Steve Blank

MARCH 17, 2020

But next the question is, ‘What happens to my business?”. The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? What does your new business model look like? Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

SoCal CTO

FEBRUARY 2, 2011

A lot of my time is spent helping early-stage companies get to proof points so that they can raise capital. They might have some seed money and are thinking or raising a Series A based on success of an early release (MVP). Think about how you can prove your business model with an MVP. is a requirement.

Valuation 198

Valuation Revenue Pre-Money Valuation Early Stage 198

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

Startup Professionals Musings

SEPTEMBER 30, 2013

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Startup Professionals Musings

DECEMBER 11, 2022

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Startup Professionals Musings

JULY 22, 2020

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. Thus your startup maturity and growth stage is the primary key to success with potential funding sources. Future opportunity size doesn’t count in the early stages.

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Startup Professionals Musings

SEPTEMBER 9, 2010

Every early-stage startup should explore this new funding alternative. Business Week ran a more thorough analysis of this movement a while back, which I am summarizing here. New “up-and-comer” VCs focus on early-stage companies. Technology costs are plummeting, meaning you can do more with less.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

AUGUST 31, 2012

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Startup Professionals Musings

JUNE 17, 2011

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Steve Blank

MAY 19, 2015

Organizational debt is all the people/culture compromises made to “just get it done” in the early stages of a startup. I had lunch last week with Tom, the CEO of a startup that was quickly becoming a large company – last year’s revenue was $40M, this year likely to be $80M maybe even $100 million in ad revenue.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Startup Professionals Musings

MARCH 14, 2020

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Cracking the Code

OCTOBER 1, 2020

The company’s success has been largely driven by its developer-led freemium model, going from Series A funding to a valuation of $2.6B Once we had the user (developer) and the buyer (security team) on board, the freemium model really accelerated and made it quite resilient to this crisis. in just 30 months.

Early Stage 62

Early Stage Open Source Development Team Review Security 62

Startup Professionals Musings

MAY 22, 2010

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

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

Version One Ventures

JULY 20, 2015

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. The main multiple we like to use for marketplace businesses is GMV (Gross Merchandise Volume…the total volume of goods sold on the marketplace). Our assumptions for this valuation: Scale: > $1b GMV. for 2015 GMV.

Valuation 60

Valuation Early Stage IPO eCommerce 60

Austin Startup

FEBRUARY 13, 2019

Convertible debt is best when you don’t yet have revenue or a good sense for your valuation, because it allows you to raise money on the basis that the valuation will be set one to three years in the future, based on execution of the early business model.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

Startup Professionals Musings

AUGUST 19, 2018

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. Thus your startup maturity and growth stage is the primary key to success with potential funding sources. Future opportunity size doesn’t count in the early stages.

Angel Investor 184

Angel Investor Intellectual Property Investment Bankers Private Equity 184

Feld Thoughts

AUGUST 25, 2015

The key reason for the explosion in capital flowing into the industry, and therefore the large increase in practitioners, had nothing to do with 1970’s performance, early stage investing, or technology. Some were Silicon Valley early stage companies, such as Apple, Quantum, and Masstor Systems.

Venture Capital 70

Venture Capital SBIC Technical Review Silicon Valley 70

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” First priority is real revenue, customers and contracts.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? In smaller funds, ticket sizes tend to be lower, so pre-seed is the only stage where micro funds are able to secure their minimum equity targets. Lower valuations and follow on valuation sensitivity – fundraising is a recurring event in the life of a startup.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

View from Seed

APRIL 30, 2015

Especially in the early stages, so much about the company may change in how they think about product or go-to-market — and change multiple times — before raising an institutional round. NVV: Let’s talk about the seed stage specifically. Traction and revenue? Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

JULY 4, 2014

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. Thus your startup maturity and growth stage is the primary key to success with potential funding sources. Future opportunity size doesn’t count in the early stages.

Angel Investor 232

Angel Investor Intellectual Property Investment Bankers Private Equity 232

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. And EVEN if you ARE an experienced entrepreneur, all but just a few VCs still want to see customer validation, business model validation and traction, before they will invest. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

Startup Professionals Musings

AUGUST 13, 2016

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. Thus your startup maturity and growth stage is the primary key to success with potential funding sources. Future opportunity size doesn’t count in the early stages.

Matching 120

Matching Angel Investor Intellectual Property Investment Bankers 120

Austin Startup

AUGUST 20, 2017

Early stage startups have to survive one day at a time and are often presented with limited choices of the moment that enable them to continue. At early stages you probably don’t have an assembly line and can’t clearly define any particular job. Keep the valuations consistent with company progress.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Startup Professionals Musings

AUGUST 1, 2016

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Startup Professionals Musings

NOVEMBER 11, 2013

The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Business model doesn’t make money. Even a non-profit has to generate revenue (or donations) to offset operating costs. Don’t quit your day job until new revenue is flowing.

Intellectual Property 251

Intellectual Property Startup Viral Early Stage 251

Startup Professionals Musings

OCTOBER 1, 2012

The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Business model doesn’t make money. Even a non-profit has to generate revenue (or donations) to offset operating costs. Don’t quit your day job until new revenue is flowing.

Intellectual Property 274

Intellectual Property Entrepreneur Viral Early Stage 274

Up and Running

JULY 22, 2019

A telling success factor for new businesses looking to make an impact in their industries is whether they can attract investment at an early stage of development. . Attracting investors in the early stages helps bring in new partners that are committed to your business. Start early. Do not be greedy.

Canada 78

Canada Early Stage Valuation Finance 78

Steve Blank

MAY 13, 2010

So I met the entrepreneur and asked him how his search for a business model was going. After a bit more discussion, I discovered the “problem in getting traction” meant revenue was zero. Here’s what I told him: A startup exists to search for a scalable and repeatable business model. I couldn’t agree more.

Founder 199

Founder Cofounder Business Model Customer Development 199

cdixon.org

AUGUST 3, 2012

Some observations: - Thousands of early-stage consumer web/mobile companies were started and funded in last 24 months. A few breakout early-stage consumer hits (Instagram, Pinterest) have reached tens of millions of users in record time. Hence, many early-stage consumer startups are switching to transactional models. -

Bridge Financing 86

Bridge Financing Early Stage Valuation Later Stage 86

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

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. Keep at it. Be pragmatic.

Founder 120

Founder Startup Cofounder Business Model 120

Gust

NOVEMBER 3, 2013

The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Business model doesn’t make money. Even a non-profit has to generate revenue (or donations) to offset operating costs. Don’t quit your day job until new revenue is flowing.

Intellectual Property 183

Intellectual Property Startup Viral Early Stage 183

www.forentrepreneurs.com

FEBRUARY 2, 2010

Business Model I would like to propose that in addition to team, product, and market, there is actually a fourth, equally important, core element of startups, which is the need for a viable business model. It appears that LTV should be about 3 x CAC for a viable SaaS or other form of recurring revenue model.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

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.”

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60