By VStart, on March 8th, 2010
Want to know how Venture Capitalists think about valuing your startup company? Here is an article by Scott Lenet of DFJ Frontier, who have a Sacramento office. Looks like formulas aren’t used; rather valuation is based on three things:
- Valuation of deals done on comparable companies
- Investors’ experience, and having the opportunity to see many deals, done or not
- Whether the investment return at the time the company exits (e.g., sells to another company, or does an IPO), under the best circumstances, meets the VC firm’s criteria
The article could lead one to think that a 10 times (10x) return is great for the investor. Well, we are Read More »»
By VStart, on January 30th, 2010
VentureStart gets many Sacramento region web startups applying for our mentoring. Very often we see great ideas and the need to raise money to hire people to code the idea/application. We normally encourage these startups to get a co-founder, or someone who will work for stock, on the team, and then get some traction before even considering raising money from Angel groups or VCs.
Adam Kalsey, the founder of SacStarts and a VentureStart mentor, recently gave advice on this to one VentureStart entrepreneur and then published it on his blog. We quote it here since it is so relevant to web startups.
Read More »»
By VStart, on January 19th, 2010
We saw a great video today that every startup entrepreneur should take a look at. It is an online interview by Jason Calacanis of Brad Feld. Jason is an outspoken entrepreneur who recently created a huge online discussion about entrepreneurs having to pay substantial dollars to present to Angel investors. Brad Feld is an entrepreneur, turned Angel and VC, who is very entrepreneur centric and has a widely read blog (that’s where we found this).
This video is 2 hours long but the first 90 minutes are really worth listening to. It covers these topics:
- Types of Angel investors and cautions about the Read More »»
By VStart, on January 14th, 2010
The Sacramento Angels, together with the Sierra Angels, led a multi-million dollar financing for San Francisco web annotation startup company, Reframe It. They were joined by other regional angel groups and individual angels. You can read the web press release here, and see another report of the financing gathered, in part, from the filing with the SEC of Form D here.
There are a couple of interesting points for entrepreneurs about this financing. First, you can see that to raise this kind of money from Angels, it takes a lead (the lead negotiates the deal terms, Read More »»
By VStart, on November 2nd, 2009
Many startups with high growth ambitions immediately think of raising money from angels or VCs. This can be challenging for first time entrepreneurs, and if family and friends money is not an alternative, then the choices left are often credit cards or bootstrapping. Here is a post on the top 10 lessons in bootstrapping from VentureBeat.
There are two ways to build a business: Raise a bunch of money or bootstrap. When I was in business school, there wasn’t much attention given to the bootstrapping notion. The “MBA way” of growing a business is to write a business plan, raise money and then execute the business plan. But I think that’s Read More »»
