped up to lead so now go and fill out the round! MORE
But today we live in a world where there is a broad spectrum of seed rounds, many startups raise more than one, “Series A” rounds can range from $3M to $20M+, and the ecosystem of early stage investors continues to evolve. MORE
Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors. This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors. MORE
One question that seed investors love to ask is if you have a lead investor in your seed round. But once you figure out why an investor is asking, tactically speaking, what do you do? Do you try to find a lead? or “We want to co-lead if you find another co-lead!” MORE
Because as an early stage lead investor one of our responsibilities is to help a company think through its strategy and provide feedback on the pace and quality of execution. Yes there’s a funding process and helping founders navigate that successfully is a key part of a venture investor’s value, but a CEO shouldn’t rely on “failing to execute but successfully raising” (even though this happens too). 14 for 14. MORE
Most of these rhyme with what we’ve said in the past, but some have also evolved to fit the changing landscape and our own convictions about what really matters for founders and their investors at the seed stage. As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. We are first and foremost pre-traction investors. Lead investors are few. MORE
This investor loved the team and thought the solution they were building was compelling. I remember talking to one of their angel investors (and also one of my old mentors) about what the company could become and what it would look like if it ever became a really big business. MORE
Active Capital, a new venture capital firm based in San Antonio and led by Pat Matthews, is the lead investor in the seed stage round of funding. Other investors include Altair. MORE
Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. 25 individual angel investors funding a startup on a convertible note. In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. A network of other investors to whom they can introduce the company. MORE
Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. Or same goes for getting a “pass” from a desirable investor in a financing round but at least understanding why and getting a key to fixing something problematic about your business model or management team. MORE
The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. Over the next six months we interacted regularly about the product and when he was ready to start fundraising, I quickly made him an offer and we became the lead investor in the round. For some reason I’ve been doing a lot of interviews lately. In many of them I get asked similar questions, including the inevitable “what makes a great entrepreneur?” MORE
Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. Furthermore, a demand for a high startup salary can signal that you don’t believe all those things in your investor pitch. A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. MORE
That being said, you want to feel like you got a good deal--and your lead investor should be able to walk you through how they got to a particular valuation and why they thought it was appropriate. Powered by OpenReel I have to be honest, I'm a little suspect when one of the first questions a founder asks me is about valuation. MORE
The Keiretsu Forum’s members gave $3 million as the lead investor on a Series B round for Savara Pharmaceuticals. “The opportunity to invest in Savara Pharmaceuticals attracted many of our accredited investors, who are deeply committed to supporting products and technologies with the [.]. Savara is developing pulmonary drugs to treat serious and life threatening conditions. MORE
In my mind, I had done everything the investors asked me to do. When my co-founders and I got the company scalable and repeatable, we hired an operating executive as the CEO and returned a billion dollars to each of our two lead investors. MORE
By searching for a lead investor in your next funding round. The lead investor is the first step in Read more >. The post How To Secure A Lead Investor appeared first on The Gust Blog. By Paula Taas, Founder Institute. MORE
Whenever a new investor showed up, they wanted – and got – a board seat.” Instead, there is no formal board, or no formalism around the board, so it’s just a free for all between the collection of early investors (angels and pre-seed/seed VCs) and the founders. Post seed boards tend to be founder and investor-centric. I get that many investors want board seats as part of their investment. I had lunch recently with a founder. MORE
The other investors include lead investor Wellington Management Company and participating investors NEA and Morgan Creek Capital […] The post TabbedOut Raises Additional $2 Million in Venture Capital appeared first on SiliconHills. TabbedOut, a mobile payments app for bars and restaurants, announced Friday it has raised $2 million more in its Series C venture round. Miami-based Aeterna Capital provided the funds. MORE
ATX Seed Ventures announced it is the lead investor in GoCo’s $2.5 Other investors included Guardian Life Insurance and Salesforce Ventures. million financing round. GoCo.io, based in Houston, is a software startup that provides an all-in-one Human Resources platform focusing on small to medium sized companies. Its founders, Nir Leibovich, Jason Wang and Michael Gugel […] The post ATX Seed Ventures Invests in GoCo’s $2.5 MORE
But I think the two best posts to come out of yesterday are Lead Investors, Dipshit Companies, and Funding Every Entrepreneur by Fred Wilson and MoneyBall for Startups by Dave McClure. Ah – well – another day passed and there was once again a ton of chatter around angel investing. A lot of it was prompted by AngelConf 2010 which you can watch recordings of on Justin.tv ( AngelConf 2010 Part 1 and AngelConf 2010 Part 2 ). MORE
This post will try to describe why this is happening and what repercussions are for founders and investors. Today, most series A’s are led primarily by one fund that makes up the majority of the round, and there is fierce competition for that lead slot. Repercussions for Investors. MORE
The Austin-based startup received the funds from lead investor Austin Ventures and other investors. Edgecase, which provides data and analytics for e-commerce sites, announced this week it has received $7.5 million in venture capital. The company plans to use the money for research and development and sales and marketing. To date, the company, founded in […] The post Edgecase Gets $7.5 Million in Venture Capital appeared first on SiliconHills. Austin MORE
Sharing these pricing expectations early with potential lead investors fundamentally qualifies your conversations, but it also runs the risk of prematurely losing a potential financing partner, or else it can reduce options to maximize your fundraise outcome. MORE
Whilst exact details remain unclear, Tech City declared that companies on the program have access to a team of leading investors, accounting firms and business leaders for ongoing advice and support. . MORE
Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. MORE
In unusual (but not unique) cases, a well-respected or high-profile individual angel may be able to successfully lead the first professional funding round of an early-stage startup with a very small investment, accounting for only a small percentage of the round. Invested Interests Angels funding investor series a MORE
Yet they tend to ignore this problem, and move on quickly to professional investors. They don’t realize that most Angel investors and venture capitalists will also decline to be first, if you have no commitment from friends and family. MORE
Lead Investor Related Topics Gust
SEPTEMBER 2, 2015
By searching for a lead investor in your next funding round. The lead investor is the first step in Read more >. The post How To Secure A Lead Investor appeared first on The Gust Blog. By Paula Taas, Founder Institute.
David Cohen
MARCH 18, 2019
Let me explain why you should never ask anyone to be your lead investor. If they want to invest, they’re going to want to lead and will throw out a term sheet. You never have to ask them to be your “lead investor.”
Genuine VC
JANUARY 15, 2015
Is it worth paying attention to this potential “come-from-behind” VC investor? The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.”
David Cohen
JUNE 8, 2016
The term “lead investor” is often code. ” Let me know when you have a lead investor. ” You see, many angel and seed investors view it as their job to establish a “free option” on investing in your company. By telling you that they’re potentially “in” if you have a lead investor, they establish the free option to decide later.
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Hippoland
AUGUST 9, 2016
One question that seed investors love to ask is if you have a lead investor in your seed round. But once you figure out why an investor is asking, tactically speaking, what do you do? Do you try to find a lead? or “We want to co-lead if you find another co-lead!”
Gust
NOVEMBER 16, 2013
In unusual (but not unique) cases, a well-respected or high-profile individual angel may be able to successfully lead the first professional funding round of an early-stage startup with a very small investment, accounting for only a small percentage of the round. Invested Interests Angels funding investor series a
SiliconHills
APRIL 30, 2019
Active Capital, a new venture capital firm based in San Antonio and led by Pat Matthews, is the lead investor in the seed stage round of funding. Other investors include Altair.
View from Seed
MAY 29, 2019
This post will try to describe why this is happening and what repercussions are for founders and investors. Today, most series A’s are led primarily by one fund that makes up the majority of the round, and there is fierce competition for that lead slot. Repercussions for Investors.
View from Seed
JUNE 11, 2019
Here are a couple tips and suggestions on how to go about creating the most supportive investor base for a typical institutional seed round. These folks don’t typically lead rounds, but would certainly invest if the right round came together. So make it easy for them to say “I’m “in” assuming you get a good lead and close at least $X to get you Y months or runway.”. So really take your time to do your due diligence on the investor (both the individual and the firm).
View from Seed
SEPTEMBER 4, 2018
Most of these rhyme with what we’ve said in the past, but some have also evolved to fit the changing landscape and our own convictions about what really matters for founders and their investors at the seed stage. As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. We are first and foremost pre-traction investors. Lead investors are few.
SiliconHills
JUNE 19, 2018
The Austin-based startup announced that the investment came from lead investor LiveOak Venture Partners with participation by Deep Space Ventures, RSH Ventures, Capital Factory and existing investor Keshif Ventures. Eventador announced recently the company has closed on $3.8
Gust
AUGUST 6, 2014
Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. 25 individual angel investors funding a startup on a convertible note. In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. A network of other investors to whom they can introduce the company.
Feld Thoughts
OCTOBER 11, 2015
If you are a founder running a high growth, VC backed company, here are a few questions to ask your investors today. If we can’t find a new lead investor, will you write us a check? There is a cliche in the financial world that has been around forever.
SiliconHills
OCTOBER 30, 2015
The Austin-based startup received the funds from lead investor Austin Ventures and other investors. Edgecase, which provides data and analytics for e-commerce sites, announced this week it has received $7.5 million in venture capital. The company plans to use the money for research and development and sales and marketing. To date, the company, founded in […] The post Edgecase Gets $7.5 Million in Venture Capital appeared first on SiliconHills. Austin
OnlyOnce
JULY 26, 2018
Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table.
Hunter Walker
NOVEMBER 21, 2018
If you don’t have a mission or problem you’re passionate about, where investors are aligned on the business, and it’s still early stage, you’re better off returning the cents on the dollar.
Hunter Walker
JUNE 14, 2019
Because as an early stage lead investor one of our responsibilities is to help a company think through its strategy and provide feedback on the pace and quality of execution. Yes there’s a funding process and helping founders navigate that successfully is a key part of a venture investor’s value, but a CEO shouldn’t rely on “failing to execute but successfully raising” (even though this happens too). 14 for 14.
View from Seed
AUGUST 12, 2015
This investor loved the team and thought the solution they were building was compelling. I remember talking to one of their angel investors (and also one of my old mentors) about what the company could become and what it would look like if it ever became a really big business.
View from Seed
DECEMBER 6, 2018
But today we live in a world where there is a broad spectrum of seed rounds, many startups raise more than one, “Series A” rounds can range from $3M to $20M+, and the ecosystem of early stage investors continues to evolve.
Hippoland
JUNE 4, 2015
An investor I met with got really excited about joining my round. He said he would like to join once we have a lead. Do I need a lead? What is a lead? 1) Technically speaking, you do not need a lead. Dear elizy : I’m raising my seed round right now.
The Next Web
JUNE 6, 2014
Whilst exact details remain unclear, Tech City declared that companies on the program have access to a team of leading investors, accounting firms and business leaders for ongoing advice and support. .
SiliconHills
JANUARY 31, 2017
ATX Seed Ventures announced it is the lead investor in GoCo’s $2.5 Other investors included Guardian Life Insurance and Salesforce Ventures. million financing round. GoCo.io, based in Houston, is a software startup that provides an all-in-one Human Resources platform focusing on small to medium sized companies. Its founders, Nir Leibovich, Jason Wang and Michael Gugel […] The post ATX Seed Ventures Invests in GoCo’s $2.5
Feld Thoughts
JULY 30, 2010
But I think the two best posts to come out of yesterday are Lead Investors, Dipshit Companies, and Funding Every Entrepreneur by Fred Wilson and MoneyBall for Startups by Dave McClure. Ah – well – another day passed and there was once again a ton of chatter around angel investing. A lot of it was prompted by AngelConf 2010 which you can watch recordings of on Justin.tv ( AngelConf 2010 Part 1 and AngelConf 2010 Part 2 ).
View from Seed
OCTOBER 22, 2015
We’ve written before on how to research partners , how to pitch the right investor at a given firm, and how to raise seed capital , generally speaking. But it’s also useful to try and understand where exactly you are in the process with a particular investor.
OnlyOnce
JULY 26, 2018
Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. Or same goes for getting a “pass” from a desirable investor in a financing round but at least understanding why and getting a key to fixing something problematic about your business model or management team.
Feld Thoughts
DECEMBER 15, 2016
Whenever a new investor showed up, they wanted – and got – a board seat.” Instead, there is no formal board, or no formalism around the board, so it’s just a free for all between the collection of early investors (angels and pre-seed/seed VCs) and the founders. Post seed boards tend to be founder and investor-centric. I get that many investors want board seats as part of their investment. I had lunch recently with a founder.
This is going to be BIG.
JANUARY 1, 2018
That being said, you want to feel like you got a good deal--and your lead investor should be able to walk you through how they got to a particular valuation and why they thought it was appropriate. Powered by OpenReel I have to be honest, I'm a little suspect when one of the first questions a founder asks me is about valuation.
SiliconHills
DECEMBER 11, 2015
The other investors include lead investor Wellington Management Company and participating investors NEA and Morgan Creek Capital […] The post TabbedOut Raises Additional $2 Million in Venture Capital appeared first on SiliconHills. TabbedOut, a mobile payments app for bars and restaurants, announced Friday it has raised $2 million more in its Series C venture round. Miami-based Aeterna Capital provided the funds.
View from Seed
AUGUST 26, 2015
And although this is written for angel investors, I think entrepreneurs can only benefit by increasing their knowledge around these investors and hope you’ll continue reading if that’s you. Favor investment rounds with strong leads that haven’t raised millions of dollars before you.
ithacaVC
MARCH 9, 2017
The importance of the Board is why institutional investors (like VCs) often get a seat on the Board after an investment. But don’t be fooled, there is an element of control as investors want a say in critical decisions. I have now done 2 deals where there has been a lead investor (not CVF) who did not mind the “founder as sole board member” trap. We followed in line with the lead investor and went along with the structure.
Feld Thoughts
AUGUST 2, 2010
Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors. This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors.
View from Seed
OCTOBER 21, 2014
Sharing these pricing expectations early with potential lead investors fundamentally qualifies your conversations, but it also runs the risk of prematurely losing a potential financing partner, or else it can reduce options to maximize your fundraise outcome.
ithacaVC
FEBRUARY 27, 2014
For example, “VC will serve as the lead investor up to $400,000; Company would source balance of the round up to $600,000 (so round size would be up to $1,000,000 in the aggregate).”. At the early stage, the founding team often has lots of “interest” lined up waiting for a lead. And it also puts the founding team to the task – VC stepped up to lead so now go and fill out the round!
The Startup Lawyer
JUNE 9, 2010
Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. Furthermore, a demand for a high startup salary can signal that you don’t believe all those things in your investor pitch. A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders.
View from Seed
JANUARY 26, 2016
After all, aren’t seed investors (like us) by definition supposed to be the first and earliest-stage investors? Series A investors invested quite early, often before product/market fit. The proliferation of seed-stage investors.
Steve Blank
FEBRUARY 26, 2013
In my mind, I had done everything the investors asked me to do. When my co-founders and I got the company scalable and repeatable, we hired an operating executive as the CEO and returned a billion dollars to each of our two lead investors.
Startup Professionals Musings
AUGUST 29, 2016
Yet they tend to ignore this problem, and move on quickly to professional investors. They don’t realize that most Angel investors and venture capitalists will also decline to be first, if you have no commitment from friends and family.
Feld Thoughts
MAY 3, 2010
The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. Over the next six months we interacted regularly about the product and when he was ready to start fundraising, I quickly made him an offer and we became the lead investor in the round. For some reason I’ve been doing a lot of interviews lately. In many of them I get asked similar questions, including the inevitable “what makes a great entrepreneur?”
Hunter Walker
APRIL 20, 2018
Like many in the venture community, especially us newer investors, I enjoy Fred Wilson’s “process” posts, where he shares a POV on the practice of our profession. Like we do at the seed stage, USV almost always plays the role of “ lead investor.”
SiliconHills
JULY 18, 2012
The Keiretsu Forum’s members gave $3 million as the lead investor on a Series B round for Savara Pharmaceuticals. “The opportunity to invest in Savara Pharmaceuticals attracted many of our accredited investors, who are deeply committed to supporting products and technologies with the [.]. Savara is developing pulmonary drugs to treat serious and life threatening conditions.
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