Both Sides of the Table

DECEMBER 27, 2011

You have to understand whether they’re likely to yield revenue growth in the near term OR whether you have access to cheap enough capital to fund your losses until your investments pay off. They have have raised $2-3 million, built a product that has some amount of market traction and got to annualized revenues of around $1 million.

Startup 418

Startup Revenue Technical Review Flash 418

Both Sides of the Table

NOVEMBER 3, 2009

and the subsequent acquisition sprees of companies like Google, Yahoo!, Let’s take your revenue line. The COGS (costs of goods sold) tells me about how big your customer acquisition costs will be. How will your costs scale as your revenue scales. Or lower revenue assumptions. portfolios. Here’s why.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Both Sides of the Table

JUNE 28, 2018

While this reaction to such a valuation is understandable, to anybody who has seen the meteoric rise in consumer demand and actual revenue the valuation is much less surprising and may turn out to be quite conservative. I think it’s quite possible that Bird could be the fastest growing company to reach a billion dollars in run rate revenue.

San Francisco 256

San Francisco Valuation Technical Review Los Angeles 256

Both Sides of the Table

MAY 28, 2018

There are many things a VC is looking for in reviewing your business plan but beyond things the like the quality of revenue, margins, OPEX and CAPEX there’s a really simple rule I call, “Cash In, Cash Out, Milestones Achieved.” Usually that’s the point in the meeting where a VC realizes that this meeting isn’t going to go very well.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. 500k had come through the last acquisition. For some reason the industry of bankers who try to buy or sell businesses work in what is called the “M&A (mergers & acquisitions) Industry.&# I’ve never understood this.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

SEPTEMBER 19, 2011

The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge. It’s the most profound book I’ve read on thinking about how the Internet is changing business.

Los Angeles 329

Los Angeles Revenue Retention Acquisition 329

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. This is actually the norm.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

Both Sides of the Table

MARCH 25, 2016

It turns out that to build a successful company you ultimately need this strange thing called “revenue” that people don’t just hand you: You need to earn it. And there’s this other thing called “gross margin,” which shows the quality of your revenue. How much ad revenue does TripAdvisor make?

Startup 150

Startup Seed Money DC Software Review 150

Both Sides of the Table

JANUARY 11, 2014

If you are early in a platform (Zynga to Facebook, AngryBirds to iOS, Maker Studios to YouTube) you catch a major marketing wave where acquiring customers and growing revenue is exponential. It’s why some companies are testing whether building applications on KIK might lead to better customers acquisition.

Technical Review 384

Technical Review Hockey Stick SEM Channel 384

Both Sides of the Table

JANUARY 19, 2015

YouTube takes too high of a revenue split (45% vs. 30% that Apple and many other distribution companies take – FWIW, YouTube argues this is because their costs are much higher since they host and stream the video). It just happens to be large, dominant and willing to share revenue with you. Take for example, an eCommerce company.

SEM 150

SEM Los Angeles Silicon Valley Acquisition 150

Both Sides of the Table

JULY 1, 2015

“the ecommerce company gained fauxmentum by raising artificially high amounts of venture capital and spent lavishly on customer acquisition despite long payback periods and questionable LTV” __. In the ecommerce arena I see some great companies spending heavily on customer acquisition. __. faux·men·tum. Summary.

Balance Sheet 150

Balance Sheet eCommerce Venture Capital Acquisition 150

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

Both Sides of the Table

JULY 29, 2010

People buy companies for 3 primary reasons: 1) they want the management team / talent 2) they want the technology or 3) they want the market traction (revenue, customer base, profits, etc). We covered the week’s M&A deals : Playdom and Kongregate and why Disney and GameStop made the acquisitions. they take time!!

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Both Sides of the Table

NOVEMBER 9, 2012

You need to understand motives of buyer (talent, product, revenue, strategic purchase) and where you fit in. Both can hurt you in an acquisition. Much as tech companies & VCs hate to admit it. People hate to acknowledge that location of team matters. Often it does. Outsourcing can be cheap.

Technology 323

Technology PR Startup IPO 323

Both Sides of the Table

SEPTEMBER 15, 2013

Along with Greycroft Partners we were the first investors in Maker Studios 3 years ago when the company had no revenue and limited infrastructure. but not that this justifies take a 45% revenue share. Industry averages for talent revenue shares are about 70% with top talent making even more. ” YouTube takes 45%.

Networking 366

Networking Media Distribution Video 366

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.” Christin goes on. A nice play if you can make it.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Both Sides of the Table

SEPTEMBER 1, 2016

If a company has significant revenue you might value it based on some industry multiples but WhatsApp had very limited revenue. So literally the day before the Facebook acquisition Sequoia’s fund could have been significantly less valuable on paper.

LP 264

LP Jordan Cofounder Limited Partner 264

Both Sides of the Table

JULY 10, 2010

The importance of the conference is that it assembles most of the top privately held early-to-mid-stage technology companies in the country (and some globally) as well as most VC’s, growth equity funds and corporate development departments from large industry players looking at technology acquisitions. Revenue of ~$160mm in 2008.

IPO 242

IPO Venture Capital Private Placement Cofounder 242

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

Both Sides of the Table

FEBRUARY 28, 2018

We seed funded a company a few years ago called Parachute Home that has grown 180% CAGR (compounded annually) and is now doing tens of millions of revenue with very little capital raised. companies that have to spend too heavily on customer acquisition). I’ll give you some of Parachute’s repeat rates later in the post. Get Physical!

Curation 296

Curation Los Angeles Differentiation Channel 296

Both Sides of the Table

JUNE 20, 2014

By the time I funded them they were doing 400 million video views a month, had 40 million subscribers and had already become a powerhouse in ad sales / revenue working with marquee advertisers including: P&G, Budweiser, Nestle, Ford, Frito Lay and Honda. This was a marked change from the previous leadership of YouTube.

South America 291

South America Colombia Mexico Vertical 291

Both Sides of the Table

MAY 4, 2010

We discussed whether investing in the second largest player in a category makes sense given that Groupon is 10x the revenue, 3.5x But LivingSocial is reportedly doing around $180,000 per day in gross revenue. If this figure is accurate – it’s certainly a very large business even when you look at net revenues.

IPO 236

IPO .Net Venture Capital Strategic Investors 236

Both Sides of the Table

MAY 23, 2012

In an over-funding environment companies are encouraged to eschew revenues in a land grab to acquire eyeballs, clicks, page views or whatever other vanity metrics give VCs the false comfort that they’re sitting on a gold mine. The opportunity to transact at the point of purchase increases the sheer number of revenue opportunities.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

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

Both Sides of the Table

JUNE 18, 2010

Software Helps companies rapidly convert unstructured online data and content into structured data assets that can be used to create new products, revenue Streams, and enhance current online data sets. Potentially limits acquisition opportunities for independent ad networks.

Venture Capital 225

Venture Capital Non-Compete Vertical Europe 225

Both Sides of the Table

FEBRUARY 21, 2010

This no doubt led to the acquisition of AdMob by Google and Quattro by Apple. There are also people like Clicker and OVGuide who are trying to capture the “video portal&# space where they can command referral revenues in the way that Yahoo! initially captured the Internet portal revenues by aggregating eyeballs.

Advertising 284

Advertising Las Vegas Affiliate RSS 284

Both Sides of the Table

MAY 4, 2015

In the United States alone the self storage market is worth $24 billion in annual revenue and is totally fragmented with the largest player having around 10% of the total market. Imagine a business that is a consumer or small-business product offering but with a revenue stream that is like a SaaS business.

Technical Review 150

Technical Review San Diego Dallas Sacramento 150

Both Sides of the Table

MARCH 1, 2011

Quigo Lands Overture as Client, Rejects Their Acquisition Offer. Around 2003, Quigo was doing tens of millions of dollars in revenue with two main products: a ready-to-use, search engine marketing solution for advertisers called FeedPoint and a contextual advertising platform for publishers called AdSonar.

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Both Sides of the Table

APRIL 12, 2018

A critical component to building a successful business is being able to capture ongoing revenue from consumers who feel they are getting incredible value and continue to feel good about paying. Having recurring revenue allows you to keep the original purchase price down, which in turn increases sales. it was a personal mission.

Security 247

Security Los Angeles Silicon Valley Video 247

Both Sides of the Table

OCTOBER 6, 2010

Everyone has their own definition of momentum (user numbers, revenue, channel partners, biz dev deals, whatever). So NEVER talk about early exits, quick flips, tuck-in acquisitions, previous interest shown by acquirers, etc., But if you identify investors with whom you’d like to work here’s my advice: 1.

Early Stage 360

Early Stage Startup Venture Capital Seed Stage 360

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

Both Sides of the Table

DECEMBER 5, 2010

billion in annual subscription revenues not including advertising or eCommerce). After a few acquisitions they offered many of the services you think about as foundations to social networks today. Companies like GeoCities & Tripod built tools that let you publish web pages that could be discoverable by others.

Social Network 318

Social Network Networking Internet Technical Review 318

Both Sides of the Table

FEBRUARY 13, 2011

We will invest pre-revenue and even pre-product if we have discovered the right team in the right kind of market. And we also talked about what it’s like to work with Steve Case. In that way, you could say that we are stage agnostic. I run Revolution’s VC investments. It was founded by four guys we knew and had worked with.

Cofounder 277

Cofounder Merger Founder Venture Capital 277

Both Sides of the Table

JUNE 12, 2010

-Company grew by more than “400% each year” for past few years [assume growth metric = revenues]. Competition: Chegg (has raised $144 in debt and equity)—estimated by Steven Carpenter ( TechCrunch ) to be 10x more unique visitors than BookRenter (during peak book renting seasons) with nearly $140mm in revenues for 2010.

Venture Capital 217

Venture Capital Los Angeles Oakland Asia 217

Both Sides of the Table

APRIL 12, 2015

DataSift passes 95% of the data revenue back to Twitter. Twitter announced its acquisition of our competition Gnip almost a year ago. This article on TechCrunch states that Twitter only gets a 20% cut on DataSift reselling its data almost making you believe this is why Twitter wants to cancel its deal. Ninety five. Some evidence?

Syndicate 150

Syndicate Syndication Semantic Artificial Inteligence 150