Startup Professionals Musings

AUGUST 4, 2014

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. The challenge is for real co-founders to keep their equity percentage above 50 percent, or they effectively lose control of operational decisions.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

YoungUpstarts

NOVEMBER 20, 2019

They want to see that you have some unique advantage that differentiates your company from others in your industry, and they’d prefer that you have some experience in that industry, which gives you legitimate insight into the problem you’re attempting to solve. You may be able to generate revenue, but VCs want exponential growth.

Technical Review 140

Technical Review Due Diligence Early Stage Differentiation 140

Startup Professionals Musings

SEPTEMBER 9, 2010

It’s higher risk, but higher return, to pick the big winners early, before angels have set unreasonable valuations and restrictive terms. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

Startup Professionals Musings

AUGUST 24, 2016

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. The challenge is for real co-founders to keep their equity percentage above 50%, or they effectively lose control of operational decisions.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

The Startup Magazine

JUNE 2, 2024

By repositioning the brand to leverage these factors, Truong saved Electrolux from possible extinction, and also turned it into a brand to be reckoned with, rising from third place in the North American market to second, and seeing the company’s valuation double. Creativity costs money and innovation drives value,” Truong explained.

North America 143

North America Artificial Inteligence America Valuation 143

View from Seed

AUGUST 17, 2021

You’ll never have the staying power to commit when things get tough or to get really good and build real differentiation if you just keep jumping to the next new thing. 90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Also, being too dogmatic isn’t very fun J.

IRR 206

IRR Dilution Founder Portfolio 206

View from Seed

AUGUST 17, 2021

You’ll never have the staying power to commit when things get tough or to get really good and build real differentiation if you just keep jumping to the next new thing. 90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Also, being too dogmatic isn’t very fun J.

IRR 156

IRR Dilution Founder Portfolio 156

View from Seed

AUGUST 17, 2021

You’ll never have the staying power to commit when things get tough or to get really good and build real differentiation if you just keep jumping to the next new thing. 90% of the airtime around ownership and valuations is focused on what happens when the first check is written. Also, being too dogmatic isn’t very fun J.

IRR 136

IRR Dilution Founder Portfolio 136

Austin Startup

OCTOBER 15, 2017

What seems to be the best way to create customers and revenue may result in a business model that is out of vogue with the investment world and shortchanges you on enterprise valuation. If you deliver exactly the same results at the same net cost to the customer via a SaaS product, you may get a tech multiple 10X higher.

Technical Review 48

Technical Review Software Review Nevada Silicon Valley 48

The Startup Magazine

SEPTEMBER 10, 2019

Asset valuation. The concept of asset valuation may seem counterintuitive, but it is an important idea. Most financial valuation formulas value an asset by discounting the asset using the cost of capital (interest rate) to the present day. Compared to Accounting, Finance is ruthlessly forward looking.

Founder 118

Founder Valuation Dividend Startup 118

Startup Professionals Musings

DECEMBER 1, 2017

The alternatives range from giving the product away for free (revenue from ads), to pricing based on costs, to charging what the market will bear (premium pricing). It’s naïve to think you can sell below costs, and make it up by attracting more customers. Price based on product costs plus margin.

Revenue 166

Revenue Affiliate Advertising Retention 166

Startup Professionals Musings

AUGUST 8, 2016

By profit, I simply mean offering a product or service to customers for a price that exceeds the total costs associated with the solution, thus providing some basis for recovering sunk costs and generating a return for stakeholders. Be able to differentiate your offering from competitors. Without profit there is no business.

Intellectual Property 120

Intellectual Property Entrepreneur Elevator Pitch Exit Strategy 120

YoungUpstarts

APRIL 5, 2018

Now the farmer has locked in that price, with the financial differential offsetting the low cost he gets for the product. A business using foreign currency markets to secure a large sum of money in currency they’ll need later is hedging their bets that currency valuations won’t radically change, but this isn’t financial “hedging”.

Private Equity 145

Private Equity Equity Valuation Differentiation 145

Steve Blank

FEBRUARY 10, 2016

Imagine a chart that’s 300 lines long for each component and you have to strategize when you’re going to buy this component and how far in advance you need to purchase it in order to get the price you need to get your cost of goods sold low enough that you’re going to make money on this thing. .

Silicon Valley 120

Silicon Valley Ohio Columbus Entrepreneur 120

Both Sides of the Table

FEBRUARY 17, 2011

When times are really good for fund raising many teams delay to maximize their valuation. For many businesses you should keep your costs low & your capital raises low until you discover whether you are really on to a big idea where there is market demand. 5 million raised at a $9 million pre-money valuation or 35.7%

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

JUNE 28, 2011

The trend of funding anything from the first $25k to funding $50 million at a billion+ valuation is unlikely to last as the skills and style to be effective at all stages are diverse enough to warrant focus. When I built my first company starting in 1999 it cost $2.5 When I built my first company starting in 1999 it cost $2.5

Venture Capital 334

Venture Capital Software PHP Open Source 334

Lightspeed Venture Partners

SEPTEMBER 21, 2013

The smartphone app that enables this is free but it costs $2.49 to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. pre money valuation and planned to use the money to market the app. pre money valuation). pre money valuation. pre money valuation and a $2.7M

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

YoungUpstarts

APRIL 9, 2015

No two businesses are exactly alike, and there are numerous variables that can affect the overall company valuation. What do those channels cost? Once you have those basic questions answered, you are ready to start your valuation. Do you know what to do to ensure that you get the best possible price for your business ?

eCommerce 100

eCommerce Valuation Acquisition Channel 100

ReadWriteStart

JANUARY 28, 2022

This article will assist you in gaining a fundamental understanding of equity valuation, kinds of equity, and other related topics. To make preferred shares more marketable, different companies issuing the shares include several characteristics that differentiate them from common stock. Importance of equity valuation.

Valuation 108

Valuation Equity Warrant Common Stock 108

Venture Chronicles

MAY 26, 2010

At this point it’s all paper valuation because the stock isn’t liquid so achieving an outcome is a function of executing on the business to achieve a next round of funding or selling it. Those activities cover the full spectrum and are people powered, and people cost money.

Lean 40

Lean Early Stage Valuation Startup 40

David Teten

AUGUST 6, 2015

It’s misleadingly precise to have two digits to the right of the decimal in a CAC/LTV multiple for year 3 of your forecast (“Customer Acquisition Cost”/”LifeTime Value of Customer”). This allows readers to differentiate your file from all of the other files they receive, and also easily track the evolution of your document as it changes.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Startup Professionals Musings

FEBRUARY 13, 2016

This is also the place to first mention patents and any other differentiators that put you ahead of competition. The business model has to clearly define who is your customer, market penetration expected, how much customers pay versus total costs and the investment required to sustain cash flow.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Lightspeed Venture Partners

OCTOBER 22, 2012

This implies a pre money valuation of $1.045M. See my breakdown of week 2 for more on how to calculate pre money valuation.). But it only costs $65k to buy a new food truck, so it is easy for others to enter the market. Most of the sharks dropped out due to valuation being too high, but Robert and Barbara showed interest.

Pre-Money Valuation 101

Pre-Money Valuation Valuation Dilution Differentiation 101

A Smart Bear: Startups and Marketing for Geeks

MARCH 21, 2017

Even if this costs more than 2 years of in-house assembly, it’s still worth it, due to accelerating revenue growth due to up-sales and market-differentiation. Remember this is revenue , not valuation. This acquirer doesn’t care about the financials of the startup. Zoom out to see the strategic decision.

Balance Sheet 242

Balance Sheet Vertical Acquisition Revenue 242

Both Sides of the Table

APRIL 25, 2011

Final message on financing – just be careful not to let your fixed costs get too high as a young services business. Those companies that have a largely variable cost base and make the tough decisions survive for the next boom. In a down market IP can become a huge differentiator. A few problems arise.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Up and Running

APRIL 11, 2016

When asked how he figured out who his target market was, he responded, “I looked at the volume of sales in my city, from the property valuation administrator, and then looked for the ‘sweet spot.’ Cheryl Julcher of Yellow Brick Properties differentiated her brand from competitors by developing a brand of homes called Zoetic Homes™.

Reputation 60

Reputation Cofounder Naming Business Plan 60

This is going to be BIG.

JULY 30, 2015

Second, their dollars dollar cost average at cheaper entry prices. Here's another way to look at it--the cost of capital argument. So, if that was the case, and the market was competitive, why wouldn't each VC be bidding up a round up until the point where they could get the return that matches their own cost of capital?

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

The Equity Kicker

JANUARY 10, 2020

Maybe they’ll pivot to something great eventually, but in the interim period, the valuation goes sideways – and that’s not a good place for a VC to be. Plus, step one of the pivot is to get your costs really low in order to preserve the runway to give yourself a chance of succeeding – so the team has to go. Your first idea has failed.

Partner 68

Partner Early Stage Portfolio Metrics 68

Startup Company Lawyer

MARCH 14, 2010

To differentiate it from typical “Series A&# preferred stock, which comes with certain expectations with regard to rights. Given that the Series Seed is issued at a fairly low valuation, anti-dilution protection is probably not that important, as a “down round&# from a low valuation in the Series Seed is unlikely.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

The Equity Kicker

JULY 8, 2019

This is what brings us to the second big difference: the cost of Applied Venture is too large to finance from a standard VC management fee. . Different funds finance the cost of these teams with a differing weighting of asking portfolio companies to pay for services, larger than normal management fees, and reduced compensation for partners.

Portfolio 84

Portfolio LP Venture Capital Partner 84

Duct Tape Marketing

JUNE 20, 2023

Rodney highlights the significance of selecting the right areas for transformation that can deliver a differentiating value, plus the importance of upskilling and reskilling existing talent within digital changes. It's something we have to invest in, but it's not, uh, competitively differentiating. And into the app.

Technical Review 63

Technical Review Silicon Valley Generative AI Arizona 63

The Startup Magazine

MAY 4, 2017

Capture their desire with something new, differentiate yourself by your unique value — what can your company offer that no one else can?”. Other metrics include marketing efforts, cost of production, business figures and more. million valuation ($150,000 for 10 percent equity) in 2008.

Silicon Valley 63

Silicon Valley Startup Maryland Angel Investor 63

Babbling VC

JANUARY 30, 2011

because Tier 1 funds in Europe tend to only differentiate themselves based on where they are located. Although valuations are good and the power is in your hands to some extent think twice. It's nice to get a higher valuation and some extra cash but make sure it doesn't ultimately cost you more than you think. .

Europe 68

Europe Germany Due Diligence Valuation 68

The Equity Kicker

AUGUST 8, 2017

Specifically, we feel we have strong capabilities in working out whether customers will value products highly and whether it will be possible to market them cost-effectively online. To do that they must pass valuation milestones. We are better able to see problems coming and advise on strategies to work around them.

Artificial Inteligence 78

Artificial Inteligence eCommerce Early Stage Algorithm 78

Both Sides of the Table

MARCH 1, 2011

Mike believed that any valuable page was going to be monetizable on a cost-per-click basis in relation to every page on the Internet. To differentiate themselves in the marketplace, Quigo made the pivotal move of going to publishers and saying explicitly “you’re working with Adsense. How Quigo Went Head-to-Head With Google.

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

www.readwriteweb.com

OCTOBER 18, 2010

He is also struggling with the pricing structure, because until he can get to volume printing, the cost per unit is way too high. I asked her not to spray and pray, and focus on her core, differentiated products - stretch mark and c-section mark removal creams for new mothers. This is her core market.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52

www.readwriteweb.com

OCTOBER 18, 2010

He is also struggling with the pricing structure, because until he can get to volume printing, the cost per unit is way too high. I asked her not to spray and pray, and focus on her core, differentiated products - stretch mark and c-section mark removal creams for new mothers. This is her core market.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52