The Next Web

DECEMBER 30, 2012

How to identify and engage the first customers for your product, and how to gather, evaluate and use their feedback to make your product, marketing and business model far stronger. Social media marketing for startups : How to use social to launch, position your messaging and get distribution.

Artificial Inteligence 156

Artificial Inteligence Founder Private Equity Ruby 156

Both Sides of the Table

SEPTEMBER 25, 2010

Taking it from an investor perspective (not me, angels) I think it’s totally unfair to see early angels invest, take more risk, help you get to the next level through both sweat & money, and then pay a higher price because the round had a convertible note with no cap. Markets always evolve toward higher resolution.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Both Sides of the Table

JUNE 5, 2011

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I can’t control the market. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

MAY 30, 2018

One of the hardest things about the fund-raising process for entrepreneurs is that you’re trying to raise money from people who have “asymmetric information.” VC firms see thousands of deals and have a refined sense of how the market is valuing deals because they get price signals across all of these deals. Call this “price signaling.”

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

Both Sides of the Table

OCTOBER 12, 2014

Prorata rights are one of the most important rights of a private market technology investors and yet are seldom fully understood. Because companies are raising way more capital in private markets than they ever did in the past. So the answer is: sometimes they take it, sometimes they don’t. Times won’t always be good.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

JULY 22, 2010

Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. It was accept the terms or go into bankruptcy so we took the money. Industry standard post your first round of funding will be 15-20%.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Lightspeed Venture Partners

SEPTEMBER 23, 2012

post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation. The company ended up negotiating with Cuban and settled on $300k for 30% of the company, or a $1M post money valuation.

Pre-Money Valuation 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

Both Sides of the Table

FEBRUARY 15, 2016

It’s a very personal topic and I’d like to offer you a framework to decide for yourself, based on the following factors: How Long is it Taking to Raise Capital at Your Stage in the Market? Go hard and hope that the market will validate your innovation even if the price may be higher than the market may want to bear.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Steve Blank

JULY 19, 2011

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

Post-Money Valuation 250

Post-Money Valuation Venture Capital Valuation IPO 250

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). In June of 2000, I raised money at an $820M post-money valuation.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Gust

JUNE 21, 2014

Therefore, if the maximum market cap we can hope for from a company is $2 million at the end of the day, and our investment needs to return 30x, that means the post-money valuation after our investment needs to be $2m ÷ 30, or $66,666.

Angel Investor 127

Angel Investor Post-Money Valuation Valuation Time Value of Money 127

Both Sides of the Table

JULY 25, 2010

No cookies for guessing which reason they use to market to us. The key to this strategy is getting 5 people who form the social proof to help you get a bigger angel round done at a higher valuation by tons of industry insiders and thus offering the social proof you need attract great employees and ultimately venture capital investors.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Lightspeed Venture Partners

OCTOBER 7, 2012

This isn’t a company yet, it’s an idea, and the founder could do a lot more on his own to validate product-market fit before raising capital. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. They were right to do so.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Agile VC

APRIL 17, 2011

Last week ZipCar began trading and has a market cap of about $1 billion. Only 7% of the search queries are performed by users referred by search engines, meaning Kayak’s brand is very strong and they continue to build it ($39M spent in 2010 on brand advertising, nearly $92M in total marketing spend). Quinstreet priced at $15.00/sh

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). In June of 2000, I raised money at an $820M post-money valuation.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

www.mint.com

MARCH 9, 2010

What is the post-money valuation of your last round? Post-money valuation” is the value of the company after the last round of money was put in (again, lines of credit and promises don’t count). Assume that you have $0 for marketing, how would you market the product?

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

View from Seed

JANUARY 11, 2017

It seems obvious but strategic investment only makes sense when that corporate VC is providing technology, market access, or other aid that cannot be obtained through a simple business relationship or from a startup’s other investors or advisors.

Strategic Investors 120

Strategic Investors Post-Money Valuation Seed Stage Cofounder 120

Both Sides of the Table

SEPTEMBER 18, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. Cashflow projections? I’m not sure. Him: Not so good.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

betashop.com

OCTOBER 8, 2012

A huge untapped market opportunity.?. 1 year later we sat down and had an honest conversation with ourselves and realized that our One Thing, the thing we were most passionate about, that we could realistically be the best in the world at, and that was a huge untapped market opportunity was: Design. 500M valuation = $5B target.

Technical Review 108

Technical Review Technology Software Review Valuation 108

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million. in seed money instead of $1.5M Why not raise $2.5M

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

VC Adventure

NOVEMBER 14, 2012

I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by investors who, despite higher frothy valuations, are looking to hit certain ownership thresholds. Ultimately this takes advantage of the larger raise.

Balance Sheet 77

Balance Sheet Valuation Post-Money Valuation Early Stage 77

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. It’s hard to launch a new event in today’s crowded market for attention, but Afore did a great job getting folks together and let the crowd drive the conversation.

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Both Sides of the Table

AUGUST 1, 2010

The fact that I invest less just means the company is earlier stage and needed/wanted less or without a product/market fit we weren’t yet prepared to invest more heavily. The product ships a bit more slowly, hiring takes a bit longer than anticipated, product/market fit isn’t achieved with the first product release, etc.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Both Sides of the Table

NOVEMBER 4, 2009

If you’re thinking about joining as the director of marketing, product management manager, senior architect, international business development lead, etc. at a startup that has already raised $5 million the chances of you making your retirement money on that company is EXTREMELY small. Let’s face it.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Lightspeed Venture Partners

SEPTEMBER 21, 2013

Josh Brooks, who ran marketing for MySpace for three years, is the founder of a company that lets users take photos form their phones, and then use those photos to send postcards in the real world to their friends and family. to fund the company at a $6M post money valuation from a number of investors including Selena Gomez.

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

VC Adventure

NOVEMBER 14, 2012

I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by investors who, despite higher frothy valuations, are looking to hit certain ownership thresholds. Ultimately this takes advantage of the larger raise.

Balance Sheet 48

Balance Sheet Valuation Post-Money Valuation Early Stage 48

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. Go read it now – I’ll wait.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Lightspeed Venture Partners

NOVEMBER 12, 2012

He thought that a toy company would have the resources to bring something like this to market at scale and would pay a 7-10% royalty. He did not talk about any product features that actually focused on his baby boomer target market. And his business is taking on a very crowded market that has been around for a long time.

Valuation 99

Valuation Post-Money Valuation Viral Algorithm 99

betashop.com

OCTOBER 8, 2012

Try to ride an existing wave vs. creating your own market. ” This is someone who has done it before — raised money, done deals, worked with startups. That means if you’re taking money with a $5M post-money valuation, the expectation is that you are building for a minimum $50M exit. $10M

Post-Money Valuation 92

Post-Money Valuation Valuation Dilution Advisory Board 92

This is going to be BIG.

MARCH 28, 2021

Consider the first money you ever take from VCs. You go back and forth on a price and you eventually settle on a post-money valuation cap of $6.5mm, meaning you have sold about 23% of your company. Well, what if I actually started looking at your net worth on paper given those valuations? million from investors.

Founder 133

Founder Post-Money Valuation Dilution Valuation 133

Gust

SEPTEMBER 17, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. Cashflow projections? I’m not sure. Him: Not so good.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Lightspeed Venture Partners

OCTOBER 1, 2012

Cuban passed because he noted that despite the entrepreneur being the innovator and first to market, she had been unable to outcompete the followers. Barbara passed on market size. But if the company is sold for less than their post money valuation, they would prefer to get their money back.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Seeing Both Sides

JULY 15, 2009

Most VCs invest in companies that need to hire additional management team members and sales and marketing and technical talent to build the business. The “promote”, as we have called it, is the founding team’s ownership percentage multiplied by the post-money valuation. In other words, they have a $4.4

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Seeing Both Sides

JANUARY 11, 2011

With big tech companies awash in cash , nearly every analyst out there is predicting that the M&A market will heat up in 2011. Yet a strong M&A market won't be a panacea for all. But the Series C investor who just invested at an $80 million post-money valuation would be bitterly disappointed.

Post-Money Valuation 40

Post-Money Valuation Dilution Cofounder Valuation 40

Rob Go

MAY 20, 2014

As seed rounds have become much more common, it’s been said that the “seed is the new series A” This is sort of true – it used to be that Series A’s would often happen pre-product, and certainly before product-market fit. There are broadly three buckets of series A’s, and therefore, three valuation buckets.

Valuation 76

Valuation Dilution Post-Money Valuation Syndicate 76

Professor VC

FEBRUARY 12, 2015

For example, Uber ( not a startup but someone should let TechCrunch know ) is private and has a valuation greater than 70% of the Fortune 500. Back in the day, tech companies typically went public at market caps in $100 - $250M range. or a market cap of $800M. Late private and early public investors were richly rewarded.

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

www.paulgraham.com

APRIL 28, 2010

2 ] When you negotiate terms with a startup, there are two numbers youcare about: how much money youre putting in, and the valuation ofthe company. The valuation determines how much stock you get. Ifyou put $50,000 into a company at a pre-money valuation of $1million, then the post-money valuation is $1.05

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63