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. Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Up and Running

JULY 1, 2020

It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling. Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success.

Business Plan 152

Business Plan Forecast Operations Dilution 152

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 26, 2019

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. You’re not allocating enough costs to gross margin or the cost to acquire a customer. Priority depends on your goals (e.g.

Restful 202

Restful Founder Revenue Acquisition 202

Hearpreneur

JANUARY 30, 2022

Thanks to Adam Wood, Revenue Geeks ! #7- Businesses are being more concerned about the changing habits of their stakeholders and are adjusting their culture and operations accordingly. There are also staffing issues, which limit full operational services. This won’t just be about daily business operations but performance.

Entrepreneur 123

Entrepreneur Green Technical Review Social Media 123

Up and Running

NOVEMBER 5, 2018

What will it cost to start that business? Many people underestimate startup costs and start their business in a haphazard, unplanned way. Estimating realistic startup costs is one of the key elements of your financial plan. What are startup costs? And it interferes with the estimates and dilutes their value.

Cost 150

Cost Balance Sheet Startup Intellectual Property 150

ReadWriteStart

JUNE 1, 2020

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. Reasons for funding. ? Scale up your operations. Now you may want to scale up your operations or expand your presence. Incubators and Accelerators.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. But they’re big and they have very experienced operators like Brett Brewer running things. how to cut redundant costs. - It has awesome features that my main competitor doesn’t have.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. Revenue When I look at an income statement I start by focusing on the revenue line. You need to understand the “quality” of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

YoungUpstarts

JUNE 13, 2011

The 54 companies in the study operated product and service businesses, had been in business on average 9.6 years, and had reached an average revenue level of $60 million with the range being from $5 million to $350 million. The problem is that too many entrepreneurs never learn to say ‘NO!’ Hiring smart. Growth is messy.

Indianapolis 219

Indianapolis Minneapolis Kentucky Virginia 219

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

Both Sides of the Table

SEPTEMBER 29, 2009

Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. As a personal story, I sat on the board of one company with a very unhealthy burn rate relative to revenue or expected growth. While the company continues to perform well it has come at a cost.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

The Next Web

SEPTEMBER 15, 2013

The most common example of an API strategy is around companies who aspire to build a developer community as a new revenue source or as the foundation of their business. They should not be trying to generate new revenue streams or reach new audiences through such programs. Twilio is an interesting example of such a company.

API 135

API Audience Dividend Programming 135

Version One Ventures

FEBRUARY 6, 2019

The cost of bringing a drug to market is expensive (hundreds of millions of dollars to billions of dollars) and risky (it simply might not work!). Then, the revenue you earn from these partners/customers can cover your operating costs while you develop your own drug to bring to market – which is where the most value is captured in biotech.

Dilution 132

Dilution Artificial Inteligence IPO Valuation 132

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. It is a tool. They use that tool to buy ownership in a company.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. It is a tool. They use that tool to buy ownership in a company.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Hunter Walker

JANUARY 15, 2016

I wish I could claim I deftly foresaw this, but I was just seeking recurring revenue to to cover OneMatchFire’s office expenses. By the end of 2004 I had brought on two co-founders: John Vars – who is now the Chief Product Office at TaskRabbit, and Steven Reading took over Sales and Revenue. It’s been an amazing run.

Technical Review 48

Technical Review Startup Cofounder SMS 48

ReadWriteStart

APRIL 4, 2023

These fees are charged to cover the costs of operating the crowdfunding platform, including marketing, payment processing, and customer support. Founders should consider other fundraising possibilities, such as traditional venture capital or angel investment, as well as non-dilutive funding sources such as grants or loans.

Startup 141

Startup Campaign Cofounder Venture Capital 141

The Startup Magazine

JULY 4, 2018

Every business owner wants to grow their revenue, but scaling up your business can be a major challenge. Companies that successfully navigate this pitfall often rely on technology to keep their operations efficient as their customer base and staff get bigger. Source: Pixabay.

Artificial Inteligence 70

Artificial Inteligence Azure Cloud Campaign 70

David Teten

NOVEMBER 17, 2011

In particular, this model is designed to help all team members understand the impact of dilution on their options. To illustrate dilution effects, we show a couple of investment rounds (angel and VC) as well as employee option increments at different stages. I couldn’t find one online, so I built it.

Employee 155

Employee IRR Startup Mexico 155

Both Sides of the Table

MARCH 11, 2011

I thing I’ve learned over the years is that technology purists hate advertising even when it is that revenue stream that truthfully drives much of our industry. He took out an ad in the Yellow Pages (it was the early 80′s, pre Internet), which cost him $1,000 / month for a half-page ad. I think this makes no sense.

Product 350

Product Tuvalu Dilution Incubator 350

Startup Lessons Learned

JUNE 15, 2009

For example, imagine a team operating in a traditional waterfall development system, without continuous deployment, test-driven development, or continuous integration. Who will ultimately bear the cost of their mistakes? So we need to find solutions that operate at the systems level to break teams out of this pincer action.

Continuous Deployment 167

Continuous Deployment Software Review San Francisco Lean 167

K9 Ventures

OCTOBER 10, 2017

Yes, the infrastructure is cheap (to start), but the human costs have gone up dramatically. Seed is the new Series A. (~$2M used get for building product, establishing product-market fit and early revenue). 6M-$15M used to scale customer acquisition and revenue). Q: What are some Pre-Seed funds operating today?

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Duct Tape Marketing

APRIL 7, 2022

Marcel is the CEO & Co-Founder of Parakeeto, a company dedicated to helping agencies measure and improve their profitability by streamlining their operations and reporting systems. So a lot of agencies track revenue, some actually even track profit, but you, if we're gonna optimize, um, profitability, what, what should we be measuring?

Cofounder 73

Cofounder Hosting Networking Software Review 73

Up and Running

APRIL 24, 2018

For example, having flexible work hours means you can hire talented candidates from different time zones, which will increase your productivity while keeping the costs down. That’s why having a revenue-minded focus from the early stages helps to secure funding. Have a comprehensive growth strategy.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

Both Sides of the Table

APRIL 27, 2010

Most of what I learned about operating startups I learned from the really tough years at my first company from 2001-2003. I learned how to get press coverage when we were no longer “hot.&# I learned how to manage costs effectively. I learned about revenue recognition. You have at least 6 data points to suggest this.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

Occam's Razor

MAY 2, 2017

The very best analysts distill, rather than dilute. The very best analysts are comfortable operating with ambiguity and incompleteness, while all others chase perfection in implementation / processing / reports. Every ecommerce site has to obsess about Revenue. The very best analysts focus, when most will tend to gather.

Metrics 141

Metrics Acquisition eCommerce Analytics 141

Startup Professionals Musings

OCTOBER 16, 2021

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. With the low cost of e-commence entry, and powerful Internet technologies, they require minimal capital to start, perhaps as little as $500. Do you love antiquing?

Entrepreneur 304

Entrepreneur United States Dilution .Net 304

ConversionXL

AUGUST 30, 2018

It costs money. It’s likely to be related to improving revenues, reducing costs, increasing the number of new customers, increasing the sales from existing customers, or increasing shareholder value. The finance team understands that content customers are less likely to churn and destabilize revenue flows.

Design 111

Design Framework Product Development Technical Review 111

Austin Startup

MARCH 26, 2019

You just spent a few thousand dollars on advertising and your paid customer acquisition cost (CAC) numbers tested well relative to your best guess for customer lifetime value (LTV). All else being equal, the incremental cost of acquiring the next customer will always be higher than the last. What happens at 3X?

Technical Review 49

Technical Review Software Review China Acquisition 49

Startup Professionals Musings

DECEMBER 12, 2018

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. With the low cost of e-commence entry, and powerful Internet technologies, they require minimal capital to start, perhaps as little as $500. Do you love antiquing?

United States 244

United States Dilution .Net Small Business 244

YoungUpstarts

MAY 31, 2016

Oliver, author of “ Mantra Design ” and “ Mantra Leadership “ Successful businesses are not a result of chance, but are the by-product of an effective and evolving strategic plan, complimented by an equally effective operating infrastructure, and supported by exceptional human talent. Is a marketing plan important?

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

Startup Professionals Musings

NOVEMBER 9, 2016

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. With the low cost of e-commence entry, and powerful Internet technologies, they require minimal capital to start, perhaps as little as $500. Do you love antiquing?

United States 242

United States Dilution .Net Small Business 242

David Teten

OCTOBER 1, 2015

portfolio operator VCs, e.g., Andreessen Horowitz, ff Venture Capital, First Round Capital, Google Ventures. I’ve talked with a number of software development shops who are eager to get into the business of cofounding companies, i.e., getting product revenue and equity instead of just consulting revenue.

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Startup Professionals Musings

MARCH 26, 2013

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. With the low cost of e-commence entry, and powerful Internet technologies, they require minimal capital to start, perhaps as little as $500. He and I offer additional principles as follows: Tailor the business to you.

United States 246

United States Dilution Startup .Net 246

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. Most startups operate close to themargin of failure, and the distraction of having to deal with clientscould be enough to put you over the edge. Whatkind of anti-dilution protection do they want? They just want to invest in this startup. Hell if they know.In

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. It will also minimize future dilution. The same thing happened to many Internet stocks. Moreover, once high-flying startups began to struggle on the fundraising trail. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40