Steve Blank

MARCH 31, 2014

Cheered on by finance professors, Wall Street analysts, investors and hedge funds, companies have learned how to make metrics like Internal Rate of Return look great by one; outsourcing everything, two, getting assets off their balance sheet, and three only investing in things that pay off fast. Act Like a Startup.

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

Tim Keane

MARCH 9, 2011

How to prepare a sales forecast for a business plan » March 09, 2011. How should I finance my new venture? It’s a deceptively simple question:  what is the optimal way to finance a new startup?   Sometimes, the bonus in bootstrapping is that the venture finds it doesn’t need acceleration financing. 

Finance 83

Finance Bootstrapping Startup Equity 83

Startup Professionals Musings

JUNE 6, 2010

Obviously, these companies still need money to get started, or finance growth, just like a for-profit company. The advantage is no time and effort is spent searching and preparing for the other alternatives, and no repayment terms or collateral are required. Individual and institutional donations.

Angel Investor 143

Angel Investor Technical Review Exit Strategy Equity 143

Austin Startup

FEBRUARY 13, 2019

Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. Our strategic investor had a major impact on the way we shaped our business model, and we owe a lot of our success to his advice. Face it, you don’t know everything?—?even

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

YoungUpstarts

JANUARY 6, 2014

I came of age with the digital revolution, and by applying my marketing expertise with the science of search, I learned how to start companies. I remain the major shareholder in a number of what we consider “built-to-last” companies, all with strong valuations and ROI potential. By Dan Soha, Five Mill Ventures.

San Francisco 154

San Francisco Business Model Silicon Valley Coder 154

ReadWriteStart

SEPTEMBER 10, 2010

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. I call it drip-financing. In 1M/1M, our preferred financing strategy is customers. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

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. With this decline, the average EV/08 rev.

Software Review 48

Software Review Technical Review Valuation Portfolio 48

Austin Startup

AUGUST 20, 2017

Keep the valuations consistent with company progress. Messy cap tables can come back to haunt you when you do a financing or sell the company. The bottom line is that the pedigree of your investors will have much to do with your ultimate valuation and with your enjoyment of the startup experience. Are the logistics manageable?

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Startup Professionals Musings

DECEMBER 5, 2016

Too many entrepreneurs put their best creative thinking into the startup idea, and believe that the business implementation simply requires following tried and true business practices. To win, you need to think outside the box to deliver a better customer experience, business model, and new positioning.

Retention 120

Retention Valuation Equity Analytics 120

Steve Blank

JANUARY 4, 2010

In fact, Google’s offer for $15 Million was equal to the highest valuation from the venture firms. They used Customer and Agile development to search for a scalable and repeatable business model to become a large company. They grow their business via profits or traditional bank financing. Take No Prisoners.

Hockey Stick 276

Hockey Stick Venture Capital Startup Cofounder 276

Steve Blank

JULY 15, 2010

Most of the startups they invested in either died by running out of money before they found a scalable business model or ended up in the “land of the living dead” by never growing (failing to Pivot.). New, agile and adroit venture firms with new business models have emerged to deal with the reality that 1) web 2.0

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. While Ive made at least my share of mistakes taking equity in lieu of pay, I continue to see this as a key part of my business model.

Equity 40

Equity Technical Review San Jose Stock 40

Tim Keane

JUNE 22, 2006

Testing to Increase Valuations. If lowered risk translates into higher valuations when the business either attracts investors or is sold, then lowering risk for the lowest possible dollars creates very high returns. If customer interest can be obtained in a live test involving revenue, valuation may rise again.

Valuation 60

Valuation Wisconsin Angel Investor Startup 60

Professor VC

JANUARY 17, 2008

While currently free to angel groups, their business model revolves around aggregating the angel investment data. It is several thousand dollars, which is a lot of cash for a struggling entrepreneur in search of seed funding. Another comment which probably deserves more discussion is around valuation.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Up and Running

AUGUST 17, 2022

Investors want to have a real shot at growing your valuation when they write you a check. They want your business to be able to scale up. This will be difficult if your business model doesn’t easily scale. If the answer is no, you may need to revisit your business model. Find alternative funding sources.

Venture Capital 146

Venture Capital Intellectual Property Angel Investor Bootstrapping 146

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. Try charging customers for your product when you have 12 competitors giving the product away free finances by $20 million of VC. The Exit Problem. Bottom of the sales funnel.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Cracking the Code

DECEMBER 2, 2006

Today, VARs are the key to the SMB segment and their business model is collapsing, opening new opportunities for them and for technology providers. To survive, VARs need to change their business model and move from product sales to services. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). Yahoo Finance.

Software Review 48

Software Review Technical Review Europe Software 48

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”. Second, understand the broader financing climate. Why is it valuable?

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

David Teten

DECEMBER 3, 2019

Coalesce address the more general problem of searching through large data sets for best fits. Pacer is useful to search prior litigation, bankruptcies, etc. Lean Case provides standard business models & metrics, so you can apply a standard approach to business planning, modeling, and profitability tracking.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Both Sides of the Table

MARCH 1, 2011

Mike believes the reason AltaVista didn’t become Google ( despite their market leadership position ) was because they didn’t focus on search. Instead, they tried to use their search position to offer a portal like Excite and Yahoo! Of course, monetization of search became one of the best business models in the history of business.

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Professor VC

FEBRUARY 12, 2015

I''m not about to compare the current state of private company valuations to the real estate bubble or even the dot-com bubble. No, the question today is not whether these unicorns are viable businesses. The question is whether the valuations can be supported. For the most part, they have proven that. or a market cap of $800M.

Las Vegas 28

Las Vegas IPO Pre-Money Valuation Valuation 28

Steve Blank

FEBRUARY 26, 2020

Every year I teach classrooms full of students who leave class understanding the basics of how to search for product/market fit—and thinking their next goal is to “get funded.”. Btw, the definition of each startup financing stage has changed in the last decade. Series B is about proving your net revenue model (can you be profitable?).

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

View from Seed

JANUARY 11, 2023

Think partners coming together to tap their own networks for your follow-on rounds of financing. The Clarity of the Terms : how will your company be financed? Every accelerator also finances its cohort companies differently. Complicated agreements with MFN clauses and confusing future financing obligations are opaque at best.

Programming 156

Programming Sacramento San Francisco Founder 156

Cracking the Code

DECEMBER 16, 2006

Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Small and medium businesses. (2). In search of Europe's next tech stars. Yahoo Finance. S&M productivity (CAC ratio) for the SaaS 13 Index. Note: high CAC ratio means high productiviy (see blog post for definition).

Software Review 48

Software Review Silicon Valley Technical Review Software 48

Reid Hoffman

JANUARY 26, 2021

You can listen to the podcast here, or search for Greymatter Podcast in your podcatcher. One common mistake is for entrepreneurs to simply select whichever venture capital firm is offering the highest valuation. One of the things a financing round brings is an opportunity to strengthen the startup’s overall network.

Startup 36

Startup Equity Early Stage Green 36

Steve Blank

NOVEMBER 5, 2009

Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. Is there a profitable business model? How many are there?

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

Tim Keane

APRIL 12, 2006

What’s your attitude about “next round” financing? valuation than the previous round. It is used by some investors who like the deal but can’t come to terms on valuation. How do you approach valuation? If the entrepreneur offers 25% of the company for $1 Million, this implies a valuation of $4 Million.

Entrepreneur 60

Entrepreneur Valuation Sweat Equity Common Stock 60

www.paulgraham.com

OCTOBER 23, 2010

The sixth largest center for oil, or finance, or publishing?Whatever If you get an offer from a reputablefirm at a reasonable valuation with no unusually onerous terms,just take it and get on with building the company. [ They made search work, then worried about how to makemoney from it. Why is the falloff so sharp?

Startup 108

Startup Software Review Hiring Detroit 108

www.pakman.com

SEPTEMBER 27, 2012

Obviously, traffic found on ecommerce sites is the prime example of this and search traffic is a close second, but increasingly Pinterest is proving itself to be a massive source of high-converting traffic. General news carries the lowest CPCs whereas specific verticals like healthcare and finance command higher CPCs. Andres Moran.

Social Media 47

Social Media Vertical Advertising Distribution 47

Tim Keane

APRIL 24, 2006

Reducing risk for the next round of financing yields a higher investment value. So, look at every expense, plan and project from the point of view of reducing the risk in the company and making the valuation that much higher in the next round. Reducing risk for the next round of financing yields a higher investment value.

Wisconsin 60

Wisconsin Angel Investor Bootstrapping Venture Capital 60

Both Sides of the Table

FEBRUARY 14, 2016

Most venture capitalists who have been in this business for a long time foresaw this correction and have been talking about it privately for the better part of the last year or two. I have been talking about my concerns about valuations for the past couple of years because, well, they’ve been rising very rapidly the past two years!

Valuation 150

Valuation Down Round Startup Later Stage 150

Reid Hoffman

JANUARY 19, 2021

You can listen to the podcast here, or search for Greymatter Podcast in your podcatcher. I’ve encountered many of the different ways boards can interact under different circumstances, whether it’s problem executives, problem investors, CEO misbehavior, financing issues, business crises and more. In the early days of the Web 2.0

Startup 36

Startup Cofounder Advertising Hiring 36

Professor VC

DECEMBER 8, 2015

one company running out of cash and another with cash but searching for a business model). I think we will see more of these in 2016 and beyond as IPOs are still far and few between and unicorns struggle to justify their stratospheric valuations. Like CPF, Kilowatt also provides solar financing services to consumers.

Merger 28

Merger LP IPO Redemption 28

Cracking the Code

SEPTEMBER 2, 2008

If that were the case, most of the Cable and Wireless companies who have been using a similar business model would have gone bankrupt a long time ago and Saleforce would not have 20% FCF margins today. It is true that understanding this new business model is hard for a traditional software incumbent, as this interview demonstrates.

Software Review 48

Software Review Software Technical Review Cloud 48

Cracking the Code

OCTOBER 10, 2008

You validated our business model and added huge value to our efforts. However, as we know from the cable industry, subscription businesses can be very profitable over time. Together, CMRR, Cashflow, Churn, CAC, and CLTV make up the “5 C’s of SaaS Finance. Michael Kassing. Let me just say "Thanks".

Software Review 48

Software Review North America Europe Metrics 48

techcrunch.com

FEBRUARY 19, 2010

Tweet View Comments Sarah Lacy Feb 19, 2010 Pepperdine has a new study out that attempts to shed some light on the clubby, shadowy world of private finance. Researchers polled experts in lending, mezzanine capital, private equity, venture capital and private businesses themselves. Think Again. A lot of the stats weren’t surprising.

Venture Capital 62

Venture Capital Technical Review Sweat Equity Valuation 62