- www.Pomeroy.com – “3000 corporations, government entities, and mid-market clients rely on Pomeroy IT Solutions every day” – was acquired by Platinum Equity for approximately $65 million. That approximately translates into $21.5K per customer.
- www.MobileMD.com – Health Information Exchange (HIE).
- www.CreditKarma.com – “…the latest credit score-focused funding recipient, San Francisco-based , announced that it raised $2.5 million in a Series A investment round to build up its advertising-supported business.” Read more…
- Negotiating a Better Series A Deal by Sim Simeonov (on Twitter)
- definition around the types of Series A
- Not much has been raised previously—at most a few hundred thousands and ideally nothing.
- The product has not been (fully) built.
- The size of the round is at least $3M but preferably larger.
- You are talking to professional VCs with funds > $100M.
- a company that needs several million dollars today to build a business is not worth much at all without the dollars
- the value of your company is going to be reverse-engineered from the cap table
- two things to notice about this process
- First, at no point did it require justifying the value of the startup.
- Second, the margin for negotiation is somewhat limited as (a) the option pool size should be budget-driven and (b) most investors, rightly or wrongly, are pretty set on the percentage ownership they require.
- if you really want to get your VCs to take a lower percentage, you’ll have to work a lot harder to generate interest from multiple firms
- Some investors, typically VCs with larger funds, won’t care much about giving you an extra few hundred thousand or even more than a million if you have good reasons for asking for it.
