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Monday, 21 May 2012

Must read! Want to Know How VC’s Calculate Valuation Differently from Founders?

Want to Know How VC’s Calculate Valuation Differently from Founders?:

Great post.. must read!

give some flavour of the 'bare all' nature of the post.. (click through above now), just see snippet below:

"I turned them down.  They were nonplussed.  They couldn’t understand how I could turn them down when they considered themselves the leader in my field and they had worked so hard to get the deal.  I told them that True Ventures had stuck to their brand name and submitted a totally clean term sheet.  No gotchas.  No option pool shuffle.  No hidden terms.  So they agreed to match True’s term sheet.  I thought to myself, “OK, they were willing to F me when they thought I had no idea what I was talking about . Now that I do they’re willing to accommodate?  Gee, if they treat me like this in good times I wonder how they’d treat me in bad times!”
So to make sure it never happens to you, as a loyal reader of this blog and hopefully an occasional watcher of This Week in Venture Capital, I recorded a video session with my colleague Kelly Hwangon how VCs calculate valuations and he’s created a cap table spreadsheet you can download from DocStoc to plug in all of the terms and you can watch the video here and/or read the text summary below."


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