Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

DECEMBER 6, 2011

Copyright BillPayne.com 2011. Milestones are accomplishments that demonstrate the viability of the business; hence, they increase the valuation of the company. The figure below shows the number of investors by investment size for startup ventures. million and $4 million.

Angel Investor 179

Angel Investor Venture Capital Valuation Software Engineering 179

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. And for some that means that despite waiting they may see worse valuations in the future than now.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Lightspeed Venture Partners

OCTOBER 7, 2012

They won a design award at a trade show, but have no revenue and no orders. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. He did $5M in 2011 sales and is projected $7.2m Kevin questioned the use case since bowls are ubiquitous.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Startup Professionals Musings

APRIL 24, 2011

I just read the Q1 2011 report from CB Insights , which shows venture capital is back. Your friends and family are really the only answer until you have a significant revenue stream. Use friends, family, and angels, if possible, to get a product, revenue, and customers first before the VC connection. Overall, investors put $7.5

Venture Capital 233

Venture Capital Revenue Elevator Pitch Silicon Valley 233

Agile VC

MAY 26, 2011

May 26, 2011. LinkedIn’s product had only been live for a couple months, we only had tens of thousands of registered users, and wouldn’t start generating revenue for more than a year after this point. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Both Sides of the Table

OCTOBER 1, 2009

I obviously don’t have a crystal ball so the economy could fare better than my gut, but here’s why I’m cautious for some time in 2010 or early 2011: Why is the future still so unpredictable? This has a tangible impact on the valuation of start-ups and the pace of investment.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 Scorecard Valuation Methodology. Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures. million for pre-revenue companies.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Both Sides of the Table

MAY 19, 2010

Founded in November 2007 in New York City by Alexis Maybank and Kevin Ryan (co-founder of DoubleClick); CEO is Susan Lyne (ex-CEO Marta Stewart Living Omnimedia) Revenue estimates: $50mm in 2008; $170mm in 2009 (versus budget of $150mm); $450mm forecasted for 2010. Note that these are “gross” revenue numbers. OTHER DEALS: 1.

Partner 240

Partner New York City Cofounder Syndicate 240

Steve Blank

JUNE 15, 2011

A tech bubble is the rapid inflation in the valuation of public and private technology companies that exceeds their fundamental value by a large margin. Today, the signs of the new bubble are the Linked-In initial public offering (IPO), Facebook’s stratospheric valuation and the rapid rise of early-stage startup valuation.

Silicon Valley 330

Silicon Valley Stealth Valuation Mississippi 330

Hippoland

JULY 24, 2016

Valuation is a nebulous topic amongst early stage startups, so I thought I’d really spell it out in detail. In short: Valuations for seed stage companies are fairly arbitrary and driven solely by supply and demand. Your startup’s valuation is not based on a proforma of your revenue.

Seed Stage 48

Seed Stage Valuation Vertical Demand 48

Tim Keane

MARCH 9, 2011

How to prepare a sales forecast for a business plan » March 09, 2011. Example two:  Explosive market share growth and revenue in an expanding market with acquisitive players available.   The company is pre-revenue and Sarah’s intention is to sell the company within three years. .  five years.). . 

Finance 83

Finance Bootstrapping Startup Equity 83

Cracking the Code

MARCH 12, 2010

Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Given that the revenues are not growing very fast, this means that most of the companies have reduced their sales force and focused on productivity improvement. SaaS 13 Index Valuation.

Software Review 63

Software Review Technical Review Cloud Forecast 63

ConversionXL

JULY 16, 2021

By collating key information in a framework, you’ll reduce internal feedback loops, improve collaboration, and empower consistency—which can increase revenue by 33%. . It took 10 years and steady growth, punctuated by a brilliant messaging strategy, to achieve a $5 billion valuation. .

Audience 127

Audience Framework Differentiation Software Review 127

Steve Blank

MARCH 18, 2011

The signals are loud and clear : seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble. The New Bubble : (2011 – 2014): Here we go again…. (If The old rules of sustainable revenue and consistent profitability went out the window.

Internet 334

Internet IPO Silicon Valley Agile 334

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. Valuations are rising to match. A typical seed round valuation may be $6M pre, raising $2M for an $8M post, or even as high as an $8M pre, raising $2M for a $10M post. In the 80s and 90s a company would go public when it hit $20M in revenue.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Rob Go

DECEMBER 28, 2011

So I thought I’d jot down some of the highlights I have seen from my vantage point in this 2011 Boston Consumer Web Year in Review. 61M in Q3 revenue, up 28% YoY. The company is expected to do around $500M in revenue in 2011 and has seen 50%+ growth YoY the past two years. IPO’s/Exits. market cap. from Accel.

Technical Review 54

Technical Review Boston Software Review IPO 54

www.inc.com

SEPTEMBER 24, 2011

The 2011 Inc. The 2011 Top Lists. But with the help of Grahams company, which specializes in creating tech systems for start-ups, Jumpstart grew to more than $50 million in revenue--enough to make it an attractive acquisition for media conglomerate Hachette Filipacchi. Telecom and Wireless. Technology. INNOVATION. 500|5000 List.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Babbling VC

AUGUST 10, 2011

It's about to get rough out there and I am not even alluding to valuations. I am seriously babbling like everyone else did in 2001, 2008 and now again in 2011. Make your customers happy, especially the ones generating the majority of your revenues. No matter what, stay focussed on generating revenues. .

Germany 76

Germany Stock IPO Valuation 76

Agile VC

OCTOBER 1, 2013

Facebook’s IPO was obviously a debacle, and in the private investment sphere valuations from the seed through late stage have declined for the most part from their peaks in late 2011 through early 2012. This is not ’98-99 when pre-revenue companies were IPO’ing.

IPO 147

IPO Cloud Valuation Mobile 147

Cracking the Code

DECEMBER 1, 2009

Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. ► 2011. (2). The recession created opportunities! S&M productivity (CAC ratio) for the SaaS 13 Index. Note: high CAC ratio means high productiviy (see blog post for definition). My Investments. CornerstoneOnDemand. anecdotes. (13).

Software Review 48

Software Review Technical Review Cloud Europe 48

Steve Blank

FEBRUARY 10, 2016

Will was honored at the White House as part of the 2011 Empact 100 list , for his work as a young entrepreneur. Keen Home appeared on the TV show, Shark Tank , in 2012, landing one of the highest valuations in the show’s history. Will Zell started his first company, a real estate business, at age 22.

Silicon Valley 120

Silicon Valley Ohio Columbus Entrepreneur 120

Cracking the Code

OCTOBER 9, 2009

This strong recovery has highlighted the resiliency of the recurring revenue model in a downturn as well as the stength of the shift to soaftware-as-a-service and cloud computing. In other words, how much of the decline in revenue growth is due to signing up fewer customer vs lower revenues from each new customer. anecdotes. (13).

Software Review 48

Software Review Technical Review Cloud Europe 48

Lightspeed Venture Partners

SEPTEMBER 21, 2013

to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. Despite having over 500k downloads and making $450k in revenue over the last 21 months, he had only $185k left in the bank, which meant that he would be out of business in 90 days if he didn’t raise more money.

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. SaaS 13 Index Valuation. anecdotes. (13).

Software Review 48

Software Review Technical Review Valuation Portfolio 48

Agile VC

FEBRUARY 2, 2012

How They Make Money : Facebook’s primary revenue stream is of course selling advertising on Facebook.com, which in total accounts for 85% of revenue. The next chunk comes from Facebook’s platform, in essence “taxing” the revenues of app developers like Zynga, which represents 15% of revenue.

IPO 100

IPO South Korea Venezuela Revenue 100

Cracking the Code

NOVEMBER 10, 2009

It is intriguing to see the M&A dynamics in the space, highlighting the interest of tech companies for recurring revenue streams - even SAP announced in their analyst call earlier this month that they were moving from perpertual licenses to five year term licences. Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 48

Software Review Technical Review IPO Cloud 48

ithacaVC

MARCH 11, 2016

I first wrote about Rule 409A back in September 2011. Here is the post, which focused mostly on how 409A valuations are used for stock option purposes. And I think that early stage companies should take the risk and not use 409A valuations. The 409A valuation is not based in VC reality. I can understand that!

Pre-Money Valuation 40

Pre-Money Valuation Stock Options Valuation Later Stage 40

Tim Keane

JUNE 22, 2006

Testing to Increase Valuations. If lowered risk translates into higher valuations when the business either attracts investors or is sold, then lowering risk for the lowest possible dollars creates very high returns. If customer interest can be obtained in a live test involving revenue, valuation may rise again.

Valuation 60

Valuation Wisconsin Angel Investor Startup 60

Cracking the Code

NOVEMBER 10, 2009

Cloud accounting is all about matching revenue and costs to consumption…well, except for professional services! Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. ► 2011. (2). The most important part of Software-as-a-Service isn’t "Software" its "Service"! Mind the GAAP!

Software Review 48

Software Review Cloud Technical Review Sales Cycle 48

Lightspeed Venture Partners

OCTOBER 22, 2012

The company has gotten off to a fast start, $150k in revenue in the first two months, with all the marketing coming from social media. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). In 2011 they did $100k in sales and $40k in profits.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

The Equity Kicker

JULY 26, 2012

The business is still growing – revenues were up 19% to $332m for the quarter – but losses widened and the company slashed its growth targets. This is a similar story to GroupOn (share price off 74% since it’s November 2011 IPO) and even Facebook (share price off 26% since its May IPO). Garbage in, garbage out.

Investment Bankers 96

Investment Bankers IPO Marketing Valuation 96

Cracking the Code

JANUARY 22, 2009

While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3% of Year One Revenue Sounds high, but is that considered a reasonable package?

Software Review 91

Software Review Clawback Sales Salary 91

abovethecrowd.com

JULY 10, 2014

Financial models, especially valuation models, are interesting in that they can be particularly precise. While it may seem like a tough question to answer, I would argue that most practitioners of valuation analysis would state “not very high.” It is not my aim to specifically convince anyone that Uber is worth any specific valuation.

San Francisco 111

San Francisco San Jose Marketing Technical Review 111

K9 Ventures

APRIL 9, 2014

In May 2011, I wrote the post: Investor Nomenclature and the Venture Spiral. The party rounds , which were the range in late 2010 and early 2011, became less common and we started to see the smaller funds begin to lead rounds. The low supply and high demand is driving up the valuations and deal sizes.

Mezzanine 134

Mezzanine Seed Stage Early Stage IPO 134

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. By 2010-2011 this had shrunk by half again, averaging under $15 billion. By the end of 2011 the Internet population was estimated at 2.3 This never existed a decade ago.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Cracking the Code

FEBRUARY 25, 2008

As I was building the spreadsheet, I also included the revenue multiples for this set of companies, both for the trailing 12-month (TTM) and the forward 12-month (FTM). Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. ► 2011. (2). pts and is dynamically updated via GoogleDocs.

Software Review 48

Software Review Technical Review Europe Venture Capital 48