Both Sides of the Table

NOVEMBER 14, 2017

How long does it take me to pay back my original customer acquisition costs? Throughout the first year we made many fixes and saw our revenue base in these markets accelerate so we felt we were ready to attack Los Angeles, amongst the most important storage markets in the country. How profitable is my product or service?

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. We want money to make some acquisitions (investors would prefer to fund M&A if they know specific deals – not to encourage bad behavior. We want a strong balance sheet (um, ok.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

This is going to be BIG.

JANUARY 18, 2024

They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. They might have a more flexible time horizon than a VC because the money doesn’t come from a fund with a limited lifespan. The first thing you need to get straight with a high net worth individual—what is their return expectation?

.Net 88

.Net Cap Table Startup Technical Review 88

YoungUpstarts

MAY 6, 2019

How much revenue are you generating on an annual basis? If you are getting funded for the first time, which means that you have not diluted the shares of your company, you will be receiving Series A funding. Further Customer Acquisition. You need to improve your customer acquisition process. Acquisition.

Startup 113

Startup Technical Cofounder Merger Early Stage 113

Both Sides of the Table

SEPTEMBER 16, 2010

As I’ve highlighted I believe we’re in a unique period similar to 2005-08 where the biggest tech firms of Silicon Valley (and some media companies) are scooping up small software companies as “talent acquisitions&# versus accretive revenue / profit generators. avoid being diluted). This is actually the norm.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

Hunter Walker

JANUARY 2, 2017

The total value of these deals might look higher than when a tech company makes an acquihire but the premium tends to go to retention rather than the cap table (especially since (a) the acquirer might not be seen as an ‘attractive’ place to work and (b) there’s assumption of less equity upside post-acquisition).

Technical Review 115

Technical Review Cap Table Acquisition Startup 115

ReadWriteStart

JANUARY 27, 2011

I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. Jeff also described a compelling in-game offer-based customer acquisition model that is proving quite effective for him. million in revenue.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 26, 2019

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. Find and focus on one reliable distribution mechanism before diluting your time diversifying. Sales” is not a dirty word.

Restful 202

Restful Founder Revenue Acquisition 202

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. These usually play a role in the very early stage of your business, primarily pre-revenue. Reasons for funding. ? Incubators and Accelerators. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Hearpreneur

JANUARY 30, 2022

Thanks to Adam Wood, Revenue Geeks ! #7- Many businesses are discovering that the key to successful marketing is interacting two-way with customers, not simply shouting marketing messages at increasingly dilute audiences. . With rising costs due to inflation, more businesses are laser-focused on revenue than ever before.

Entrepreneur 122

Entrepreneur Green Technical Review Social Media 122

Both Sides of the Table

JUNE 17, 2017

70–80% of the costs of most startups are employee costs so what you’re really talking about when a company is unprofitable is that they are growing their staff ahead of their revenue. Revenue When I look at an income statement I start by focusing on the revenue line. You need to understand the “quality” of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. That's why, I advised Gio to keep going with further execution on his business and build more revenue traction.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Berkonomics

APRIL 26, 2018

Speaking of which, those companies with cash in the bank and cash available are the ones to scoop up the bargains, from suppliers and in acquisitions especially during tough times. A fast-growing but undercapitalized company is not highly valued in an acquisition. And oil is a lubricant…. Such bargains; so little time.

Dilution 90

Dilution Acquisition Early Stage Book Value 90

Both Sides of the Table

APRIL 14, 2012

“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.” You just said, “nobody would take 1-2% dilution.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Startup Professionals Musings

JANUARY 6, 2021

In reality, too many choices actually dilutes customer interest in your existing market, and makes your job of production, marketing, and support much more complex. In most companies, maintaining momentum requires the right strategic partners and acquisitions, in lieu of short-term price adjustments and special sales.

Technical Review 400

Technical Review Technical Cofounder Advisory Board Cofounder 400

ReadWriteStart

JULY 18, 2011

Every company has a forecast for how it will get to an arbitrary $100 million in revenue and they all hit it on year five. At this stage, the founders pay for the dilution of the shares and the funders will take 20 to 25% of the company. What's interesting is the assumptions that go into that vision of scaling.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

Both Sides of the Table

JULY 17, 2018

" Revenue doesn't pay your bills, GM does  —  @msuster 2/ Founders obsess with revenue as a vanity metric. Some even grow "bad" revenue just to show growth. Payback periods on customer acquisition way more important to you in the near-term. Ultimately it matters a great deal.

Founder 242

Founder Dilution Software Review Later Stage 242

Austin Startup

NOVEMBER 12, 2017

A frequent metaphor I use in customer acquisition, fundraising, or any kind of deal making is that you as the founder and promoter should present the finished meal on the dining table and not drag your counterparts into the kitchen. Is third-year revenue of $10M good or bad? A price of $2 per share means nothing in itself.

Term Sheet 48

Term Sheet Technical Review Due Diligence Merger 48

Austin Startup

MARCH 23, 2017

3/20 : danprimack provided detail on Wal-mart/Jet.com’s acquisition of ModCloth, and how substituting (rather than supplementing) debt for equity can cause problems. Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders.

Dilution 54

Dilution Equity Warrant Distribution 54

Pascal's View

DECEMBER 19, 2012

I’d like to know what percentage of those acquisitions are takeunders versus takeovers —a takeunder in this case means that the consideration paid is less than invested capital. That’s the key statistic on the health of the acquisition market from the 42%-of-the-market-seller’s perspective. That’s for sure!

Acquisition 31

Acquisition Merger Dilution Aggregator 31

Austin Startup

MAY 23, 2019

These typical formats would be better known as ‘on-game’ or ‘extra-game’, because they exist as ill-fitting bolt-ons to the games they dilute. When they are understandably timid with their strategy, everyone loses: players have to sit through irrelevant ads, developers make paltry revenues, and advertisers’ acquisition suffers.

Advertising 48

Advertising Clickthrough Redemption Dilution 48

The Startup Lawyer

AUGUST 22, 2011

By paying your investor a dividend (rather than having dividends accrue and be paid out at acquisition or other typical payable events), you are simply paying back the investor with his own money. This is something you might see in a late stage private equity financing with a company that has a history of generating revenue.

Angel Investor 99

Angel Investor Dividend Dilution Cofounder 99

Berkonomics

APRIL 4, 2019

These include election or re-election of board members if required by the bylaws of the corporation, approval of any increases to stock option plans (which would dilute the worth of shares outstanding,) and approve any additions to the capital stock authorized to be issued.

Stock Options 48

Stock Options Balance Sheet Stock Common Stock 48

Lightspeed Venture Partners

SEPTEMBER 21, 2013

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 seems big, the actual implication is only between 5% and 10% dilution since the round size is small.

Pre-Money Valuation 161

Pre-Money Valuation Valuation Dilution Distribution 161

Gust

DECEMBER 23, 2011

By the way, there’s a very beautiful thing about organic growth, aside from the absence of dilution: it usually forces you to try to monetize early. Similarly, start calling VCs if your customer acquisition costs can only be recaptured over a substantial period of time. Then you’ll know whether you can safely bypass outside funding.

Intellectual Property 127

Intellectual Property Balance Sheet Dilution Bootstrapping 127

The Equity Kicker

MAY 14, 2012

achieving first revenues. breaking through revenue thresholds – e.g. run-rates of £1m, £5m, £20m and so on. identifying a scalable customer acquisition channel. demonstrating profitable customer acquisition (usually by analysis of unit economics). achieving first revenues. signing distribution deals.

Finance 118

Finance Valuation Venture Capital Dilution 118

Occam's Razor

MAY 2, 2017

The very best analysts distill, rather than dilute. tearsofpain One way of removing silos and focusing on the entire business is to leverage Acquisition, Behavior and Outcome metrics. Outcomes: Revenue | Ideas Funded Behavior: Path Length | Cart Abandonment Rate Acquisition: Assisted Conversions | Share of Search.

Metrics 141

Metrics Acquisition eCommerce Analytics 141

Berkonomics

FEBRUARY 7, 2011

Speaking of which, those companies with cash in the bank and cash available are the ones to scoop up the bargains, from suppliers and in acquisitions especially during tough times. A fast-growing but undercapitalized company is not highly valued in an acquisition. email readers continue here.] Such bargains; so little time.

Dilution 66

Dilution Acquisition Early Stage Book Value 66

Both Sides of the Table

MARCH 11, 2010

Your revenue will take longer to ramp then you think. They can fund a deal if necessary and valid at the time you present an acquisition target to them. It’s best if you can raise at minimum 12 months’ cash and even better 18 months’ cash. 24 months for most tech startups is usually too much money. - add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

ConversionXL

FEBRUARY 21, 2018

A number capable of signaling growth, like absolute count of conversions, conversion rate, total revenue, revenue per visitor, cost per acquired customer, among others. Most tools will not be capable of identifying the same user across different devices or browsers, diluting the value of customers who have multi-device journeys.

Programming 117

Programming Audience Analytics Metrics 117

Berkonomics

DECEMBER 6, 2010

Because the valuation is now a requirement under Rule 409a of the Internal Revenue Code, most companies with stock option plans today have fairly valued common stock with known prices per share. It is the same logic larger corporations use when deciding whether to use cash or stock to make an acquisition.

Stock Options 61

Stock Options Stock Warrant Common Stock 61

Berkonomics

APRIL 14, 2012

These include election or re-election of board members if required by the bylaws of the corporation, approval of any increases to stock option plans (which would dilute the worth of shares outstanding), and approve any additions to the capital stock authorized to be issued.

Stock Options 81

Stock Options Balance Sheet Stock Common Stock 81

K9 Ventures

OCTOBER 10, 2017

Seed is the new Series A. (~$2M used get for building product, establishing product-market fit and early revenue). 6M-$15M used to scale customer acquisition and revenue). So the amount of dilution a company will take on still remains the same over the life of the company. Series A is the new Series B. (~6M-$15M

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

ConversionXL

JULY 22, 2021

Identifying and merging content targeting the same or similar keywords; Removing duplicate content that dilutes importance, and; Improving metadata so that users see what they’re looking for in search engine results pages (SERPs). It’s all about helping Google understand your website better so that pages show up for the right searches.

Technical Review 162

Technical Review SEO Software Review XML 162

Both Sides of the Table

MARCH 11, 2011

I thing I’ve learned over the years is that technology purists hate advertising even when it is that revenue stream that truthfully drives much of our industry. IdeaLab has created 75 companies, leading to 8 IPOs, 35 or so acquisitions and more than 5 companies worth in excess of $1 billion.

Product 350

Product Tuvalu Dilution Incubator 350

Gust

OCTOBER 12, 2011

Entrepreneurs generally prefer #2, provided it’s at a valuation that wouldn’t be absurdly dilutive given the amount of notes outstanding. For that reason, investors commonly insist on #3 (or nothing) rather than #2, giving them more flexibility. It’s worth pausing on the definition of the phrase “at the noteholders’ option.”

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107