“milk money…” - parts I, II, & III
It’s an amazingly detailed and honest account of the fund-raising process from someone who raised the money just over a month ago - in December 2005!
One thing that’s not mentioned in the story is the amount raised from Sequoia. I know it’s $3.5 million- straight from the horse’s mouth.
So let’s do the numbers.
$3.5M in Series ‘A’ means anywhere between 20% to 40 % stake was given away, based on how much leverage each party had.
Note that regardless of leverage, any experienced VC will typically want to own *not more than* 40% and *not less than* 20%, “post-money”. [VCs taking more than 40% drastically reduces the founders’ feeling of ownership and thus, their incentive to succeed. Taking less than 20% would mean the VCs will spend very little time or effort on this company- instead choosing to focus on the other companies in their portfolio where they have a greater “interest”.]
... continued in "Startup Valuation: Meebo.com"