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). My Investments.

Software Review 101

Software Review Technical Review Valuation Europe 101

Startup Professionals Musings

JUNE 26, 2016

Should they focus on increasing revenues and profitability, or entice more and more users with “free” services, to increase their valuation. It’s only been in the last ten years that social media companies, like Facebook and Twitter, have achieved market valuations in billions of dollars, while clearly sacrificing revenue to gain users.

Revenue 145

Revenue Valuation Startup Viral 145

Startup Professionals Musings

AUGUST 10, 2014

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 246

Revenue Entrepreneur Valuation Viral 246

David Teten

MAY 1, 2013

There are some automated valuation tools on the web like valuate.com and estibot.com that use search traffic, backlinks, and other data to appraise the value in the domain name. Still, deciding on the right price for a target domain name is almost entirely an exercise in negotiation, not valuation.

Naming 114

Naming Semantic Venture Capital Startup 114

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. Underwriters realized that as long as the public was happy snapping up shares, they could make huge profits from the inflated valuations. Carpe Diem.

Internet 334

Internet IPO Silicon Valley Agile 334

Cracking the Code

NOVEMBER 10, 2009

While poised with a limited number of transactions this year, the world of public Cloud Computing and SaaS companies has been marked by two events in the past few months: the acquisition of Omniture by Adobe and the high profile IPO of LogMeIn, a leading provider of PC remote access and support with a very interesting freemium model.

Software Review 48

Software Review Technical Review IPO Cloud 48

Cracking the Code

MARCH 12, 2010

The SaaS growth recovery does not seem to take a "V" shape 2) Sales productivity is ramping up: bottom was hit in the first half of 2009 However, the sales and productivity of the group, measured by the median "Customer Acquisition Cost ratio" or "CAC ratio", seems to be recovering more steeply. SaaS 13 Index Valuation. My Investments.

Software Review 63

Software Review Technical Review Cloud Forecast 63

Cracking the Code

OCTOBER 8, 2009

But does Larry hate cloud computing that much or is he hiding a potential future acquisition of Salesforce.com? Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Popular Media: the key to viral marketing. A funny video of Larry Ellison, the CEO of Oracle on Cloud Computing. My Investments.

Software Review 48

Software Review Cloud Technical Review Venture Capital 48

Reid Hoffman

MARCH 23, 2021

For example, if you haven’t achieved product-market fit, instrumenting every aspect of customer acquisition is overkill. I’ve seen entrepreneurs make the mistake of focusing all their efforts on customer acquisition when they also needed to fix a leaky funnel or customer churn. Just track metrics that help you improve the product.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

View from Seed

JANUARY 11, 2017

Banks invested because they wanted access to our large and growing consumer base or to try to catch the lightning in the bottle of our virally growing payments business. . PayPal took on these investors in small part because it gave us an imprimatur in the stodgy and regulated world of financial services.

Strategic Investors 120

Strategic Investors Post-Money Valuation Seed Stage Cofounder 120

The Equity Kicker

MAY 15, 2012

When I read on Techcrunch this morning that Quora has raised $50m at a $400m valuation I thought “‘wow’, that’s interesting, I haven’t heard much about them recently, I wonder how they are getting on”. they were incredibly thorough – e.g. going the extra mile to support contact imports from a huge variety of services (to maximise virality).

Viral 108

Viral Framework Aggregator Retention 108

The Startup Toolkit

NOVEMBER 4, 2011

Vision for B2C, virality-driven community. The financials immediately jump out when we talk about term sheets: what’s the valuation? The former means your friends won’t hear about your company until the acquisition. Requires team relocation. First-time VCs, building on their own entrepreneurial success. your website.

Term Sheet 31

Term Sheet Dilution Participating Preferred B2C 31

View from Seed

MARCH 8, 2016

If you’re building a product that can grow virally—a social network, for example—brand is almost certainly less important at launch than product. It adds value when it comes to customer acquisition, yes, but there are also a number of intangible benefits: hiring, partnerships, and even a higher valuation.

Seed Stage 120

Seed Stage Conversion Startup PR 120

The Startup Toolkit

NOVEMBER 4, 2011

Vision for B2C, virality-driven community. The financials immediately jump out when we talk about term sheets: what’s the valuation? The former means your friends won’t hear about your company until the acquisition. Requires team relocation. First-time VCs, building on their own entrepreneurial success. your website.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. The game has started getting some traction already, and has a good virality index.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. I have not found a thorough platform for due diligencing all aspects of a potential investment.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

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. The numbers of potential buyers had decreased dramatically both because large companies were shedding jobs and because many past buyers simply lacked resources to make acquisitions.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

The Next Web

SEPTEMBER 29, 2013

For example, Dollar Shave Club created a video that went viral. You know cost of acquisition at a low scale, so instead of 10 users you decide to test with 100 or 300 users. But when your crazy idea does work out, the upside is huge. When you hit, it’s likely to be profitable consistently. Now let’s talk about the metrics.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Steve Blank

FEBRUARY 26, 2020

At the end of this post, we’ll discuss the valuation at each step (how much the investors value your company and therefore how much of it you need to give up to get this money) and how much revenue you should generate at each step.). You need to begin to “instrument” your customer acquisition process with analytics. 2M in 18 months.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Up and Running

JANUARY 14, 2022

Our major challenge was how do we compete with companies that have billion-dollar valuations, millions in investor funding, and millions in revenue? Because of this, we couldn’t compete directly with them on the paid acquisition front using the resources available to us at the time. Our limited budget made this approach unsustainable.

SEO 104

SEO Software Review Search Acquisition 104

YoungUpstarts

FEBRUARY 14, 2017

You have lots of sign ups, you’ve smashed your acquisition targets and the first slide of your pitch deck looks great! It now has a multi-billion dollar valuation. There are three main strategies used today which are viral (word of mouth), sticky (they keep coming back) and paid growth models. Engine of growth pivot.

Technical Review 157

Technical Review Architecture Revenue Channel 157

Both Sides of the Table

DECEMBER 5, 2010

After a few acquisitions they offered many of the services you think about as foundations to social networks today. MySpace would liked to have owned YouTube but didn’t have the public stock valuation to purchase them at the price that Google did. They had mail, IM, groups, answers, etc.

Social Network 318

Social Network Networking Internet Technical Review 318

Reid Hoffman

JANUARY 26, 2021

One common mistake is for entrepreneurs to simply select whichever venture capital firm is offering the highest valuation. All viral products are somewhat spammy, but I think we’ve become too spammy in the following ways, and here are some techniques we should be using instead.” David helped make LinkedIn a better product and company.

Startup 36

Startup Equity Early Stage Green 36

betashop.com

OCTOBER 8, 2012

It has been awesome, flattering, and humbling to see that post went viral and has been seen by so many thousands of people — mainly aspiring entrepreneurs — and has been translated into many languages. Never, ever, choose your investors based on valuation. 10M post-money valuation = $100M target.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Cracking the Code

MARCH 10, 2008

Lets call this ratio the Customer Acquisition Cost ratio or CAC ratio. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Popular Media: the key to viral marketing. S&M productivity (CAC ratio) for the SaaS 13 Index. My Investments. CornerstoneOnDemand. anecdotes. (13). Software 2.0:

Sales 79

Sales Software Review Marketing Technical Review 79

Cracking the Code

OCTOBER 10, 2008

The top performing SaaS companies typically achieve annual customer renewal rates above 90% - with most of the churn due to death (bankruptcies) or marriage (acquisitions) - and over 100% renewals on a dollar value basis due to up-sells into this installed base. upfront acquisition cost, making the CLTV equal to $2.5-$0.7= means a $0.7

Software Review 48

Software Review North America Europe Metrics 48

Cracking the Code

FEBRUARY 4, 2008

Among others, I would quote the Bladelogic IPO, the acquisition of Postini by Google for $625m, the two largest SaaS deals in history signed by Cornerstone OnDemand (160k and 350k seats), Eloqua almost doubling its revenues and LinkedIn adding more than 10m users. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). anecdotes. (13).

Software Review 48

Software Review South Korea IPO Portfolio 48

abovethecrowd.com

JUNE 2, 2021

Paypal famously offered customers $5 to invite a friend, who would then also get $5 as part of a highly successful viral marketing campaign (they actually started at $20, and then reduced it to $10 and then ended at $5). They can’t sell the stock at this multiple and therefore that valuation is not available to them.

IPO 82

IPO Customer Matching Silicon Valley 82