Both Sides of the Table

article thumbnail

Should Startups Focus on Profitability or Not?

Both Sides of the Table

Gross Profit (also called Gross Margin or sometimes “Net Revenue”). And assuming they both had the same net profit margins (profit / revenue) then the former company would be much better off at the end of the year. They both raised angel / seed money of $1.5 Simplifying: Revenue -. Cost of Goods Sold (COGS) =.

Startup 418
article thumbnail

What Makes an Entrepreneur? Cojones (7/11)

Both Sides of the Table

Partners in VC funds only wanted to fund entrepreneurs who had a certain percentage of their net worth tied up in their venture. VCs don’t have the same net worth litmus test and great entrepreneurs have a ton of sources for seed money to get financed very early. That’s hard core. Not my problem.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Should Startups Care About Profitability?

Both Sides of the Table

This is not atypical for “middle men” who often take 15–30% of the value of the sale If you’re shaking your head and thinking, “duh” I promise you that even some of the most sophisticated people I know get off track on this issue of “gross revenue” versus “net revenue.” They both raised angel / seed money of $1.5

article thumbnail

Should Founders Be Allowed to Take Money off the Table?

Both Sides of the Table

The net effect for [my company] for example is we are now doing reasonably well. I raised $500k in seed money to start the company. Founders however are asked to take low salaries and never really get back the time they worked for free. At some point, this breaks if their isn’t an exit or IPO.

Founder 329