Podcast
Questions and Answers
At which stage do friends and family typically invest at the lowest price?
At which stage do friends and family typically invest at the lowest price?
- Series A
- Co-founder Stage
- Initial Public Offering
- Seed Round (correct)
What percentage of equity does the first founder retain after the Seed Round?
What percentage of equity does the first founder retain after the Seed Round?
- 37.5% (correct)
- 31.2%
- 19.2%
- 17.6%
Which of the following groups typically invests at a $4 Million valuation?
Which of the following groups typically invests at a $4 Million valuation?
- Angels (correct)
- Public Investors
- Venture Capitalists
- Family and Friends
How much equity does the investment banker receive from an IPO?
How much equity does the investment banker receive from an IPO?
What is the primary role of early employees in the funding process?
What is the primary role of early employees in the funding process?
What do investment bankers do for a startup during the IPO process?
What do investment bankers do for a startup during the IPO process?
What is typically allocated for future employees during the Co-founder Stage?
What is typically allocated for future employees during the Co-founder Stage?
At what valuation does the venture capital stage occur?
At what valuation does the venture capital stage occur?
Flashcards
Seed Round Funding
Seed Round Funding
Early stage funding from friends and family, typically at a low valuation.
Series A Funding
Series A Funding
Funding round attracting angel investors at a higher valuation.
Venture Capital Funding
Venture Capital Funding
Funding from venture capitalists, often at a higher valuation and greater investment.
IPO (Initial Public Offering)
IPO (Initial Public Offering)
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Angel Investors
Angel Investors
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Valuation
Valuation
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Option Pool
Option Pool
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Founder Equity
Founder Equity
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Study Notes
Startup Funding Stages
- Startup funding begins with "nothing" and progresses to an IPO (Initial Public Offering) with a valuation of $2.6 billion which is 17% of a large corporation's valuation of $24 billion.
- Idea Stage: Initial idea, no money.
- Co-founder Stage: $15,000-$2 million valuation.
- Seed Round: $1 million valuation. Family and friends are early investors.
- Series A: $10 million valuation. More funding rounds to follow.
Funding Breakdown
- Splitting the Pie (percentages vary):
- Founder 1: 37.5%
- Founder 2: 31.2%
- Uncle (option pool): 5% or 2.6%
- Angel Investors: 19.2% or 17.6%
- Early employees: 1.8%, or 1.7%
- Venture Capital (VC): 20.0%
- Public (after IPO): 30.5%
- Other Investors:
- Family and Friends: invest at very low price
- Angel Investors: invest above $1 million
- Venture Capitalists: persuade investors in venture funds
- Employees: gain shares
- Investment Bankers: do the IPO paperwork; keep 7% of entire IPO.
- Important Notes: Percentages are approximations and vary between startups. Option pools hold shares for future employees and potential needs.
Investor Types
- Family and Friends: Early investors, typically with low investment amounts.
- Angels: Individual investors with larger capital amounts, typically $1,000,000 or more.
- Venture Capitalists: Groups pooling money for investment in startups.
- Employees: Early employees get stock options as a part of their compensation.
- Investment Bankers: Assist with IPOs and the IPO process. 彼らはIPOの書類業務を行い、IPOの何パーセントかを獲得する。
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