Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. Last week ZipCar began trading and has a market cap of about $1 billion. How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). 15 years ago we were at the peak of Internet hype with the launch of many over-capitalized businesses with a market size & opportunity was limited. The VC market has right-sized (returned back to mid 90′s levels & less competition). Where are we today?

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

SoCal CTO

FEBRUARY 2, 2011

Bill Payne is an expert on how early-stage investors should look at valuation. He just post: Establishing the Pre-money Valuation of Pre-revenue Startups. Especially interesting is the Valuation Worksheet towards the end. Size of target market $100M is okay. It's required reading.

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

Startup Professionals Musings

NOVEMBER 26, 2012

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. How much is NewCo worth to investors at this point (pre-money valuation)? All principals and employees add value. NewCo doesn’t have any of these yet.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

YoungUpstarts

SEPTEMBER 15, 2018

Startup valuation, under no circumstances, can be described as a simple affair. While valuing a publicly traded company is more or less straightforward, the case with a rarely profit making startup is not quite the same. Here are several factors that are taken into account while these startups are evaluated.

Pre-Money Valuation 124

Pre-Money Valuation Valuation Sweat Equity Startup 124

Lightspeed Venture Partners

OCTOBER 29, 2012

The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. Unsurprisingly, all the sharks passed, based on market size and valuation expectations. They did not have any meaningful proof of product-market fit. This is a very niche market.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

Both Sides of the Table

JUNE 22, 2011

They have seen one side of a market where many of us have seen the ebb and flow multiple times. Still, market amnesia by ordinarily rational actors always surprises me. I believe a bubble occurs when a market is willing to pay greater than intrinsic value for an asset class. I spoke about a lot of things during the keynote.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. It’s like trying to sell a home still being built at next year’s dream market price. First priority is real revenue, customers and contracts.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Startup Professionals Musings

SEPTEMBER 6, 2010

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage blogs and other resources, and maybe even pay themselves a salary. How much is NewCo worth to investors at this point (pre-money valuation)? All principals and employees add value.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. How much is NewCo worth to investors at this point (pre-money valuation)? All principals and employees add value. NewCo doesn’t have any of these yet.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

JULY 23, 2014

You’ll need to have invested significant cash (whatever that term means to you) in your own company, and you’ll need to have the core of your team in place (typically a techie and a marketer, at a minimum.) Invested Interests Power Pitches angel investor business David Rose entrepreneur meeting pitch startup'

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

Startup Professionals Musings

SEPTEMBER 30, 2011

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. How much is NewCo worth to investors at this point (pre-money valuation)? All principals and employees add value. NewCo doesn’t have any of these yet.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

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. pre money valuation and planned to use the money to market the app.

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

ReadWriteStart

OCTOBER 7, 2010

So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. Photo by lco.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

JULY 27, 2014

We both are concerned about non-traditional capital entering the late stages and the impact that may have in the next downturn in the economy to the startups who merely trying to optimize for short-term valuation maximization. Most of those industries are fee-based and are competing on revenue growth. Startup Lessons'

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Bottom Up Market Sizing » January 12, 2010. Term-sheets and Valuations: Thinking about Negotiations.   Most often, investors who are interested in a company raise this issue first to measure the company’s response to a market value offer. times at 5 years and 11.39

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Agile VC

MAY 26, 2011

AGILEVC My idle thoughts on tech startups. The market size for online advertising, e-commerce, and web premium services are 1/10th to 1/3rd the size they are today. To give you a sense, for 2002 the entire US online ad market was $6B and had shrunk year over year (it was $25B+ for 2010). How to Evaluate Firms for a Seed VC.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? You need three things to create a successful startup: to start withgood people, to make something customers actually want, and to spendas little money as possible. Most startups that fail do it becausethey fail at one of these. Most startups that fail do it becausethey fail at one of these.

Startup 105

Startup Cofounder Software Stock 105

The Startup Magazine

SEPTEMBER 12, 2019

Most startups view venture capital funding as a blessing from above — eager to take it as soon as they can get it. Tempted by large sums of money and the perceived validation that comes along with being funded, founders turn to venture capitalists to accelerate their company’s growth. This is often the case when it comes to VC funding.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. The right number to focus on is pre money valuation as that is how an investor is valuing the company before the investment. Post money valuation = Pre money valuation + Investment.

Pre-Money Valuation 164

Pre-Money Valuation Post-Money Valuation Valuation Dilution 164

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. They won a design award at a trade show, but have no revenue and no orders. So the entrepreneur was willing to accept a valuation more than $10M lower than a previous valuation.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. Once you take money from the generalpublic youre more restricted in what you can do. [

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. I believe that some of these seed rounds are way too large, and there’s a looming market correction on the horizon for everyone. And companies typically have $2m-$3m revenue runrate at this point.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

Lightspeed Venture Partners

OCTOBER 22, 2012

The company has gotten off to a fast start, $150k in revenue in the first two months, with all the marketing coming from social media. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). Freaker USA. and costs $1.10

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 Diversification across industry sectors is not as easily achieved for angels as could be accomplished in public markets, but can be achieved by co-investing with trusted angel colleagues in a broader set of businesses.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. The company came back and offered him 20% of the company for the $200k (an $800k pre money valuation). There is a lot of momentum in startups.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. I believe that some of these seed rounds are way too large, and there’s a looming market correction on the horizon for everyone. And companies typically have $2m-$3m revenue runrate at this point.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

Berkonomics

NOVEMBER 4, 2016

There is a universal truth: fewer than one in a thousand start-ups meet or exceed their projected revenues in the periods planned. So how do you use financial projections as valuation metrics when you know the odds of those being accurate predictors of the future are so very unreliable? But a lot of time has passed since then.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Both Sides of the Table

APRIL 14, 2010

Most people don’t want to go through the brain damage to convince seller one that the market has changed. Tags: Entrepreneur Advice Raising Venture Capital Start-up Advice Startup Advice. Another is slightly worse but priced at $700k and was bought in 2007 for $1 million. So you don’t bother. Buy the second home.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

www.currentlyobsessed.com

MAY 28, 2010

In one particular negotiation, we went from one valuation to a much higher valuation (like double) in the course of a single day and two phone calls, simply by discussing the “what if&# scenario about increasing the total amount raised. Read more about deal math on Brad Feld’s blog.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

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

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. We had people hearing through the grapevine that we were about to raise money and new investors started calling us to get in on the deal. If you remember your history the market crashed the next week. Many companies that were in the process of raising money did not.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

dondodge.typepad.com

JANUARY 15, 2011

So they will give you a pre-money valuation somewhere around the amount you raise. Sounds strange, but it usually works out that if you are raising $2M the VCs will value your company at $2M pre-money, and $4M post money so they end up with 50% of the stock. Every situation is different.

Equity 40

Equity Employee Dilution Valuation 40