Startany.com. Remote Acceleration Program.
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The Founder’s Guide to Early-Stage Valuation
Presented by Stephen R. Poland, co-founder 1x1 Media.
For many early-stage entrepreneurs assigning a valuation to your startup is one of the more intimidating tasks encountered during the fundraising quest. Based on the popular Founders’ Pocket Guide: Startup Valuation, this webinar provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by- step examples for several valuation methods.
This webinar helps startup founders learn:
What a startup valuation is and when you need to start worrying about it.
Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.
How investors view the valuation task and what their expectations are for early-stage companies.
How the valuation fits with your target raise amount and resulting founder equity ownership.
How to do the simple math for calculating valuation percentages.
How to estimate your company valuation using several accepted methods.
Stephen R. Poland
Stephen R. Poland has worked with hundreds of startups and entrepreneurs, mentoring them on startup mechanics, funding plans, pitch decks, financial models, and due diligence documentation for the angel funding process.
Steve brings more than 20 years' experience in startups and entrepreneurship to his career. Leveraging leadership roles with the Walt Disney Company, MacMillan Publishing, and Bertelsmann, Steve co-founded startups in the digital music and on-demand media manufacturing sectors, as well an early days anti-virus product.
Along with being co-founder of 1x1 Media, Steve works as a venture growth advisor in Western North Carolina.
Startany.com. Remote Acceleration Program.
---------------------------------------------------------------
The Founder’s Guide to Early-Stage Valuation
Presented by Stephen R. Poland, co-founder 1x1 Media.
For many early-stage entrepreneurs assigning a valuation to your startup is one of the more intimidating tasks encountered during the fundraising quest. Based on the popular Founders’ Pocket Guide: Startup Valuation, this webinar provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by- step examples for several valuation methods.
This webinar helps startup founders learn:
What a startup valuation is and when you need to start worrying about it.
Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.
How investors view the valuation task and what their expectations are for early-stage companies.
How the valuation fits with your target raise amount and resulting founder equity ownership.
How to do the simple math for calculating valuation percentages.
How to estimate your company valuation using several accepted methods.
Stephen R. Poland
Stephen R. Poland has worked with hundreds of startups and entrepreneurs, mentoring them on startup mechanics, funding plans, pitch decks, financial models, and due diligence documentation for the angel funding process.
Steve brings more than 20 years' experience in startups and entrepreneurship to his career. Leveraging leadership roles with the Walt Disney Company, MacMillan Publishing, and Bertelsmann, Steve co-founded startups in the digital music and on-demand media manufacturing sectors, as well an early days anti-virus product.
Along with being co-founder of 1x1 Media, Steve works as a venture growth advisor in Western North Carolina.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
9 Business turnaround strategies designed particularly for small businesses that do not have access to some of the clout and resources larger companies can call on.
Inside The Mind Of The Venture Capitalist: An Introduction to Venture CapitalJ. Skyler Fernandes
The was the first is a series of presentations by Inside the Mind of The Venture Capitalist, presenting the basic foundations of Venture Capital and what Venture Capitalists look for in companies.
How much is your start-up worth? How much capital can you raise? How much equity will you have to give up? What will investor be looking at? What is too little? What is too much?
5 slides, quick and dirty job, far from perfect, but a good starting point.
FEEDBACK WELCOME
Startup Investing 101 - Learn how to invest in startups.
As one of the leading online startup investing marketplaces, Onevest's vision is to make investing in privately held companies easy by providing a gold standard in deal flow that matches your specific areas of interest. You tell us what you like, and we deliver just that.
Webinar Agenda
Top four most asked questions by newbie startup investors.
1. How do I compare startups to determine most attractive opportunity?
2. What type of due diligence should I do before making an investment?
3. What happens after I invest in the startup?
4. What type of return on investment can I expect?
The second presentation from Vienna Value Investing meetup, wee discussed value decomposition, how to estimate asset value and how to predict future earnings of a stock.
Topics Discussed:
- What is Venture Capital
- Overview of VC Funds
- VC Investment Process
- VC Investing Strategies
- Other Investors
- VC Fundraising Materials
- Resources
Learning how a VC firm works behind the scenes is a good way to gain important strategic insights on becoming a more attractive investment. But understanding the ins and outs of a VC firm can be easier said than done, even for entrepreneurs who spend a lot of time speaking to investors.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
9 Business turnaround strategies designed particularly for small businesses that do not have access to some of the clout and resources larger companies can call on.
Inside The Mind Of The Venture Capitalist: An Introduction to Venture CapitalJ. Skyler Fernandes
The was the first is a series of presentations by Inside the Mind of The Venture Capitalist, presenting the basic foundations of Venture Capital and what Venture Capitalists look for in companies.
How much is your start-up worth? How much capital can you raise? How much equity will you have to give up? What will investor be looking at? What is too little? What is too much?
5 slides, quick and dirty job, far from perfect, but a good starting point.
FEEDBACK WELCOME
Startup Investing 101 - Learn how to invest in startups.
As one of the leading online startup investing marketplaces, Onevest's vision is to make investing in privately held companies easy by providing a gold standard in deal flow that matches your specific areas of interest. You tell us what you like, and we deliver just that.
Webinar Agenda
Top four most asked questions by newbie startup investors.
1. How do I compare startups to determine most attractive opportunity?
2. What type of due diligence should I do before making an investment?
3. What happens after I invest in the startup?
4. What type of return on investment can I expect?
The second presentation from Vienna Value Investing meetup, wee discussed value decomposition, how to estimate asset value and how to predict future earnings of a stock.
Topics Discussed:
- What is Venture Capital
- Overview of VC Funds
- VC Investment Process
- VC Investing Strategies
- Other Investors
- VC Fundraising Materials
- Resources
Learning how a VC firm works behind the scenes is a good way to gain important strategic insights on becoming a more attractive investment. But understanding the ins and outs of a VC firm can be easier said than done, even for entrepreneurs who spend a lot of time speaking to investors.
Raising capital is a pivotal process for any startup. This document outlines the vital phases every entrepreneur must navigate to transform an idea into a flourishing business. This resource provides a clear, detailed map of the funding landscape, from early angel rounds to the final stages before an IPO.
Key Highlights from the Document:
1) Pre-Seed and Seed Funding: These initial stages are crucial for getting your startup off the ground, focusing on proving your concept and building a minimum viable product (MVP).
2) Series A to C Funding: As startups progress, funding rounds grow larger and focus shifts from proving viability to scaling the business, enhancing market share, and possibly even preparing for global expansion.
3) Bridge and Mezzanine Financing: These less common but crucial stages provide the necessary capital to bridge gaps between major funding rounds or prepare for a public offering.
4) IPO: The ultimate goal for many startups, going public opens new avenues for capital and provides liquidity for early investors.
Venture Capital 101 presentation on the basics of VC such as what venture capital is, and how it works. I delivered this presentation to a student group called InSITE that I belong to (mix of Columbia and NYU MBA and Law students). Enjoy!
-Brian Rothenberg
www.brianrothenberg.com
How to VC: Creating a VC fund portfolio modelDave McClure
This article aims to help VCs figure out how to size a venture capital fund, how many companies to include in your portfolio, and when and how to do follow-on investments. Most VCs aim to make a 3X (net) return on initial fund capital, at a ~20% net IRR. Note however, likely less than 10% of most VC funds achieve that goal.
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Yvonne Gamble
As you develop a financing strategy for your company do not get insight on how to stand outside of the box, expand your vision and reach your financial goals.
Kauffman Foundation Report: Poor Long-Term Returns from Venture CapitalPhilipp Klöckner
A recent report by the Ewing Marion Kauffman Foundation raises serious questions about the degree to which venture capital deserves emulation.
The report, provocatively titled “We Have Met the Enemy and He is Us”, summarizes its findings thus:
Limited Partners (LPs) — foundations, endowments, and state pension funds — invest too much capital in underperforming venture capital funds on frequently misaligned terms. Our research suggests that investors like us succumb time and again to narrative fallacies, a well-studied behavioral finance bias.
3. Venture Capital: High risk, high reward
An alternative asset class. Subset of Private Equity. Invest to diversify portfolio.
Investing in VC fund is typically 2-5% of a Limited Partner’s investment portfolio.
Can return 30% of the entire portfolio's performance.
High risk high reward. Outsized returns-Multiple on investment, not a percentage.
Investing in globally disruptive high growth, high-tech startups and companies with
long-term growth potential. Returns when company is taken to a successful exit.
4. Venture Capital
A subset of private equity. Not liquid. Purchasing equity in early stage innovative
disruptive companies addressing large global markets. Provide funding and active
managerial/operational assistance.
Generate returns by: Adding value and guiding these investments through to a
major liquidity event/exit ex: IPO, M&A or sell shares on a secondary market.
Returns on investment are very high- typically multiples, not percentages.
VC firms identify and invest in early stage high-growth startups with long-term high
growth potential. High risk for the investor, but potential for very high and above-
average returns.
5. Investment: Timeline 10 years
All investors can expect to receive all returns and their principal at the end of 10
years. VC fund typically has a 10 year timeline. Fund is dissolved at the end of 10
year period. Success is evaluated at this point
First 5 years are for identifying companies, deploying initial investments and
capital. 50% of funds are used here for initial investments. The second half
reserved for follow-on investments and managing investments through to a
successful liquidity event/exit i.e. IPO.
6. Investment Rounds: When to invest. Identifying
companies at the right stage
1) Seed stage
2) Series A
3) Series B
4) Series C (some companies may raise additional rounds
of funding i.e. Series D, E F)
5) Exit (IPO, M&A)- VC returns generated (3X, 10X, 100X)
Sweet spot for investing. Low loss, big returns. Early stage.
7. Investing at Seed Stage: Risk + Reward
Round Description
Seed Stage At this stage a company would receive investments from friends and family, Angel Investors, or early stage
VC Funds. A Seed Round is typically $100k-$1m for 20% of the company. Each investor typically writes a
check of $50-$250k. A Seed stage company does not have a financial history, or much traction for the
investor to analyze. At this stage investors are evaluating the strength of the team, the magnitude of the
problem that they are solving, and the adequacy of their solution.
Risk 84% of seed stage companies fail.
16% of seed stage companies succeed.
Failed investment here can cost between $50-$250k
Reward 644% ROI: 1 successful seed stage investment in a company can typically return 644% at exit. Can be
much higher. One success here can pay off the entire fund.
Returns can range up to 10X-100X at exit.
Typically a 3X return on investment at exit is minimum accepted standard of success.
8. Investing at Series A: Risk + Reward
Round Description
Series A After the company has a product and found a product market fit they need to initiate their go to market strategy.
This requires growing the team, and possibly incurring additional cost for targeting new markets.
Typical Series A rounds are $2m-$15m for 30% of the company, and each investor writes a check of $100k-$750k.
The Funds investing in Series A company typically have $10m-$100m in assets under management. Due to large
check requirements Series A deals are predominantly done by VC Funds, but occasionally Angel Investors will
provide a follow on investment.
When a VC is analyzing a Series A deal it is still done subjectively. In addition to the team, problem, and solution a
VC wants to understand a company’s Traction, Burn Rate, and Projections.
Risk 30% of Series A companies succeed. Make it to the next round to raise a Series B investment.
70% of Series A companies fail
Failed series A investment can cost between $100K-$750K.
Reward 300% ROI: A successful investment here can yield returns of 300% at exit, potentially higher.
Between Seed Stage and Series A is the sweet spot for investing. Low loss, big returns.
Returns can range up to 10X-100X at exit.
Typically a 3X return on investment at exit is minimum accepted standard of success.
9. Investing at Series B: Risk + Reward
Round Description
Series B Series B funding is traditionally used for scaling a product. For most companies this means not just reaching new users,
but growing a sales team, marketing team, finance team, and purchasing other companies.
A typical Series B round is anywhere from $10m-10s of millions. At this point a company has been operating long enough
that their projects are more reliable. This enables VCs to make objective judgments about the quality of a deal.
In this round a Series A VC Fund will provide a follow on investment, but new investments come from VC Funds that
specialize in Series B companies.
Series B Funds typically have $100m-$400m under management, and each investor will typically write a check of
$1m-$5m.
Risk 56% chance of success.
Failed investments here can cost $1-$5m.
Reward 94% ROI: A successful investment here can typically yield returns of 94% at exit.
Though Series B is less risky, you are investing significantly more money, and seeing a smaller return.
10. Investing at Series C: Risk + Reward
Round Description
Series C Series C, and the subsequent rounds, are about continuing to Scale and purchasing companies.
Though there are Series C VC funds this is where companies may start to target institutional investors and Private Equity
groups.
Here is typically when companies will look to exit, IPO or M&A.
Risk 83% of companies who close a Series C will successfully reach an exit.
Reward 20% ROI: These are much more stable investments, but they typically only yield a 20% return.
11. EXIT: Major Liquidity Event
This is the major liquidity event. Typically after Series C.
IPO or M&A
When startups are sold, taken public or acquired.
This is where the returns for VC are generated
10X-100X returns possible (sometimes more)
3X returns general minimum standard of success
12. Venture Capital
A venture capital firm raises funds from several limited partners into a pool of
funds. Limited partners recognise the need to diversify their portfolio into this risky
alternative asset class as the returns can be outsized. The VC firm uses the
money limited partners commit to the fund to make investments in exchange for
equity. Returns to be generated upon an exit.
Key Players:
1) Limited Partners
2) General Partners
3) Entrepreneurs
13. Limited Partners- Invest in the fund
Limited partners are the investors that provide the money and capital by investing in a Venture Capital
Fund. This money is put into a pool which the General Partners then use to invest in promising companies
they have identified.
LP’s include high net worth individuals, banks, institutional investors, pensions, insurance companies,
companies, endowments, universities, family offices, sovereign wealth funds, governments looking to
stimulate startup ecosystem, donor agencies and the like.
After 10 years at the end of the funds life LP’s are paid out first. The principal amount invested and 80% of
all profits are paid to LP’s.
14. General Partners- Run the fund. Make investments.
General partners are the venture capital firms, venture capitalists and analysts that make up the team running the business
and making the investments. This is the team in charge of the management company- employees and admin work. GP’s
manage the funds and do all the work investing and guiding companies to exit. They source deal flow and identify promising
companies and deploy the capital investing in selected companies. General Partners work for the LP’s and have a fiduciary
responsibility to maximise their returns.
2-3% of all funds raised from LP’s is used by the GP’s as a management fee to cover all business operational expenses i.e.
salaries, contracts, travel etc
GP’s keep 20-25% of all profits as carried interest- After returning principal and 80% of profits to LP’s first at the end of the
fund.
General Partners can choose to raise a new fund and continue investing based on the success of their prior fund
15. GP’s aka Venture Capitalists Do 6 Things
1) Raise money from Limited Partners for their VC fund
2) Find companies to invest in (Sourcing, dealflow)
3) Close Deals (make investments in desired companies)
4) Invest money, time, effort to help grow companies
5) Manage and guide companies to exit
6) Generate big returns for LP’s
16.
17. Entrepreneurs
The talented people that are creating new and exciting companies that will change
the world.
These are the people that make up the startups that VC’s look for to invest.
VC firms are here to back their big ideas.
VC’s have to identify these talented people and teams and filter through them to
figure out which ones to invest in.