Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. CAC is often measured incorrectly and doesn’t often doesn’t capture the true costs of acquisition. The first input is CAC.

Metrics 150

Metrics Cost Acquisition Startup 150

Startup Professionals Musings

SEPTEMBER 16, 2023

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? The cost of social media done well is low. Later cleanup can double your costs and risks. Marty Zwilling

Intellectual Property 261

Intellectual Property Entrepreneur Angel Groups Social Media 261

Startup Professionals Musings

AUGUST 9, 2020

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. Less dependence or startup success, or more cash compensation, generally means less equity assigned. Amount of venture funding provided.

Cofounder 435

Cofounder Technical Cofounder Equity Intellectual Property 435

Startup Professionals Musings

NOVEMBER 28, 2020

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? The cost of social media done well is low. Later cleanup can double your costs and risks. Marty Zwilling.

Intellectual Property 404

Intellectual Property Startup Angel Groups Social Media 404

Startup Professionals Musings

APRIL 11, 2021

At this point your entity may already have several million in valuation, so the IRS will tax your shares at that value immediately as income, just when your cash flow is at its lowest. Entrepreneurs often put off the hassle and the cost of filing a patent until first funding. Trouble with the IRS over Founders stock value.

Cost 363

Cost Non-Compete Accredited Investor Cofounder 363

Startup Professionals Musings

DECEMBER 20, 2019

There is additional encouraging news for aspiring entrepreneurs on many fronts, just in case you are thinking about joining the existing ranks: Valuations of successful startups have hit an all-time high. Cost of entry for a startup is at an all-time low. Social media is a boon for entrepreneurs and startups.

North America 320

North America Incubator Initial Public Offering Valuation 320

Austin Startup

APRIL 25, 2017

I won’t dive into cost structure in this blog post, but let’s think through how Snap could grow revenue 20x. In summary: Snap’s current business doesn’t justify a $20B valuation. How can one justify a $20B valuation for Snap? The product that could most likely justify Snap’s $20B valuation is Spectacles.

Valuation 48

Valuation Technical Review Forecast Social Network 48

Startup Professionals Musings

MAY 14, 2023

Things will cost more than you expect. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. The best entrepreneurs manage cash flow ruthlessly and never delegate decisions about spending money. Buffer your projected resource requirements. You will make mistakes.

Burn Rate 258

Burn Rate Hockey Stick Management Salary 258

Startup Professionals Musings

MAY 1, 2023

Investors may not be called cofounders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Less dependence or startup success, or more cash compensation, generally means less equity assigned. Amount of venture funding provided.

Technical Cofounder 247

Technical Cofounder Equity Distribution Cofounder 247

Startup Professionals Musings

DECEMBER 30, 2022

Every business owner and entrepreneur I meet in my consulting rounds dreams of finding that “ disruptive ” innovation that will supercharge their business and move it into the ranks of business unicorns (billion-dollar valuations), such as SpaceX and Apple.

Technical Review 252

Technical Review Silicon Valley Software Review Metrics 252

VC Cafe

SEPTEMBER 26, 2022

The press took notice, especially since just a few months later startups were laying off employees en-masse to cut costs. Sustainable growth: Prioritise sales efficiency over growth at all costs. ValuatIon should be a function of value, not ego. 2022 VC Market Update Median valuations January through April Pre-seed: $7M ? $9M

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. Valuation.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

ReadWriteStart

JANUARY 28, 2022

This article will assist you in gaining a fundamental understanding of equity valuation, kinds of equity, and other related topics. Considering that a warrant is often issued to decrease the cost of a debt issuer, the expiration period is typically more than two years after the warrant is first issued. Importance of equity valuation.

Valuation 108

Valuation Equity Warrant Common Stock 108

YoungUpstarts

NOVEMBER 2, 2020

REASON 2: You Need to Gain the Efficiencies to Be Cost-Competitive. REASON 6: Digitally Driven Companies Have Higher Valuations. Lastly, and perhaps most importantly, digitally driven companies have consistently higher valuations. If your website is confusing and disorganized, that is the message people will take away.

Valuation 261

Valuation Technical Review Revenue Operations 261

The Startup Magazine

JANUARY 14, 2020

According to the World Green Building Council (WGBC), the following findings support a case for green building: Lower operating cost – the construction of green buildings can help building owners and occupiers save money thanks to efficient energy and water usage. Introduction of smart metering. Upgrading of the HVAC system.

Green 132

Green California Government Valuation 132

VC Cafe

JANUARY 10, 2024

As Viola points out, there are 5 main barriers to adoption: Security, privacy, intellectual property, performance, and cost. The fear of commoditisation, questions about copyright, impending regulation, platform dependencies, and costs remain valid concerns in 2024.

Generative AI 109

Generative AI Artificial Inteligence Open Source 109

Startup Professionals Musings

AUGUST 19, 2020

Things will cost more than you expect. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. The best entrepreneurs manage cash flow ruthlessly and never delegate decisions about spending money. Buffer your projected resource requirements. You will make mistakes.

Burn Rate 310

Burn Rate Hockey Stick Salary Social Media 310

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

The Startup Magazine

FEBRUARY 21, 2024

As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. Simultaneously, we conducted a thorough operational review to identify inefficiencies and areas for cost reduction.

Technical Review 126

Technical Review Due Diligence Bankruptcy Intellectual Property 126

Startup Professionals Musings

NOVEMBER 26, 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 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

YoungUpstarts

APRIL 12, 2019

So, unlike the assets and property, liabilities mean the things that cost the business money. Use one of two business valuation formulas. While some tangible property tends to lose its value over time, the cost of some of the other property, vice versa, just increases. Calculate the profit of your business.

Small Business 101

Small Business Valuation .Net Balance Sheet 101

Startup Professionals Musings

JANUARY 21, 2018

There is additional encouraging news for aspiring entrepreneurs on many fronts, just in case you are thinking about joining the existing ranks: Valuations of successful startups have hit an all-time high. Cost of entry for a startup is at an all-time low. Social media is a boon for entrepreneurs and startups.

Entrepreneur 166

Entrepreneur Valuation Incubator Initial Public Offering 166

VC Cafe

OCTOBER 31, 2022

But even in the seed market the bar could get higher: I wouldn’t be surprised to see valuations drop and for VCs to have rising expectations about the level of traction they expect to see before funding. Tiger, Softbank and other crossover funds are slowing down significantly and valuations overall are down significantly.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

ReadWriteStart

JULY 15, 2020

New talk of capital efficiency is gratifying, but there was another lesson from pre-COVID-19 valuation struggles. Venture capitalists and early-stage investors have told all of us, founders are critical to a startup’s valuation. Remember Morality Impacts Valuation appeared first on ReadWrite. Morality matters. Bank on it.

Valuation 91

Valuation South Carolina San Jose Balance Sheet 91

VC Cafe

JANUARY 14, 2022

Many of the companies that went public via SPACs saw their valuations dramatically reduce in the months that followed post IPO. This excludes real estate prices and relates mainly to cost of living (prices of goods). Most expensive cost of living cities in the world (source: WEF ). Global tech correction.

Technical Review 158

Technical Review Lock-up Period South Korea 158

Startup Professionals Musings

OCTOBER 27, 2014

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition).

Software Review 250

Software Review Software Technical Review Intellectual Property 250

ReadWriteStart

OCTOBER 7, 2010

As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I As long as the deals cover his infrastructure costs, he should not be worried.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Steve Blank

SEPTEMBER 5, 2018

And if their initial guesses were wrong, they needed a process that would permit them to change early on in the product development process when the cost of changes was small – the famed “pivot”. And if the company does go public, the valuations are at least 10x of the last bubble. The result? Carpe Diem – Seize the Cash.

Lean 335

Lean Burn Rate Startup IPO 335

YoungUpstarts

OCTOBER 24, 2013

One of the challenges for investing in startups has always been the lack of an established way for founders and investors to actually measure and decide on the valuation of the startup concerned. ” Ideaspotting investment pre-money valuation valuation Worthworm'

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Pragmatic cost cuts are always possible and often productive. Be realistic on valuation.

Burn Rate 150

Burn Rate Cap Table Dilution Balance Sheet 150

Steve Blank

JUNE 27, 2017

Uber – current valuation >$70 billion – knew the day they started that their ridesharing service violated the law in most jurisdictions. Airbnb – current valuation $31 billion – allows people to rent out their homes, rooms or apartments to visitors. Here are some of the most visible examples.

Startup 275

Startup New York City Valuation Distribution 275

The Startup Magazine

APRIL 10, 2019

If you have an interest or property in real estate, then here are the 4 things that you need to know about property valuation: Photo by Kevin Wolf on Unsplash. The value of a real estate property isn’t the same as its price or cost. There are different methods of appraisal that are used when determining the property valuation.

Valuation 98

Valuation Australia Government Finance 98

Steve Blank

NOVEMBER 2, 2021

INTERACTIVE CHART “ Average Cost of Hard Drive Storage per Gigabyte 1980-2014” Human Progress. We discussed whether 1) that was true or just anecdotal 2) if true, was it the same in other research universities, 3) why it happened (software startups are getting funded at obscene valuations)? Lee Bell, “ What is Moore’s Law?

Technical Review 366

Technical Review Taiwan Technology Artificial Inteligence 366

ReadWriteStart

MAY 30, 2022

The cost of the money you receive may be more than you’re willing to give. Stacking costs early in your entrepreneurial career makes you vulnerable to failure. Will your market-driven valuation still achieve your exit goals once everyone (including the taxman) takes home their slice? You might even ask for it.

Bootstrapping 147

Bootstrapping Startup Equity Silicon Valley 147

ReadWriteStart

JUNE 1, 2020

It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Point number 3: Never raise money with an increased valuation.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). Lower costs to start a business (95% reduction), many more companies created & funded by angels / seed. pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. Where are we today?

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

View from Seed

NOVEMBER 18, 2020

Airbnb convinced travelers to part with 100% of their booking cost up front and then they pay out the required amount to hosts when the stay actually occurs. The straight cost of revenue line is only ~25% of revenue implying a 75% gross margin, assuming you were looking at this in a simplistic revenue / COGS / gross profit manner.

North America 401

North America IPO Prospectus Europe 401