Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Term-sheets and Valuations: Thinking about Negotiations. The Valuation Question. When companies seeking their first round of serious funding are good enough to receive a term-sheet from an investor, the first issue that always arises is valuation. Let’s start at the end.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

MARCH 13, 2020

If you need to attract investors to your startup, your financial projections have to be as attractive as the idea. In that context, I offer the following financial projection strategies, from my own experience: Forecast a business that has plenty of room to grow quickly. Project growth equal to or better than current premium startups.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Hunter Walker

JULY 18, 2022

Why I’m Not Telling Every Startup To ‘Pull The Brakes’ Just Yet. The ‘valuation multiples’ reset also came with an increase in slope of the curve. But you need to remain great and investable while also managing your costs, extending your runway, tightening your operating plan, and so on. Not buying low quality growth.

Valuation 117

Valuation Cap Table Startup Later Stage 117

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. In all these cases, capital is provided to fuel forecasted growth without creating a commitment to a particular vision for future funding rounds, exit goals, and associated blitzscaling. Yes, via conversion rights at a valuation cap.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Up and Running

JULY 14, 2015

An early stage startup will want to access funds to help further validate its business proposition. Any investor will put their valuation on your business based on a number of factors, including looking at important metrics for your business, patents, or assets. But raising too much money will cause the valuation to increase.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

Up and Running

OCTOBER 3, 2018

Set a specific time each month to review it , comparing forecasts to actuals and revising as necessary. Consider this example: Pleasant Acres Real Estate, LLC (PARE) is a startup company located in El Paso, Texas. Financial Summary: Explain your business model, startup costs, revenues, and liabilities to the company.

El Paso 61

El Paso Business Plan Technical Review Forecast 61

The Startup Magazine

FEBRUARY 8, 2024

billion by 2027, according to forecasts. With so many platforms available, it is necessary to carefully evaluate each option according to various factors like scalability, user friendliness, integration capabilities, support services, and cost effectiveness. billion in 2022 to $43.6

Forecast 138

Forecast Analytics Framework Employee 138

YoungUpstarts

MAY 17, 2019

In today’s sexy startup culture, buying an existing business has lost its vogue. But every year thousands of entrepreneurs become millionaires by buying and growing businesses without the startup headaches of venture capitalists, zero revenue, and no business processes.

Due Diligence 185

Due Diligence Forecast Deal Structure Valuation 185

Tim Keane

MARCH 9, 2011

Startups and angels: Along the way to success. How to prepare a sales forecast for a business plan » March 09, 2011. It’s a deceptively simple question:  what is the optimal way to finance a new startup? It’s a deceptively simple question:  what is the optimal way to finance a new startup?

Finance 83

Finance Bootstrapping Startup Equity 83

Startup Professionals Musings

FEBRUARY 13, 2016

Entrepreneurs who are looking to attract investors need to develop and pitch a plan -- preferably written -- that answers every potential investor question about your startup before it is asked. Name the three top ones, and present your sustainable advantage as well as barriers to entry for new startups.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

David Teten

AUGUST 6, 2015

So often I speak with companies that have charged ahead building an ultra-complex daily or weekly model with thousands of assumptions and complex dashboard outputs, when their potential investors simply want a high-level 24 month forecast with 12 months of reconciling historical data.”. HOW TO MAKE YOUR CELLS READABLE.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

YoungUpstarts

FEBRUARY 14, 2017

and also being involved in other startups I have seen a number of pivots, some of them worked well and others in hindsight probably needed some more thought, but all have been a learning experience! Your Pivot is likely to cost money and time. It now has a multi-billion dollar valuation. This is how you grow your startup.

Technical Review 157

Technical Review Architecture Revenue Channel 157

www.entrepreneur.com

SEPTEMBER 22, 2011

Entrepreneur Homepage Startups Starting a Business Home How-To Guides Startup Basics Business Ideas Business Planning Startup Financing Success Stories Home-Based Business Starting a Business Play Video How to Take a New Product from Just an Idea to a Business (Video). Startup Basics Does College Matter for Entrepreneurs?

Sweat Equity 55

Sweat Equity Equity Fractional CTO CTO 55

Both Sides of the Table

FEBRUARY 14, 2016

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization. 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

Hunter Walker

NOVEMBER 30, 2022

When a High Flying Startup Implodes. In fact, losing money on a meaningful percentage of startups isn’t just expected, it’s potentially evidence that you’re taking enough risk to hit some of the power law winners which will pay back your LPs many times over! Opportunity Cost of GP’s Time. Opportunity Cost of Follow-on Capital.

Vertical 48

Vertical LP Syndicate Syndication 48

Startup Professionals Musings

AUGUST 8, 2016

As a startup advisor and investor, I find that more and more entrepreneurs avoid using the term “profit” in pitching their new venture. Customers typically won’t switch to a new vendor for less than a twenty percent cost advantage. Generate a 5-year financial forecast from opportunity data. Without profit there is no business.

Intellectual Property 120

Intellectual Property Entrepreneur Elevator Pitch Exit Strategy 120

Both Sides of the Table

MARCH 30, 2016

If you want to see what was on my mind – I started foreshadowing change publicly in October 2015 with a forecast of what I expected in 2016 VC funding markets at a presentation I gave at the annual Cendana VC/LP conference hosted by Michael Kim. SaaS valuations had completely reverted to the mean and were now trading at 4.2x

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Startup Professionals Musings

AUGUST 7, 2015

Large and growing markets imply a high startup growth potential, with high odds of scaling and success. Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. First to market” is not sustainable by a startup.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Careful about “hockey stick” forecasts. Here’s a valuation example for you based on amount to be raised. Projections for your future. How much money can you get? .

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

www.currentlyobsessed.com

MAY 28, 2010

Valuation is an important aspect of VC deal terms, and a major determinant of your ultimate outcome. I unexpectedly found that it was more helpful to think about the company valuation as an output variable in the fund-raising equation. The net effect was more money raised, higher valuation and the same percentage of equity sold.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

Up and Running

SEPTEMBER 20, 2016

When I was seeking a co-founder for my startup, each time I’d dive deep into a discussion about commitment with potential partners, they’d bring up venture capitalists and fundraising. as if it’s a requirement of doing a tech startup. See Also: The Best Places Worldwide to Start Your High-Growth Startup.

Early Stage 60

Early Stage Startup Forecast Channel 60

David Teten

SEPTEMBER 23, 2017

Sources like Crunchbase , Angel List , and Seed Invest even give this data away for free or very low cost. The only problem that faces startup investors now is how to mine this new data layer efficiently to increase returns.”. For the broader use case of helping startups execute their legal paperwork, Clerky is a focused solution.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Startup Professionals Musings

AUGUST 13, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Include a current valuation estimate. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. Financial forecast and metrics.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Up and Running

AUGUST 21, 2017

It’s understandable, then, that the term “unicorn” has come to be used routinely in the world of business funding to refer to those rare and beautiful privately funded startups—especially in the tech space—that have reached the upper echelon of valuation, being valued at over $1 billion. at around 27 million. Reasons for pessimism.

Silicon Valley 86

Silicon Valley Venture Capital Valuation Later Stage 86

Startup Professionals Musings

MAY 13, 2011

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Include a current valuation estimate. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. Financial forecast and metrics.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Startup Professionals Musings

OCTOBER 12, 2010

Items that paint a big picture include revenue by major product area, cost of goods, and operating expenses by category. Tags: scorecard venture value Akira Hirai business valuation. Part of your Venture Value Scorecard should be devoted to summarizing your income statement. Detail isn’t important; tracking your progress is.

Intellectual Property 223

Intellectual Property .Net Valuation Distribution 223

Austin Startup

SEPTEMBER 17, 2017

Startups provide both the luxury and the risk of having very little data on which to base the important early decisions. Further, you demonstrate on your spreadsheet that a venture return to early investors is plausible at a valuation that gives you enough equity to get the job done and to take care of you and your team at exit time.

Valuation 48

Valuation Forecast Seed Money Business Model 48

Up and Running

MAY 15, 2019

No matter its size or age, every brewery was once a startup. Most small businesses and startups that are looking to grow— hire a new employee , or buy a new piece of equipment, or open a new location —need to think hard about cash flow, or making sure they have enough money in the bank to meet payroll and other financial obligations.

Oregon 24

Oregon Jordan Software Review Distribution 24

Tim Keane

FEBRUARY 3, 2010

Startups and angels: Along the way to success. « Term-sheets and Valuations: Thinking about Negotiations | Main. |   For an example written by a VC, see A Startups Guide to Market Sizing from DocStoc. .    For an example written by a VC, see A Startups Guide to Market Sizing from DocStoc.

Marketing 116

Marketing Wisconsin Startup Angel Investor 116

David Teten

NOVEMBER 15, 2013

Each new investor tends to raise valuations and lower returns for all the other competitive investors. It is mathematically impossible for the median investor to beat a low-cost index, after expenses. (Of According to CB Insights, there is little to no relationship between financial runway and startup success.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114

Business Plan Blog

DECEMBER 26, 2013

This process may include the provision of various scenarios on revenues and costs as the investors validate forecasts initially presented. Pre-money valuation. Professional fees and costs. Startup Funding' Amount to be invested. Type of security and structure. Rights and restrictions of shareholders.

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

Startup Professionals Musings

NOVEMBER 2, 2018

As an investor myself, I look for a balanced story focused on the major elements that drive profitability, including the following: A 5-year financial forecast achieving a positive cash flow early. They are looking for solutions that will reduce their costs by 20%, or double productivity, or cut traffic accidents by a third.

Intellectual Property 48

Intellectual Property Initial Public Offering Merger Acquisition 48

Startup Professionals Musings

APRIL 22, 2010

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. Include a current valuation estimate. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. Financial forecast and metrics.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Both Sides of the Table

OCTOBER 1, 2009

You can’t get paid for sitting on the sidelines – I always tell people that when recessions start managers in large companies get rewarded for cutting costs. The growth and $1 billion valuation of Twitter and its impact on business – The Big Thaw discussion would obviously not be complete without discussing Twitter.

IPO 255

IPO Investment Bankers Venture Capital Marketing 255

Small Business Force

OCTOBER 14, 2016

Whether you’re a startup entrepreneur seeking capital to launch and scale your initial business concept or you’re a small business owner looking to fund growth for your existing business, there are some key criteria that, virtually, all investors use when evaluating an investment. How scalable is your business model? A final word.

Sweat Equity 20

Sweat Equity Private Equity Valuation Equity 20