Funding & Valuation
Ref:
Capital Raise:
- Seeding
- From FFF (Fool, Friend, Family), Angle Investor, Incubator
- Between $500,000 and $2 million
- Series A:
- Developing a business model, even if they haven’t proven it yet
- Investment between $2 million - $15 million
- Series B:
- Market fit and needs help expanding
- Investment between $7 million and $10 million
- Company valuation between $30 million and $60 million
- Series C:
- Ready to expand to new markets, acquire other businesses, or develop new products
- Investment avg $26m
- Company valuation between $100 million and $120 million
- Series D:
- Many companies finish raising money with their Series C
- Discovered a new opportunity for expansion before IPO or hasn’t hit the expectations laid
- Series E:
- They’ve failed to meet expectations;
- they want to stay private longer;
- they need a little more help before going public
Valuation
- Pre-money valuation vs Post-money valuation
- 209a Valuation: appraisal of the fair market value (FMV) of a private company
Fixed Equity Split
- How to allocate stock to founder
- Founder basics: stock
- Vesting
- Vesting Cliff
Dynamic Equity Split
Not Fair = Not Fun