Startup Professionals Musings

OCTOBER 27, 2014

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition).

Software Review 250

Software Review Software Technical Review Intellectual Property 250

YoungUpstarts

JULY 10, 2017

A change in revenue recognition means a change in the due diligence process, specifically accounting diligence, modeling, quality of earnings and cost of integration. Effects on valuation. The new standard will affect revenue multiples, margin analysis and overall cost of integration of the target company. What are the changes?

Technical Review 124

Technical Review Revenue Software Review Due Diligence 124

VC Cafe

AUGUST 2, 2022

billion valuation) to invest in the Metaverse and build the future of digital entertainment Epic owns Fortnite, one of the most popular multiplayer games, enabling users to interact with each other online in an immersive way to play, socialise, attend to virtual concerts. In April 2022, the company announced it has raised $2 billion (at $31.5

IP 206

IP Cofounder Valuation Acquisition 206

SoCal CTO

SEPTEMBER 27, 2011

Suppose further that he's going to cost $60k a year in salary and overhead, x 1.5 = $90k total. If the company's valuation is $2 million, $90k is 4.5%. Of course, to be able to use this kind of formula, you will need to be able to determine how much impact the person will have and figure out a valuation.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

YoungUpstarts

APRIL 12, 2019

This means that both parties have equal rights to the property bought/gained during the official marriage, and it does not matter who made a more significant contribution to the acquisition. So, unlike the assets and property, liabilities mean the things that cost the business money. Use one of two business valuation formulas.

Small Business 113

Small Business Valuation .Net Balance Sheet 113

The Startup Magazine

OCTOBER 29, 2023

Cost of Acquisition vs. Customer Lifetime Value The balance between the Cost of Acquisition and Customer Lifetime Value (CLV) is a critical aspect of ensuring a sustainable customer engagement strategy.

Metrics 133

Metrics Customer Harvest Acquisition 133

ReadWriteStart

JUNE 1, 2020

It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Point number 3: Never raise money with an increased valuation.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

YoungUpstarts

MAY 14, 2018

Of course, these are important ingredients to growth, but the – perhaps unconventional – truth is that this kind of growth can be riskier and less compelling to investors than growth through acquisition. Set clear financial objectives for an acquisition and create benchmarks to gauge attractiveness of potential target companies.

Acquisition 124

Acquisition Finance Raleigh Mezzanine 124

Startup Professionals Musings

MARCH 25, 2023

Should they focus on increasing revenues and profitability, or entice more and more users with “free” services, to increase their valuation. Startup productivity is embodied in key ratios, including low cost of customer acquisition, high retention, and high revenue per employee. Most are still confused about the right priority.

Valuation 235

Valuation Revenue Viral Retention 235

Gust

OCTOBER 19, 2014

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition).

Software Review 173

Software Review Software Technical Review Intellectual Property 173

Both Sides of the Table

NOVEMBER 14, 2017

MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. As companies get this initial customer feedback on their product they start to have to ask harder questions about unit economics: How much does it cost us to acquire a new customer? and we were met with weak demand, slow growth and high costs.

Operations 286

Operations New York City Technical Review Startup 286

ReadWriteStart

JULY 15, 2020

New talk of capital efficiency is gratifying, but there was another lesson from pre-COVID-19 valuation struggles. Venture capitalists and early-stage investors have told all of us, founders are critical to a startup’s valuation. One of their investors, JTC Group has developed a specialty in this arena through a recent acquisition.

Valuation 91

Valuation South Carolina San Jose Balance Sheet 91

YoungUpstarts

JUNE 17, 2015

Privacy issues that come to light in the course of the due diligence process for an acquisition can also threaten their valuation. Additionally, plan for an acquisition now by telling your users in your privacy policy that you may transfer the data in the event of a merger or acquisition. Do what you say.

Software Review 100

Software Review Technical Review Due Diligence Startup 100

Startup Professionals Musings

JUNE 21, 2020

Should they focus on increasing revenues and profitability, or entice more and more users with “free” services, to increase their valuation. Startup productivity is embodied in key ratios, including low cost of customer acquisition, high retention, and high revenue per employee. Most are still confused about the right priority.

Revenue 434

Revenue Valuation Viral Retention 434

ReadWriteStart

JULY 17, 2023

The acquisition will help Sheela Foam enter the fast-growing branded furniture market and expand its presence in the furniture industry. For Furlenco, the acquisition will provide access to Sheela Foam’s extensive distribution network and marketing expertise. The deal, proposed at $36.5 million, has valued Furlenco at about $104.3

India 104

India Acquisition Merger Curation 104

Software By Rob

FEBRUARY 28, 2012

This is final installment of a 3-part series covering my acquisition of HitTail. Could you talk a bit about the diligence you did during the acquisition? Due diligence is the most important part of the process because it dictates whether you should move forward with the acquisition, and at what price. Photo by psiaki.

Acquisition 53

Acquisition Software Review Technical Review NDA 53

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. How have more recent vintages performed?

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Haystack

DECEMBER 29, 2018

During this time, there’s financial leverage used in the transaction to help buffer the firm’s cost of capital (e.g. Also during this time, the underlying metrics in that business can change positively, potentially trapping companies to accept the initially-agreed upon valuation. That will take a long time to settle.

Technical Review 165

Technical Review Venture Capital Russia China 165

Both Sides of the Table

APRIL 15, 2010

So when Google started pushing AdSense (ads for affiliate or 3rd party sites) they had a HUGE cost advantage. it seems that Twitter should have the same Google-like cost advantage. I think everybody heard about this acquisition. billion valuation. Google had huge destination traffic. They could take a long term view.

Venture Capital 271

Venture Capital Affiliate Valuation San Francisco 271

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. How have more recent vintages performed?

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Startup Professionals Musings

OCTOBER 19, 2015

The best technologies are barely invisible and low cost. The right marketing efforts can cost as much as the technology. Patents can raise startup valuation by investors by as much as a million dollars, and will attract acquisitions rather than copycats. New technology is so exciting it sells itself.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

Agile VC

APRIL 17, 2011

Now that Google’s acquisition of ITA is closed, following lenghty FTC review, it would appear Kayak is poised to proceed with their IPO in the coming months. =. paying for travel data from ITA or others (customers acquisition spend is not included in COGS). Post-money valuation probably no higher than $12M (2).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

YoungUpstarts

JUNE 20, 2016

This required high operational costs like round the clock staff, abundant paper supplies and couriers. The switch from PDRs to VDRs resulted in deal cycles and increased valuations. Some of these benefits include the following: Reduced cost of operations. Mergers and Acquisitions. percent between 2009 and 2014.

Software Review 100

Software Review Technical Review Due Diligence Security 100

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. That said, nothing is cost-free. More complex cost of capital calculation. Yes, typically preferred equity.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

View from Seed

DECEMBER 6, 2018

It’s almost exactly 5 years since Aileen Lee first coined the term “unicorn” in reference to startups with $1 billion+ valuations. To analyze what’s become of the OG Unicorns, it’s first worth noting that at the time of the 2013 post about 2/3rds of the 39 on the list had already been realized via IPO or $1B+ acquisitions.

IPO 120

IPO Valuation San Francisco Silicon Valley 120

Duct Tape Marketing

FEBRUARY 3, 2022

Since 2015, her company, Barney, has guided over 150 media, marketing & tech companies through acquisitions. 10:25] Are you seeing anybody selling parts of their companies rather than an entire acquisition? [11:19] All those things go into, you know, setting what that, that valuation is outside of just the financials.

Entrepreneur 79

Entrepreneur Technical Review Cofounder Valuation 79

The Startup Magazine

SEPTEMBER 10, 2019

Asset valuation. The concept of asset valuation may seem counterintuitive, but it is an important idea. Most financial valuation formulas value an asset by discounting the asset using the cost of capital (interest rate) to the present day. Compared to Accounting, Finance is ruthlessly forward looking. Alpha generation.

Founder 117

Founder Valuation Dividend Startup 117

View from Seed

SEPTEMBER 14, 2021

Q: What is going to happen to the cost of capital? Q: What is the opportunity cost of not being in tech? Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. How have more recent vintages performed?

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

The Startup Magazine

APRIL 24, 2020

Whether you’re interested in selling a website you built from scratch, or want to sell your Amazon-based B2C brand, there are many different baseline factors that go into determining an appropriate website valuation number. While it’s true that valuations can get quite technical, the basics are relatively easy to understand.

eCommerce 91

eCommerce Valuation B2C Revenue 91

Hunter Walker

MAY 13, 2023

Especially in the early days of mobile/iOS engineering, if you hired strong technical talent into your early stage company, you basically created an acquisition outcome floor. Those who do, often believe they can hire from the open market without the hassle of an acquisition. of the time my answer is no f **g way].

Early Stage 117

Early Stage Cap Table Acquisition Sales 117

Cracking the Code

FEBRUARY 23, 2011

The sales productivity ratio (measured with the Customer Acquisition Cost or CAC ratio) are also fairly similar for the two groups (except for a small cap dip in Q4 09) and therefore do not explain the difference Why is scale so much rewarded by public markets? Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 101

Software Review Technical Review Valuation Europe 101

Austin Startup

OCTOBER 15, 2017

What seems to be the best way to create customers and revenue may result in a business model that is out of vogue with the investment world and shortchanges you on enterprise valuation. If you deliver exactly the same results at the same net cost to the customer via a SaaS product, you may get a tech multiple 10X higher.

Technical Review 48

Technical Review Software Review Nevada Silicon Valley 48

Startup Professionals Musings

MAY 1, 2019

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.

Silicon Valley 215

Silicon Valley Bankruptcy Metrics Valuation 215

Growthink Blog

OCTOBER 22, 2013

That is, they ask whether the time and money it would take to build a similar business from scratch is greater than the cost to buy the business from you now. How easy will it be to run your business after acquisition? For example, do they expect 50% of your customers to leave after the acquisition?

Acquisition 101

Acquisition Revenue Technical Review Valuation 101

Both Sides of the Table

APRIL 14, 2012

Did raising money at a $500 million valuation help secure the $1 billion deal? “it’s smart to use an impending investment valuation to drive a higher acquisition valuation” I would like to amend her statement slightly to read, “it’s smart to use an impending investment valuation to drive an higher acquisition.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Up and Running

AUGUST 29, 2014

A major cause of business failure is not having enough cash available to cover all startup costs and operate for at least a year. A Certified Public Accountant (CPA) is a state licensed professional who offers various accounting, auditing, tax, financial analysis, business valuation and consulting services.

Small Business 87

Small Business CPA Government North America 87