Startup Professionals Musings

JANUARY 27, 2012

Liquidation preference. You can end up becoming very frustrated with the investors, or cause the venture to fail if you run out of seed capital before the angel round can be completed. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party.

Term Sheet 223

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

Startup Professionals Musings

SEPTEMBER 14, 2010

Liquidation preference. You can end up becoming very frustrated with the investors, or cause the venture to fail if you run out of seed capital before the angel round can be completed. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party.

Term Sheet 227

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

Gust

OCTOBER 17, 2011

Liquidation preference. You can end up becoming very frustrated with the investors, or cause the venture to fail if you run out of seed capital before the angel round can be completed. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party.

Term Sheet 158

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

K9 Ventures

JUNE 5, 2015

Another thing I noticed was that I was now referring companies that I had invested in at a “pre-seed” (capitalization intentional) stage over to folks who would previously be considered my peer venture funds doing Seed-stage investments. Worst case they get their money back, best case they hit a home run.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Growthink Blog

MAY 23, 2011

With this seed capital – more often than not totaling between $100,000 and $1,000,000 - the company accomplishes a number of key technical milestones, gets a beta customer or two, and then goes on a "road show" to venture capitalists around the country for capital to “scale” the business.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Feld Thoughts

JULY 14, 2015

It usually happens in a later round, when the company is in fact worth much less than the liquidation preference overhang and insiders use a pay-to-play and a low valuation to reset the preferences and the cap table. and the investors, who put up $1m in a convertible note, get 0.1%. Sure – it happens.

Recapitalization 70

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