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What Do LPs Think of the Venture Capital Markets for 2016?

Both Sides of the Table

At the Upfront Summit in early February, we had a chance to have many off-the-record conversations with Limited Partners (LPs) who fund Venture Capital (VC) funds about their views of the market. LPs Still Believe Strongly in Venture Capital as a Diverse Source of Returns. The data itself bears out some of these fears.

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Praying to the God of Valuation

Both Sides of the Table

Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. How might our next phase of the journey seem brighter, even with more uncertain days for startups and capital markets? What happened? The tide has gone out.

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Bad Notes on Venture Capital

Both Sides of the Table

On the phone … Me: So, you raised venture capital? They raised $2 million but when you add up all of the liquidation preferences if they convert at our proposed share price the total liquidation preferences would equal more than $7 million. We raised a seed round. About $1 million. Me: At what price?

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Term Sheet Overview : The second most important economic term in the term sheet other than price is “liquidation preference.&# 4 * $4 million) and not $4 million.

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More on Liquidation Preferences

Altgate

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Pre-Money Valuation vs Number of Founders Where Do Tech VCs Invest? One of the least understood of these key terms is the liquidation preference. For example, rounds with a preference between 1.1X

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Want to Raise Venture Capital More Easily? Clean Up Your Own Shite First

Both Sides of the Table

If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. That means that the likely have a minimum of $15 million in liquidation preferences.

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6 Obligations That Come With Startup External Funding

Startup Professionals Musings

If the entrepreneur wants total control of their own venture, with no one looking over their shoulder, they should work within the limits of their own resources, a process called bootstrapping.