View from Seed

MARCH 24, 2021

At NextView Ventures we have written many pieces about venture capital — how to raise it, build your business, engage with investors, iterate your product, navigate expanding industries, etc. I’ve Been in Venture Capital for Two Months. VCs sure do love writing. ” (Lee Hower). ” (David Beisel).

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

ReadWriteStart

JULY 21, 2011

When we were trying to raise money for E.piphany, my last startup, I was negotiating with a venture capital firm called Infinity Capital. They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation.

Post-Money Valuation 122

Post-Money Valuation Valuation IPO Venture Capital 122

Both Sides of the Table

JULY 25, 2010

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. So what are you waiting for? Go get your anchors.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Both Sides of the Table

SEPTEMBER 28, 2014

Simply put – down rounds are very hard to achieve psychologically because insiders fight against them (rightly or wrongly) and outsiders have a mental gap that if your valuation is going down your company is forked up and they often just pass. On the other hand, exits at lower prices are easier with these providers of capital.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Steve Blank

JULY 19, 2011

When we were trying to raise money for E.piphany, my last startup, I was negotiating with a venture capital firm called Infinity Capital. They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. Filed under: E.piphany , Venture Capital.

Post-Money Valuation 250

Post-Money Valuation Venture Capital Valuation IPO 250

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.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Both Sides of the Table

OCTOBER 12, 2014

” If you invested at $8m pre-money and put $2m in (thus you own 20% of a company at a $10m post-money valuation) and if you put another $2m into a round at a $40m valuation raising $10m ($50m post) you end up with half your money at $8m pre and half at $40m pre thus your average price goes up dramatically.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

JUNE 5, 2011

I’ve been preaching the “don’t get ahead of your inherent valuation&# message for nearly 10 years. million post-money valuation with no revenue. We had companies pitching us that had almost no revenue at all and they were raising $10-15 million in capital at a $40-50 million pre-money valuation.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

MAY 13, 2013

If you give $2 million for 20% of a company ($8 million pre + $2 million investment = $10 million post-money valuation) that has no product and no customers and it turns around 3 months later and sells for $5 million it would hardly be fair for investor to get $1 million back (20% of the proceeds). I’m a VC.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Growthink Blog

JANUARY 24, 2011

I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Berkonomics

MARCH 28, 2019

Some businesses just can’t fit within the angel capital or friends and family model for raising funds. Sooner or later you may need to seek venture capital and accommodate the needs of the venture community in negotiating the terms of an investment. What VC’s can and cannot do.

Limited Liability Company 48

Limited Liability Company Post-Money Valuation Valuation Down Round 48

VC Cafe

NOVEMBER 1, 2019

Notion Labs (not to be confused with Notion the venture capital fund), is one of those products. The riynd was led by First Round Capital, joined by several other star investors including Josh Kopelman, Shana Fisher, Naval Ravikant, Aydin Senkut, Elad Gil and Mike Vernal. Every now and then though, one does. First Round was.

Wiki 68

Wiki San Francisco Post-Money Valuation Cloud 68

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. Let’s pause here and take stock of the stats, which are incredible: According to Pitchbook , the current median deal size for a seed deal is $2.2M

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Berkonomics

APRIL 6, 2012

Some businesses just can’t fit within the angel capital or friends and family model for raising funds. Sooner or later these businesses will have to seek venture capital and accommodate the needs of the venture community in negotiating the terms of an investment.

Limited Liability Company 79

Limited Liability Company Post-Money Valuation Valuation Down Round 79

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. So they recapitalize the company.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Both Sides of the Table

AUGUST 1, 2010

It’s just that he’s a “super seed&# investor in a firm, Founder Collective , that I really respect (and with whom I’ve done two deals and hope to do a third) and I’m a partner in a venture capital firm, GRP Partners. So we’re bound to frame the issue in slightly different terms.

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

Gust

SEPTEMBER 17, 2014

Me: So, you raised venture capital? If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. On the phone …. We raised a seed round. About $1 million.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Board Effect

MAY 10, 2019

Cap tables are throughout these negotiations to model potential pre- and post-money valuations. In some situations, however, it may be more appropriate to use a group/party name (as in cases where multiple venture capital groups have invested in a company).

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

Feld Thoughts

JUNE 2, 2015

If the entrepreneur knows this and is using it proactively so they get a higher post-money valuation, that’s fair game. There are also some law firms whose standard documents are purposefully ambiguous to give the entrepreneur theoretical negotiating flexibility in the first priced round.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Feld Thoughts

FEBRUARY 9, 2016

There are three things that will mess you up in the long run: Too much liquidation preference : My simple rule of thumb is that if you’ve raised more than $25m and your liquidation preference is greater than 50% of your post money valuation, you have too much liquidation preference.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Seeing Both Sides

JULY 15, 2009

A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). The “promote”, as we have called it, is the founding team’s ownership percentage multiplied by the post-money valuation. VCs have an unfair advantage when it comes to financings.

Pre-Money Valuation 49

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

Altgate

DECEMBER 18, 2008

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Holiday Cards Year End Management Changes → The 3X Liquidation Preference Is Back! In that scenario your last round investors will get $24MM of that sale off the top (3x their $8MM investment).

Liquidation Preference 31

Liquidation Preference Venture Capital Post-Money Valuation Participating Preferred 31

Professor VC

FEBRUARY 12, 2015

In 2008, I made an investment offer of $250K for approximately 38% of the company ($400,000 pre-money valuation). The current valuation of $2B is 3,000X the proposed post-money valuation of that seed term sheet. bubble IPO unicorn valuation venture capital' igthwghjg2q2g8hu4).

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

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. Leave a Reply Click here to cancel reply.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

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