Valuing Startup Common Stock

Over the years, I have had many occasions to talk about company valuations with founders. Whether negotiating the terms of an investment or discussing option grants at board meetings, the topic is central to the relationship between a company and its closest stakeholders — its…

What Is Pre-Seed?

I was talking with a group of accomplished technologists this week — academics, former entrepreneurs — discussing the fundraising strategy for a company that has raised some angel funding. At one point, there was discussion of a “Series A” financing in the near-term future of the company. The…

An Open Letter to Other VCs

To Whom It May Concern,

As may already have happened, my firm, CoVenture, will occasionally send you investment opportunities. When these companies are from our portfolio, we obviously know them well and are sending them to you because we feel they are…

How Much Capital Should You Raise?

Entrepreneurs embarking on a fundraising process struggle with this question. Will you suffer too much dilution by raising too much? Do you need to raise at least a certain amount to get the attention of certain investors? What if you set your sights too high and fall…

Approaching Users with Your New Product

Venture investors and people who invest in venture firms and startups often quote Wayne Gretzky: “I skate to where the puck is going to be, not where it has been.”

Principles of Good Projections

This post was written for founders of relatively new businesses… it started as an e-mail to one such founder about how to build an early financial model and, in particular, how to project revenue.