Startup Professionals Musings

JUNE 2, 2013

I like the work just published by Bob Rice in “ The Alternative Answer ,” which does a great job of summarizing the investment universe, starting with the “conventional” stocks, bonds, and real estate, but moving on through more esoteric alternatives, including hedge funds, private equity, real assets, managed futures, and finally venture funding.

Cram Down 269

Cram Down Angel Investor Intellectual Property Venture Capital 269

Steve Blank

MARCH 16, 2016

Luckily in the last quarter of the 20 th century a new source of money called risk capital emerged. Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash. At its core Venture Capital is nothing more than a small portion of the Private Equity financial asset class.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Steve Blank

SEPTEMBER 14, 2009

Posted on September 14, 2009 by steveblank Over the last 30 years Wall Street’s appetite for technology stocks have changed radically – swinging between unbridled enthusiasm to believing they’re all toxic. One of the biggest mistakes entrepreneurs make is misunderstanding the role of venture capital investors. What Do VC’s Do?

Silicon Valley 223

Silicon Valley IPO Technical Review Venture Capital 223

ReadWriteStart

JUNE 1, 2020

Funding might be a need in some cases — but it’s not an absolute necessity. ? The business should be self-sustainable. The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

OCTOBER 7, 2022

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 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Steve Blank

MARCH 17, 2020

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? To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. What does my business model look like now?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Team, Product, Traction, Business Model and Market.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Startup Professionals Musings

JANUARY 4, 2020

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.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Steve Blank

MARCH 31, 2014

As the venture capital business has come roaring back in the last 5 years, startups are awash in available capital. Companies horde cash and squeeze the most revenue and margin from the money they use. Instead of measuring success in dollars of profit, …firms focus on measuring capital efficiency.

Private Equity 326

Private Equity Metrics China Intellectual Property 326

YoungUpstarts

JULY 16, 2020

The COVID-19 crisis has caused many businesses of all sizes to re-evaluate their plans and pivot their business models. If your company has been suffering from losses or is exposed to risks because of this pandemic, you may want to consider changing your business entity. Sell Shares/Take On Business Partners.

LLC 255

LLC Bankruptcy Venture Capital Stock 255

Up and Running

SEPTEMBER 19, 2017

For a business that anticipates needing, for example, $500,000 in startup capital, that means that best-case scenario Klemm can expect to give up half of his business’s common stock (and an even larger percentage of control of the business once the deal’s fine print provisions are considered).

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . 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

VC Cafe

SEPTEMBER 16, 2021

I’ve also shared my insights with Techcrunch, in “ 5 creator economy VCs see startup opportunities in monetization, discovery and much more “ As venture capital investors, one question we think about a lot at Remagine Ventures is “where are the opportunities for startups in the Creator Economy?”

Startup 207

Startup Social Media Venture Capital Audio 207

Steve Blank

JULY 19, 2010

I’ll offer that both entrepreneurs and VC’s have the wrong model for founding CEO equity compensation. The customary vesting model has founders vest their stock over 4-years , and when the founding CEO gets in over their head the VC’s bring in professional management. It’s About Finding the Business Model.

Vesting 255

Vesting Liquidity Event Venture Capital Founder Vesting 255

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! But when it’s all over and they define the era of this mini run up in stock prices I suspect they’ll include 2011 in the “over valued&# category. Those with strong business models suddenly stand out when the tide goes out. and profits!

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Steve Blank

JULY 15, 2010

If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Here’s why.

Venture Capital 299

Venture Capital IPO Liquidity Event Entrepreneur 299

Steve Blank

JUNE 23, 2016

Here are four reasons: First, companies bought into the false premise that they exist to maximize shareholder value – which said “keep the stock price high.” As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

www.inc.com

SEPTEMBER 24, 2011

Why Arizona Bay started taking stock from its customers instead of cash. Dave Graham Business Venture Capital Private Equity GlobalLogic Inc. Venture Capital Firms. During the first Internet boom, companies that provided services to tech start-ups were all too happy to work for stock.

Arizona 40

Arizona Equity Iowa Venture Capital 40

abovethecrowd.com

FEBRUARY 24, 2015

As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. You must subtract it from your top-line revenue. You should not pay a net revenue multiple for a gross revenue disclosure.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Steve Blank

JUNE 10, 2010

The only capital available to them was their own savings and what they could borrow from relatives. Both my parents worked as hard as any Silicon Valley entrepreneur but with a different definition of a successful business model; when they made a profit, they could feed our family. All searching for a sustainable business model.

Silicon Valley 329

Silicon Valley Entrepreneur United States New York City 329

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. Your runway is impacted by the absence of projected revenue. And they bring capital to each of these markets (and take from the others) based upon the risk/reward.

Valuation 117

Valuation Cap Table Startup Later Stage 117

Steve Blank

JUNE 15, 2010

The role of a founding CEO in a startup searching for a business model is radically different than a CEO building and growing a company. Certain VC’s like the new class of Super-Angels and small VC funds specialize in the early stage of a startup where you are searching for a business model. Your potential business model?

Founder 231

Founder Vesting Later Stage Early Stage 231

Up and Running

MAY 23, 2016

In fact, SaaS industry revenue is projected to grow from $49 billion in 2015 to $67 billion in 2018, a compound annual growth rate of approximately eight percent. The one-page pitch format is also more suitable for SaaS businesses that are constantly testing new ideas. The business model. venture capital.

Software Review 74

Software Review Software Delaware Forecast 74

Seeing Both Sides

JULY 21, 2014

Our stock naturally plummeted. But many years later, I began to appreciate that one of our core flaws was our business model. As a result, the full revenue for each deal was recognized in that quarter as soon as the software was shipped. This allowed our revenue to skyrocket from $1.8 million to $22.5

Revenue 54

Revenue Valuation Churn Rate Portfolio 54

abovethecrowd.com

OCTOBER 17, 2013

While I am extremely proud of that team’s accomplishments (the parent company recombined Nordstrom.com in 2002 and the direct division now has revenue of over $1.25B and is the fastest growing unit inside of Nordstrom ), I built a healthy respect for the complexities and difficulties of managing women’s fashion inventory.

eCommerce 62

eCommerce Technical Review North America San Francisco 62

Steve Blank

MARCH 18, 2011

VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. With Netscape’s IPO , there was suddenly a public market for companies with limited revenue and no profit. 1970 – 1995: The Golden Age. The New Exits.

Internet 334

Internet IPO Silicon Valley Agile 334

YoungUpstarts

DECEMBER 5, 2018

These companies are changing how we live and work, and they are not only creating tremendous value but are introducing new business models. All these companies sourced venture capital (VC) to launch their companies. Even with Venture Capital, Most Startups Fail. What is a gazelle?

Startup 182

Startup Acquisition Portfolio Venture Capital 182

www.chubbybrain.com

SEPTEMBER 28, 2011

If you are an entrepreneur seeking funding, try our free Funding Recommendation Engine to identify a list of angels, venture capital and state grant programs that best match your business. spent $20 million to get back to the same revenue that I had when I was CEO. We had the wrong business model.

Software Review 79

Software Review Startup Technical Review Vesting 79

Both Sides of the Table

MARCH 1, 2011

Of course, monetization of search became one of the best business models in the history of business. After AltaVista, Mike spent a year doing business development for USA Networks ( now IAC – Interactive Corp ). Part 2/3 of Interview: Mike Joins Quigo as CEO, Sells it to Aol for $340 Million [ Minutes: 13 – 30 ].

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Hearpreneur

DECEMBER 8, 2019

Entering our 4th year of business, we doubled our headcount, became a certified B Corporation, and released our revenue model which aligned with our becoming a 1% for the Planet member. So I put together my business model and my offerings, and then I started pitching clients that were purpose-driven and who I believed in.

Entrepreneur 120

Entrepreneur Technical Review Vertical Las Vegas 120

A Smart Bear: Startups and Marketing for Geeks

MARCH 11, 2014

Those customers are fairly easy to sign up, but if I look at where most of the money comes from, and those are the larger licenses of five or ten users, that is according to your definition then the small businesses and small businesses include actually the Mexican Stock Exchange, Chamber of Commerce. For venture capital, right?

Technical Cofounder 220

Technical Cofounder Cofounder Software Review Management 220

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.]   Say I invest $1MM in a company and receive 40% of the stock.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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! 2002, the stock price went from $17.5

Software Review 48

Software Review Software Technical Review Cloud 48

Reid Hoffman

MARCH 19, 2019

And from a financial perspective, any investor would be better off buying stock in Amazon than buying and share of a corner bookshop; if you invested $100 in Amazon’s 1997 initial public offering (IPO), those shares would have been worth about $120,000 in 2018. Publishers and authors (like O’Reilly and us) also benefit from Amazon’s success.

Cofounder 28

Cofounder Business Model IPO Non-Compete 28

Growthink Blog

MAY 10, 2012

If it's not your plan to get venture capital down the road, then you'll probably stop in Stage 2-receiving enough funding to boost your marketing, sales, and infrastructure to grow organically from there to the point where you are satisfied or ready to sell. Each round may raise between $5 million and $20 million or more.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Growthink Blog

JUNE 14, 2017

For recurring revenue, Uber. Trailing twelve month revenues for the company is over $100 million and the company was valued at over $1.2 For recurring revenue, Uber. Because of their well-publicized internal troubles and management dysfunction, Uber these days is everyone's favorite business punching bag. Warby Parker.

Disintermediation 59

Disintermediation Business Model B2B Revenue 59