Both Sides of the Table

MARCH 1, 2016

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 See The Over-Valuations and Don’t Like It. That’s money that fuels our startup ecosystems.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Steve Blank

SEPTEMBER 5, 2018

Reading the NY Times article “ Jeffrey Katzenberg Raises $1 Billion for Short-Form Video Venture, ” I realized it was time for a new startup heuristic: the amount of customer discovery and product-market fit you need to find is inversely proportional to the amount and availability of risk capital. ” Fire, Ready, Aim. IPOs dried up.

Lean 335

Lean Burn Rate Startup IPO 335

SoCal CTO

SEPTEMBER 27, 2011

Paul Graham provides what is roughly the core formula for equity at any point in The Equity Equation : You can use the same formula when giving stock to employees, but it works in the other direction. If the company's valuation is $2 million, $90k is 4.5%. Stock vests for 4 years. 11.1% - 4.5% = an offer of 6.6%. Wait a second.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Steve Blank

JULY 11, 2017

Before the rapid rise of Unicorns, (startups with a valuation over a billion dollars), when boards were still in control, they “encouraged” the hiring of “adult supervision” of the founders after they found product/market fit. It was so compelling, everyone worked extremely long hours, for little pay and some stock. Postscript.

Part-Time VPE 308

Part-Time VPE Liquidity Event Stock Engineer 308

The Startup Magazine

MARCH 14, 2022

Advertising and marketing tech. Here the company looks to grow and strives to create a dominant position in the market. Here, the company’s valuation benchmark is set, and funding is solicited accordingly. Indian startups have excelled in various segments and industries. Education tech. Financial tech. Retail tech.

Technical Review 143

Technical Review Due Diligence India Startup 143

VC Cafe

FEBRUARY 27, 2023

Taking stock of the venture capital market in 2023, it’s clear to see that we’re in a transition point. In today’s market, I believe small is beautiful, and that specialisation matters. Seed and pre-Seed investment levels and valuations remain healthy, there’s more talent in the market and less competition.

Venture Capital 215

Venture Capital Technical Review LP Institutional Investors 215

Steve Blank

JUNE 27, 2017

Initially, a startup has no business model and no market share to defend. But often the legal obstacles confronting startups have been put in place by companies that look to the government and regulators as their first line of defense against new market entrants. Startups can do anything. to stifle competition.).

Startup 275

Startup New York City Valuation Distribution 275

ReadWriteStart

JUNE 1, 2020

The next reason is to establish a competitive advantage over your competition and quickly acquire a substantial market share. Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. The shares given out can either be common stocks or preferred stocks. ? Debt investment.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

AUGUST 24, 2015

If you didn’t notice that the stock markets in the US dropped nearly 4% today (after falling last Thursday and Friday) then you were probably completely off-the-grid and on vacation. And by this I assume he meant that “market prognosticator twitter” was vomitous. It was a nerve racking morning. Neither do I.

Stock 150

Stock Finance Marketing Valuation 150

This is going to be BIG.

MAY 9, 2022

I’ve been asked by portfolio companies and plenty of others about how they should be changing their strategy given the stock market pullback and what they’ve been hearing on “VC twitter”. Ok, so if you’re a fundable company, you’re a fundable company—great big market, relevant team, solid plan. The incentive is too strong.

Stock 97

Stock Marketing Valuation Later Stage 97

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Professionals Musings

MARCH 23, 2014

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

YoungUpstarts

JANUARY 10, 2018

by Ryan Gould, Vice President of Strategy and Marketing Services at Elevation Marketing. How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? First up is the size of the customer base itself, especially in relation to the size of the market.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Both Sides of the Table

SEPTEMBER 10, 2021

With the enormous changes to our economies and financial markets?—?how how on Earth could the venture capital market stand still? One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

VC Adventure

AUGUST 15, 2018

As is true today, there was a requirement that options be priced at or above the “fair market value” of the underlying stock (otherwise there would be tax consequences to the optionee and sometimes to the company as well). Over night a cottage industry was created to conduct these valuations.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Tim Keane

JANUARY 12, 2010

Bottom Up Market Sizing » January 12, 2010. Term-sheets and Valuations: Thinking about Negotiations. The Valuation Question. When companies seeking their first round of serious funding are good enough to receive a term-sheet from an investor, the first issue that always arises is valuation.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Austin Startup

MARCH 22, 2021

In recent years we’ve seen mega-rounds of investment and sky-high valuations. billion Series D round giving the company a valuation of about $14 billion!* They’ve usually been around for a few years and have established themselves as market leaders. Purchasing a hotel, employing staff, stocking mini-bars etc.

Software Review 100

Software Review San Francisco Valuation Stock 100

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Agile VC

SEPTEMBER 15, 2011

Startup IPO Market: A Fickle Mistress. The IPO market, she is a fickle mistress. In the first half of 2011, the IPO markets were looking strong for VC-backed companies. But if you read the whole article you glean more insight… the entire public equity markets have sunk in the last 3-4 months. September 15, 2011.

IPO 100

IPO Marketing Silicon Valley Technical Review 100

Transformify

MARCH 4, 2020

The stock price of Wirecard plunged almost immediately and it took sufficient time to recover. I’ve been analyzing Wirecard for about 10 years and comparing its performance to other market players like Adyen, Worldpay, Skrill, etc. Why is the market so sensitive to controversial information? Neither did I.

Technical Review 78

Technical Review Valuation Stock Acquisition 78

View from Seed

SEPTEMBER 14, 2021

Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? So, on one hand, the market see ms like a total frenzy these days. US VC versus stocks. Source: WaitButWhy. during this time.

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

Both Sides of the Table

APRIL 21, 2020

Harry was gracious enough to invite me back so this past week we recorded an episode discussing the current market environment. Nobody will be immune because in a bull market executives are paid to “innovate” so they sign software contracts and run projects. If you’re a clear “market winner” like Stripe, Robinhood or Airbnb.

Marketing 263

Marketing Valuation Churn Rate Balance Sheet 263

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation? The timing will vary depending on the purpose.

Valuation 100

Valuation Stock Options CPA Merger 100

Both Sides of the Table

AUGUST 14, 2017

This is similar to the role that public markets play in helping shape publicly traded companies. The administrative work we actually do at board meetings? At times I’m sure it feels terrible to be a publicly traded company but ultimately I believe the sunshine of publicly reported numbers produces better results.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

SEPTEMBER 6, 2010

Options are gravy - I lived through the first dot com era where we used stock options as a recruiting tool. We set our sites on our IPO price and then worked back to our current valuation and showed potential employees what we thought they could earn (with all legal caveats) if the company was successful. We give out stock options.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Startup Professionals Musings

DECEMBER 11, 2022

Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation. Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Investors are looking to buy a chunk of the business, not the product.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

View from Seed

SEPTEMBER 14, 2021

Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? So, on one hand, the market see ms like a total frenzy these days. US VC versus stocks. Source: WaitButWhy. during this time.

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

View from Seed

MARCH 24, 2021

In this comprehensive template and guide we break down each of the nine core sections in the deck: intro , team , what do you do , is it working , why does it matter (market) , can you be the best in the world (product, growth, financial metrics) , where are you going , what do you want (the ask) , and appendix. ” (Lee Hower).

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Eligible for favorable treatment under Qualified Small Business Stock exemption, if structured as equity.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

YoungUpstarts

JUNE 26, 2020

To do that you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation. Like Mark Zuckerberg, who built a site only for college students, we are looking for a small, protected market that you as an entrepreneur, can dominate. Why does it need to be a small market?

Finance 205

Finance Silicon Valley Valuation Startup 205

A Smart Bear: Startups and Marketing for Geeks

AUGUST 18, 2015

They have everything: money, brand, momentum, existing customers, press, product teams, distribution channels, expertise, market insight, analysts, sales offices, product features, and, by definition, a working business model. This market is willing to pay far more than cost for this product (else profits wouldn’t be generated).

Technical Review 120

Technical Review Valuation Flash Revenue 120

VC Cafe

JANUARY 27, 2021

Now synonymous with video-conferencing, the company-name-turned-verb stock peaked in October 2020, a market interpretation of how the Zoom Boom has defined the daily lives of many millions throughout the COVID-19 outbreak. 2020 was a good year for Zoom. Another virtual events platform, Hopin , has hit a 2.1

Vertical 148

Vertical Video Technical Review Europe 148

Gust

MARCH 16, 2014

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

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

YoungUpstarts

MAY 7, 2015

Employee stock ownership plans (ESOPs) can be an attractive way for an owner to sell a company and for employees to gain an ownership stake. ESOPs are qualified retirement plans that buy, hold and sell company stock for the benefit of employees. more than 50% of the stock is sold to the ESOP). by Timothy L.

Stock 100

Stock Employee Private Equity Valuation 100

Steve Blank

MARCH 17, 2020

To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. This math works in a normal market…. Unfortunately, it’s no longer a normal market. If you are selling to businesses (a B-to-B market) have your customers’ sales dropped? What will my investors do?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436