Steve Blank

MARCH 31, 2014

Companies horde cash and squeeze the most revenue and margin from the money they use. Look at the valuations of companies like Tesla, Illumina, and Twitter. The first will be commodity businesses that are valued for their ability to execute their current business model. Innovation.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Hunter Walker

JULY 18, 2022

Multiples dropped in public and private markets, growth expectations were cut, and business models with high spend for promise of future ROI became quite unfavorable. Multiples dropped in public and private markets, growth expectations were cut, and business models with high spend for promise of future ROI became quite unfavorable.

Valuation 117

Valuation Cap Table Startup Later Stage 117

Hearpreneur

AUGUST 5, 2020

The global automakers and suppliers will be adapting their business models accordingly, forming new partnerships and investing in new technologies. With marketers ready to pivot on a moment’s notice to find a strategy that is successful, digital marketing is definitely ripe for disruption. 16- Coffee. 19- Silvertech.

Technical Review 155

Technical Review Software Review Entrepreneur China 155

Startup Lessons Learned

SEPTEMBER 22, 2008

Lessons Learned by Eric Ries Monday, September 22, 2008 The three drivers of growth for your business model. The AARRR model (hence pirates, get it?) He also has a discussion of how your choice of business model determines which of these metric areas you want to focus on. Choose one.

San Francisco 167

San Francisco CPA SEM CTO Hire 167

Version One Ventures

JUNE 29, 2017

What I missed in most of this commentary was the fact that Matt Salzberg and his team had created a company with over $800m in revenues and a $2b valuation in a short 5 (!) This is an incredible entrepreneurial achievement that very, very few founders ever get to.

IPO 143

IPO Stock Valuation Business Model 143

Up and Running

MAY 17, 2017

The sad reality is that many business acquisitions do not work out as hoped. Either the person selling their business gets significantly less than they planned, or they are not able to find a buyer at all. Savvy buyers will definitely ask: What has your business done in the months preceding the acquisition?

Acquisition 92

Acquisition Technical Review Revenue Exit Strategy 92

crowdSPRING Blog

APRIL 8, 2012

As college graduation weekends and summer business incubator announcements loom, I thought I would take a few minutes to consider the connection between the entrepreneurship and academia. Entrepreneurs, by definition, take an idea or a concept and strive to make that idea into a operating business.

Software Review 112

Software Review Entrepreneur Incubator Valuation 112

View from Seed

APRIL 30, 2015

” Venture debt gives you those options, and particularly for companies that wind up doing well, then on your same cash-out date, you’d likely have achieved a better milestone thanks to fueling your spend, which would translate into a better valuation. Traction and revenue? Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

VC Cafe

SEPTEMBER 16, 2021

Let’s start with a short definition: [the creator economy] is defined as the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.

Startup 207

Startup Social Media Venture Capital Audio 207

Steve Blank

NOVEMBER 5, 2009

Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. Is there a profitable business model? The Traditional VC Pitch Entrepreneurs who pursue the traditional product development model don’t have customer data to answer these questions. Can it scale?”

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

Duct Tape Marketing

FEBRUARY 3, 2022

So there was a definitive end date when I wanted this process to be done. You're selling your culture, you're selling your client list, you're selling your business model, but that's it, you have no tangible also, you know, agencies, don't typically service clients in a localized market. The process to sell was brutal.

Entrepreneur 79

Entrepreneur Technical Review Cofounder Valuation 79

Feld Thoughts

AUGUST 25, 2015

None of these companies fit Mr. Neumann’s definition of the era’s venture deals and each generated returns we would welcome today. There are five key risks in any deal: Market, Product (a/k/a technology), Management, Business Model, and Capital. Michigan Cottage Cheese: Yoplait Yogurt. This isn’t correct either.

Venture Capital 70

Venture Capital SBIC Technical Review Silicon Valley 70

Startup Professionals Musings

AUGUST 7, 2015

How the solution and business model work to fund the business. Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. Investors will impatiently expect a winning business model, customer segment definitions and volume projections.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

AUGUST 13, 2012

Clearly define the customer, channel, and revenue model associated with this solution. Explain the business model. In this section, you need to be passionate about revenue, profit, and volume growth. Soft responses from your candidates will definitely kill your credibility. Industry & market sizing.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

reidhoffman.org

NOVEMBER 12, 2013

Friendster’s valuation set the tone for the entire social networking space. Press and analysts characterized LinkedIn in one of two ways: “LinkedIn is an interesting niche that might be worth paying attention to” or “LinkedIn is the Friendster for business”. we had no revenue. Investors see a lot of pitches.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

www.inc.com

SEPTEMBER 24, 2011

But with the help of Grahams company, which specializes in creating tech systems for start-ups, Jumpstart grew to more than $50 million in revenue--enough to make it an attractive acquisition for media conglomerate Hachette Filipacchi. Arizona Bay has also blended equity payments with revenue-sharing deals. Graham liked the idea.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Professionals Musings

MAY 13, 2011

Clearly define the customer, channel, and revenue model associated with this solution. Explain the business model. In this section, you need to be passionate about revenue, profit, and volume growth. Soft responses from your candidates will definitely kill your credibility. Industry & market sizing.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. multiple fell down to ~2.2x

Software Review 48

Software Review Technical Review Valuation Portfolio 48

View from Seed

FEBRUARY 19, 2015

Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. Think more about business models. I’ve seen many companies with great products die because a great product is not necessarily a great business. I will definitely do that.

Founder 120

Founder Startup Cofounder Business Model 120

Agile VC

NOVEMBER 6, 2013

So their revenue figures, pre IPO financing and ownership, and other info is all widely available. I thought I’d provide a little analysis of Twitter based on their S-1, but also strive to put it in a broader context of other consumer internet businesses and where we are in the current tech cycle.

IPO 194

IPO Aggregator B2B Internet 194

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 23, 2012

Except I disagree with that definition of “success.” After I sold Smart Bear, that division has increased revenue and profit every year, for five years, even through the 2008/2009 economic disaster. GroupOn’s engine that turned capital into revenue growth was a form of force-feeding rather than building a product).

IPO 240

IPO Flash Bootstrapping Private Equity 240

www.pakman.com

SEPTEMBER 27, 2012

At the scale of Facebook, you could have your users share almost anything and still be able to build a large business, purely by loading the site up with lots of advertising that is (at very least) rudimentary targeted. At that scale, you can reach billions of dollars in revenue. But they do $50B in revenue. Matt DeLoca.

Social Media 47

Social Media Vertical Advertising Distribution 47

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. They plan to franchise the model (presumably including selling equipment plus a certification program). post money valuation. implying a $600k post money valuation.

Pre-Money Valuation 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

Up and Running

DECEMBER 9, 2014

Josh, you’re working with small business owners every day. What do you think is the biggest mistake that they’re making when it comes to investing in their businesses? I think of it as a way to basically have someone else or some other tool do the chores part of your business. Two, revenue. Three, growth rate.

Small Business 95

Small Business Finance Forecast Metrics 95

Gust

AUGUST 5, 2012

Clearly define the customer, channel, and revenue model associated with this solution. Explain the business model. In this section, you need to be passionate about revenue, profit, and volume growth. Soft responses from your candidates will definitely kill your credibility. Industry & market sizing.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

techcrunch.com

FEBRUARY 19, 2010

According to VCs, there’s been a 65% decrease in up-rounds (where a company gets a bigger valuation) in the last six months and more than 60% of those polled expect a longer wait for an exit. That means the vast majority of privately held companies are still very dependent on venture money to stay in business. Add to this that 72.7%

Venture Capital 62

Venture Capital Technical Review Sweat Equity Valuation 62

Cracking the Code

SEPTEMBER 2, 2008

The Deutsche Bank report has a very interesting chart on the topic presenting the Free Cash Flow margins vs. the revenue growth four years post IPO for select software leaders: As you can see, with 20% Free Cash Flow margin and a 50% growth rate, Salesforce is well positioned in the pack! SaaS 13 Index Valuation. My Investments.

Software Review 48

Software Review Software Technical Review Cloud 48

Startup Professionals Musings

APRIL 22, 2010

Clearly define the customer, channel, and revenue model associated with this solution. Explain the business model. In this section, you need to be passionate about revenue, profit, and volume growth. Soft responses from your candidates will definitely kill your credibility. Industry & market sizing.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Cracking the Code

OCTOBER 10, 2008

Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Farming is also often overlooked, but can help grow customer accounts and revenues from 30% upwards (if successful). Great list! Michael Kassing.

Software Review 48

Software Review North America Europe Metrics 48

Lightspeed Venture Partners

OCTOBER 22, 2012

The company has gotten off to a fast start, $150k in revenue in the first two months, with all the marketing coming from social media. This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). There was a lot of discussion about competition.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

The Equity Kicker

OCTOBER 8, 2012

According to Paul most startups should look at revenue growth, but active users is a good proxy for companies that aren’t charging their customers (yet). Many of those milestones will be growth oriented, but they often centre on hitting round numbers – e.g. $10k or $100k per month in revenues or 1m active users.

Silicon Valley 149

Silicon Valley IPO eCommerce Valuation 149

David Teten

FEBRUARY 9, 2015

I’ve listed below the points I recommend you cover when pitching your business to early-stage investors, including but definitely not limited to ff Venture Capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.” Business Model.

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60

Lightspeed Venture Partners

DECEMBER 10, 2012

Revenue is driven by children’s parties, which cost $600-$4,000 for a two hour party for 15 kids, which apparently is the market price for kids parties in LA. The space can host 6-9 parties per weekend, and they generated $350,000 in revenue last year. Almost all of the sharks got indignant about valuation.

Covenant 162

Covenant Warrant Southern California Los Angeles 162

Ben's Blog

APRIL 28, 2010

Looking across these nearly 50 companies, the study finds that founding CEOs consistently beat the professional CEOs on a broad range of metrics ranging from capital efficiency (amount of funding raised), time to exit, exit valuations, and return on investment. He’s made bold changes to key policies such as privacy and platform.

Technical Review 78

Technical Review Cofounder Technical Cofounder Software Review 78

Software By Rob

AUGUST 18, 2010

The only thing that seemed to be consistent about my growth was that my revenue was relatively flat while my user base kept growing. This turned out to be a good move since it doubled their revenue that month. He has a great stats page that shows everything from monthly revenue to the breakdown of users by plan type.

Software Review 78

Software Review Software Revenue Cofounder 78

Entrepreneurs-Journey.com by Yaro Starak

JANUARY 21, 2011

Although I knew I would be working in (not on) the business to some extent, the work turned out to be more than I anticipated, at least initially. Investment in small businesses require knowledge of transactions and the related aspects such as business valuation, due diligence, deal structuring / financing, contracts, etc.

Internet 80

Internet Technical Review Stock Due Diligence 80