David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. Gio expects to get to about $500,000 by the end of this year and asked me for advice on venture funding. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Austin Startup

FEBRUARY 13, 2019

Not necessarily the entire business, but at some point, something will fail and you’ll either learn from it and grow or it will be the beginning of the end. Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Startup Professionals Musings

SEPTEMBER 5, 2016

The reality is that over 80 percent of new businesses will never attract venture capital or Angel funding, according to experts , and there are many good reasons for skipping that painful and distracting process. Don’t quit your day job until the revenue is flowing. Outside funding is not a startup entitlement.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? To reduce the impact of dilution, the expectation is that startup valuation should more or less double between the pre-seed to the seed, and seed to series A (ideally backed by reasonable traction/ revenue multiples).

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Startup Professionals Musings

MARCH 7, 2015

On the other hand, venture capital organizations typically look for needs that exceed $2 million. What business milestones have you met? If your financial model projects a negative cash flow in this period of $400,000, you should buffer this amount by 25 percent, and ask for $500,000.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Tim Keane

JANUARY 12, 2010

  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.]   Pre-bubble Siliicon Valley deals were popularly valued at multiples of revenue.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Austin Startup

MARCH 23, 2017

Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders. I point back to Fred Wilson’s blog, specifically a guest post by Andy Sack on revenue based financing. However as the above links show, debt is a trickier subject.

Dilution 54

Dilution Equity Warrant Distribution 54

Both Sides of the Table

SEPTEMBER 12, 2010

The actual investment professionals (partners) are too busy to call companies that they’re interested in so they basically outsource it. But how can you really outsource judgment to young, smart people who have often never worked in businesses? I have nothing against these young people – the dialers.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Up and Running

APRIL 24, 2018

If you’ve never written a business plan before, take a look at these sample medical startup business plans. At first, you need to focus on developing your business model and validating it. That’s why having a revenue-minded focus from the early stages helps to secure funding.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

Professor VC

JUNE 20, 2011

I took a look back at our original financial model we presented to VCs in 2004. The business model (OEM through broadband and home security companies for mass distribution) if not specific product functionality has remained largely the same. The Most Important Venture Capital Statistic. So what does this all mean.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

www.paulgraham.com

OCTOBER 23, 2010

Microsofts originalplan was to make money selling programming languages, of all things.Their current business model didnt occur to them until IBM droppedit in their lap five years later. They get the same kind of stock and get diluted the same amount in futurerounds. A rich companyis one with large revenues.

Startup 105

Startup Cofounder Software Stock 105

Both Sides of the Table

FEBRUARY 14, 2016

Put simply, it’s really hard to build a strong company when all of your competitors are giving away free s**t fueled by venture capital chasing winner-take-all returns. forward revenue for SaaS businesses when in the years before it had been less than 5x. Plus, down rounds trigger anti-dilution provisions.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

One Million by One Million is a global initiative that aims to nurture a million entrepreneurs reach a million dollars each in annual revenue and beyond by 2020, thereby creating a trillion dollars in global GDP and ten million jobs. This is where numerous ventures fail. 1M/1M Program has a bold mission. on a global scale.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116

Up and Running

DECEMBER 9, 2014

The question is what metrics do you most rely on to understand your business’s health? Two, revenue. Give us an answer and let’s move on to finding working capital. If you’re looking for five million dollars, you should be thinking institutional capital. You heard a little bit from others about that.

Small Business 95

Small Business Finance Forecast Metrics 95