We get this question all the time and there’s no right answer. So I started a discussion on Quora to learn more. Here’s my answer: Raise less if you want to keep your valuation down and keep the option open for an early exit where everyone (investors, employees and founders) makes money. Raise more if [...]
Entries Tagged as 'Future Financings'
VCs in seed clothing: Chris Dixon, Mark Suster, and Naval Ravikant interviewed
May 5th, 2010 · 5 Comments · Angels, Future Financings
I recently got on the phone for a cross-continent conference call with Chris Dixon from Founder Collective, Mark Suster from GRP Partners, and our own Naval Ravikant. The topic was VC signaling in seed rounds — and how these signals help or hurt your ability to raise money in the next round. The interview was [...]
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How much money should we raise?
April 14th, 2008 · 2 Comments · Case Studies, Future Financings
Summary: Raise as much money as possible. With these caveats: (1) maintain control at any cost, (2) monitor your liquidation preference, and (3) act like you don’t have a lot of money. Also understand that if you do raise a lot of money, you will have to (1) “go big or go home” and (2) [...]
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Why do investors want protective provisions?
August 2nd, 2007 · 6 Comments · Board of Directors, Future Financings, M&A, Protective Provisions
“AOL almost sold to Compuserve in 1991 for $60M. The VCs wanted to sell. [Steve] Case won by 1 vote. 10 years later, [AOL was] worth $100 billion.” – Mark Pincus Summary: Protective provisions let preferred shareholders veto certain actions, such as selling the company or raising capital. They protect the preferred, who are minority [...]
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Keep your Series A options open if you raise debt
May 8th, 2007 · 13 Comments · Convertible Debt, Future Financings
“[Our existing investors] had put in a right of first refusal. Since I was a young entrepreneur at the time, I didn’t understand that this basically meant that you couldn’t go to any other VC… We could not get a higher valuation because [our existing investors] wanted to put more money in the company themselves. [...]
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