Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. But it is also a topic that many find esoteric and difficult to grasp.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. Post-money valuation probably no higher than $12M (2). Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Pre-money valuation was approx. Pre-money valuation was approx. Pre-money valuation was at least $250M (2).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? August 2010 Two years ago I wrote about what I called " a huge, unexploitedopportunity in startup funding :" the growing disconnect betweenVCs, whose current business model requires them to invest largeamounts, and a large class of startups that need less than theyused to. Get funded by Y Combinator.

Startup 93

Startup Valuation Non-Compete Deal Flow 93

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Speed is often of the essence early on in the startup lifecycle, and that often means rushing into casual arrangements.

Equity 116

Equity Stock Options Vesting Stock 116

David Teten

DECEMBER 3, 2019

See Bessemer Venture Partners’ A comprehensive guide to security for startups. Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. For more on gathering data and using it to assess companies, see How to Assess Startups Using Machine Learning. 2) Market . 7) Negotiate

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

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. 1 ] A startups life will be more complicated, legally, if any of theinvestors arent accredited.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. In the old days VCs funded off of a “pre-money” valuation. How much is in the option pool? I can boil it down to how this tension plays out. Why do investors care about this?

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. As Steve Blank explained earlier this week on ReadWriteStart from research at The Startup Genome Project : One of the biggest surprises is that success isn't about size of team or funding.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

ithacaVC

JANUARY 24, 2013

One interesting point that comes up a lot is how to factor the convertible debt into the premoney valuation of the Series A round. Option pool: 500,000 shares (some issued, some reserved, but that is typically irrelevant as the whole pool is normally factored into the premoney share price calculation).

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. Percent of the outstanding option pool: meaningless. Strike price of options: meaningless. Are there principles that you live by that you’ve implemented in your startup that have worked really well? Marketing Intern. Office Space. Five years?

Equity 62

Equity Employee Founder CTO Hire 62

Gust

AUGUST 30, 2012

Integrity, Passion, Startup Experience, Domain Expertise, Functional Skills, Leadership, Commitment, Vision, Pragmatism, Flexibility, Personality. Characteristics of the Entrepreneur. Characteristics of the Venture.

Founder Vesting 144

Founder Vesting Option Pool Exit Strategy Vesting 144

The Startup Lawyer

FEBRUARY 4, 2011

Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Pre-money valuations startups receive from incubators are typically low…really low.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. How to pump up your VC valuation. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. Option Pool.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Austin Startup

JANUARY 25, 2020

Austin, TX Fast forward 4 years later, here I am working for a startup at the South By South West Tech & Music festival in Austin, TX. SXSW brings a huge chunk of the music and tech world together in one city every year in March, and most startups launch their products there every year. How did I get the gig?

Delaware 62

Delaware SEC New York City New York 62

Early Growth Financial Services

JUNE 26, 2014

Baze, Partner at Partech Ventures, Carlos Diaz, CEO at Kwarter, and EGFS’ Chief Strategy Officer Glenn McCrae covered raising funds, how-to pitch VCs, and potential sticking points around valuation. Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

Both Sides of the Table

NOVEMBER 4, 2009

This is part of my Startup Advice series. at a startup that has already raised $5 million the chances of you making your retirement money on that company is EXTREMELY small. So a friend recently called to ask for advice on becoming the CTO of a startup. If it doesn’t you’ll have done 3 startups by 26.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

www.readwriteweb.com

DECEMBER 29, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Earlier this week on ReadWriteStart, Steve Blank used research at The Startup Genome Project and explained: One of the biggest surprises is that success isn't about size of team or funding.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Business Plan Blog

NOVEMBER 20, 2013

When it comes to the division of equity in startup, there is a similar process every entrepreneur must follow beginning with raising the first round of startup funding and, if you’re lucky, finishing at the point of IPO. You have looked at the advantages and disadvantages, and have decided it is the best option for your startup.

Equity 61

Equity Option Pool Cofounder Vesting 61

The Startup Lawyer

JANUARY 10, 2011

Both sets of advice tend to ignore the gap between an investor’s expression of investment interest and your startup’s receipt of the term sheet. Term sheet purgatory can seem like is an eternity for a startup, although it may last from one week to over one month. And this has potential negative consequences for the startup.

Term Sheet 64

Term Sheet Pre-Money Valuation Liquidation Preference Option Pool 64

www.inc.com

SEPTEMBER 24, 2011

Advisor. ); STARTUP. As you think about how much equity to offer, have a reasonable valuation in mind thats been determined using professional advice. If youre offering the consultant stock options, youll also want to take into consideration what the exercise price is going to be and how long the options will be outstanding.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Scott Edward Walker

NOVEMBER 26, 2017

Despite all the hype in the press (including with respect to the latest ICO craze), raising funds for your startup is still tough – particularly if you’re not located in San Francisco or Silicon Valley. The hard part, of course, is getting in front of “A” investors to pitch your startup. Tip #1: Get Warm Referrals to “A” Investors.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

Business Plan Blog

DECEMBER 26, 2013

Pre-money valuation. A capitalization table showing the post-investment ownership structure of the business to include founders, option pool and investors in the current round. Startup Funding' Amount to be invested. Type of security and structure. Service contracts. Professional fees and costs.

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

venturehacks.com

MARCH 21, 2008

Venture Hacks Good advice for startups. Many advisors want options they can exercise immediately —that’s fine. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Scott Edward Walker

AUGUST 31, 2011

Thanks, Scott Question We’re a startup based in Palo Alto, and we just received a Series A term sheet for a $725,000 investment. At what valuation and on what terms? But more importantly, a good startup lawyer will also discuss with you the business terms, including the structure of the deal.

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

The Next Web

AUGUST 14, 2013

But since I’m relatively fresh off of the experience I get asked by first-time founders how they should go about raising money for their startup. Consult/freelance to pay off your expenses and leave the rest of your time for working on your startup. You don’t need to be in SF or NY to get your startup off the ground.

Founder 142

Founder Incubator Cofounder Accredited Investor 142

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? October 2010 After barely changing at all for decades, the startup fundingbusiness is now in what could, at least by comparison, be calledturmoil. At Y Combinator weve seen dramatic changes in the fundingenvironment for startups. Most startups coming out of Demo Day wanted to raisearound $400k.

Valuation 92

Valuation Stock Partner Founder 92

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 5 Stock vs Options. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. In a startup, dilution happens, and you just need to factor it in. 3 Dilution.

Equity 56

Equity Employee Vesting Preferred Stock 56

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

venturehacks.com

SEPTEMBER 22, 2011

Venture Hacks Good advice for startups. Offers from top-tier firms increase your valuation. For the average startup, that would be an extraordinary bargain. It would improve the average startup’s prospects by more than 43% just to be able to say they were funded by Sequoia, even if they never actually got the money.”

Equity 40

Equity Cap Table Valuation RSS 40

Both Sides of the Table

AUGUST 17, 2009

Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. But these people seldom make retirement money from the stock options on these companies. Tags: Start-up Advice startup. Starting with 25% is even harder.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

www.startupnorth.ca

OCTOBER 23, 2010

We talk about the founders of startups and companies. Steve Blank divides the individuals associated with startups as: Founders Early Employees (Employees # 1-25) Later Employees (Employees # 26-125) The majority of his division is about the temperament of the individual as related to risk and dealing with chaos and uncertainty.

Employee 41

Employee Founder Salary Equity 41

Gust

SEPTEMBER 13, 2012

In general, and in a more-or-less-ideal world, companies should be prepared to give up roughly 20%-40% of equity for each round of early financing, where the size of each round is enough for the company to increase its valuation significantly.

Option Pool 160

Option Pool Equity Valuation Startup 160