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Praying to the God of Valuation

Both Sides of the Table

Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. And then in the late 90’s money crept in, swept in to town by public markets, instant wealth and an absurd sky-rocketing of valuations based on no reasonable metrics.

Valuation 466
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What Does the Post Crash VC Market Look Like?

Both Sides of the Table

We drew this conclusion after a meeting we had with Morgan Stanley where they showed us historical 15 & 20 year valuation trends and we all discussed what we thought this meant. But rest assured valuations get reset. When you look at how much median valuations were driven up in the past 5 years alone it’s bananas.

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8 Tips For Getting Your Startup Right The First Time

Startup Professionals Musings

The rate of new entrepreneurs increased between 2013 and 2019, from 280 out of 100,000 to 310 out of 100,000 of the adult population. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? Over 600,000 new businesses were created in the last year, or over one per minute of every day.

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Looking Back On Tech, Startups, And VC In 2018

Haystack

More and more angels will be minted as the 2019 IPO class emerges. Also during this time, the underlying metrics in that business can change positively, potentially trapping companies to accept the initially-agreed upon valuation. This is again a much deeper topic to explore and I will do that in early 2019.

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Why Gross Profit Is More Important Than Revenue

Feld Thoughts

This was before the IPO Summer of 2019 when all conventional valuation metrics have entered the land of “suspension of disbelief” which is short-term good and long-term well-we-will-see-…-eventually. We ended up talking about using Gross Profit, instead of Revenue, to do valuation analysis.

Revenue 179
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8 Key Disciplines Are Essential To Scale Any Business

Startup Professionals Musings

With the real data from that surge, you need to take a hard look at business model realities, cost of customer acquisition, inventory costs, and other key metrics. Even huge valuation increases will evaporate overnight when profitability is nowhere in sight, and you run out of money.

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What Happens When Startups Turn from Their Innovation Stage to Operational Excellence?

Both Sides of the Table

No prizes for guessing what some of MakeSpace’s innovations will be in 2018 and 2019. Raise too soon and likely take on more dilution, wait and get valuation up (as our metrics continue to rise) but then run to a point where you have a lower cash balance and place more risks on the business.