Startup Professionals Musings

DECEMBER 11, 2022

Non-credible funding request or unreasonable valuation. Investors are looking to buy a chunk of the business, not the product. They need to know how much money you need, and what portion of the current business you are willing to offer for the investment. Future unproven projections don’t set today’s valuation.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Startup Professionals Musings

NOVEMBER 21, 2016

They know it’s especially hard to provide a financial return with a free business model. Investors fear negative vibes will infect the business. Investors read this as an excuse for no real intellectual property or innovation. Declare a $10 million valuation with no revenue or customers.

Intellectual Property 120

Intellectual Property Valuation Technical Review Equity 120

Startup Professionals Musings

NOVEMBER 4, 2011

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. This is called “validating the business model.”

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

Startup Professionals Musings

JUNE 17, 2011

It doesn’t prove your business model of pricing, distribution, and support. Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Startup Professionals Musings

NOVEMBER 14, 2010

Creating a strong value proposition requires substantial customer insight, thorough study, an understanding of the real value of intellectual property, thoughtfulness, and several iterations. Unfortunately, we read far more poorly written business plans at Main Street than good ones. Participation.

Intellectual Property 265

Intellectual Property Balance Sheet Phoenix Arizona 265

Startup Professionals Musings

JULY 22, 2020

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Startup Professionals Musings

SEPTEMBER 23, 2010

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. This is called “validating the business model.”

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224

Startup Professionals Musings

APRIL 12, 2020

Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. Never take your eye off the ball in business. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive.

Intellectual Property 310

Intellectual Property Startup Bankruptcy Viral 310

Startup Professionals Musings

MAY 22, 2010

It doesn’t prove your business model of pricing, distribution, and support. Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

Startup Professionals Musings

OCTOBER 19, 2015

Outside investors are most interested in scaling a proven business model, not research and development. Technology that can’t be sold for a profit or appeals only to early adopters is not a viable business. Intellectual property is a business issue, not a technical issue.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

Steve Blank

MARCH 31, 2014

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. The second class will be firms with a demonstrated ability to continually innovate and reinvent their business models.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Startup Professionals Musings

MARCH 14, 2020

Non-credible funding request or unreasonable valuation. Investors are looking to buy a chunk of the business, not the product. They need to know how much money you need, and what portion of the current business you are willing to offer for the investment. Future unproven projections don’t set today’s valuation.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Startup Professionals Musings

JANUARY 10, 2016

Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. Never take your eye off the ball in business. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive.

Business Model 120

Business Model Intellectual Property Startup Bankruptcy 120

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

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.” Registered intellectual property adds value.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Startup Professionals Musings

AUGUST 19, 2018

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Angel Investor 184

Angel Investor Intellectual Property Investment Bankers Private Equity 184

Up and Running

OCTOBER 13, 2014

Either way, he says, these smaller firms gain major clients that fund further growth and drive their valuations higher. The Bottom Line for Small Businesses. Coley Brown, of VisionMine, said that open innovation helps some smaller companies get acquired, while others have their technology licensed by the larger firms they work with.

Intellectual Property 106

Intellectual Property Philadelphia Small Business California 106

Startup Professionals Musings

JULY 27, 2018

This implies high odds of a scalable business, simply needing an investment to lead to success. Business model showing costs, pricing, and margins. Intellectual property and sustainable competitive advantage. Of course, you wouldn’t include this data in your customer product pitch.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

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. No intellectual property. Intellectual property is also often the largest element of early-stage company valuations for professional investors.

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. No intellectual property. Intellectual property is also often the largest element of early-stage company valuations for professional investors.

Intellectual Property 274

Intellectual Property Entrepreneur Viral Early Stage 274

Startup Professionals Musings

DECEMBER 24, 2012

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. This is called “validating the business model.”

Angel Investor 260

Angel Investor Intellectual Property Elevator Pitch Angel Groups 260

Startup Professionals Musings

JULY 4, 2014

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Angel Investor 232

Angel Investor Intellectual Property Investment Bankers Private Equity 232

Startup Professionals Musings

AUGUST 1, 2016

Non-credible funding request or unreasonable valuation. Investors are looking to buy a chunk of the business, not the product. They need to know how much money you need, and what portion of the current business you are willing to offer for the investment. Future unproven projections don’t set today’s valuation.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Startup Professionals Musings

AUGUST 8, 2016

The best differentiation is a patent or other intellectual property that also provides a barrier to entry. Validate your business model on real customers. Giving free beta copies of your solution to customers to elicit testimonials does not validate a business model.

Intellectual Property 120

Intellectual Property Entrepreneur Elevator Pitch Exit Strategy 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. No intellectual property. Intellectual property is also often the largest element of early-stage company valuations for professional investors.

Intellectual Property 183

Intellectual Property Startup Viral Early Stage 183

Startup Professionals Musings

AUGUST 7, 2015

How the solution and business model work to fund the business. Investors will impatiently expect a winning business model, customer segment definitions and volume projections. 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, 2016

At this point, most Angel investors and a few early-stage VCs will be happy to talk, assuming you have the business model validated, and a large opportunity. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Matching 120

Matching Angel Investor Intellectual Property Investment Bankers 120

Startup Professionals Musings

JANUARY 9, 2015

Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. Never take your eye off the ball in business. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive.

Intellectual Property 120

Intellectual Property Startup Bankruptcy Viral 120

Gust

DECEMBER 16, 2012

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. Free trials don’t count.

Angel Investor 179

Angel Investor Intellectual Property Elevator Pitch Angel Groups 179

Startup Professionals Musings

AUGUST 13, 2012

Do describe your intellectual property and “secret sauce”. Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Include a current valuation estimate. Skip the technical jargon and hyperbole.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Transformify

JULY 23, 2018

Business valuation or investor background is among the expert evaluator’s selection criteria. The good news is that startups from all sectors of the economy can apply and leverage on novel combinations of existing business models and technologies. What is your intellectual property policy?

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66

Startup Professionals Musings

MAY 13, 2011

Do describe your intellectual property and “secret sauce”. Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Include a current valuation estimate. Skip the technical jargon and hyperbole.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

www.inc.com

SEPTEMBER 24, 2011

Internet and Online Business. Business Software. Intellectual Property. In the past few years, hundreds of small companies have been snatched up by private equity firms willing to agree to ever-rising valuations. Computer Security. Telecom and Wireless. Technology. INNOVATION. Managing Creativity. The 2011 Inc.

Arizona 40

Arizona Equity Iowa Venture Capital 40

NZ Entrepreneur

DECEMBER 5, 2019

Intellectual property (IP) can help support a competitive advantage in the market and provide a valuable asset that can help grow your business. Many businesses rely on patents for the defensive aspect of establishing and protecting a core technological competency, and as a valuable asset for valuation purposes.

IP 62

IP Non-disclosure Agreement Intellectual Property New Zealand 62

Startup Professionals Musings

NOVEMBER 2, 2018

The best advantage includes intellectual property to provide a barrier to entry or incent acquisition. Investors look for a team with business, financial, marketing, and operational skills, as well as a social passion. Employs a profitable business model with customer traction.

Intellectual Property 48

Intellectual Property Initial Public Offering Merger Acquisition 48

Gust

AUGUST 5, 2012

Do describe your intellectual property and “secret sauce”. Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Include a current valuation estimate. Skip the technical jargon and hyperbole.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Professor VC

APRIL 7, 2011

In a convertible note structure, Im penalized for increasing your valuation. Instead of getting a 2-3x multiple from seed to Series A, I get a discount off of the Series A, so Im better off financially with a lower valuation. You may say, if you are investing in the next facebook or google, why care about valuation?

San Jose 36

San Jose Technical Review Angel Investor Valuation 36