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. In SaaS (or any recurring revenue business) this is also a very difficult task.

Metrics 150

Metrics Cost Acquisition Startup 150

Both Sides of the Table

NOVEMBER 14, 2017

This financial leader could well have come through the finance org at another startup or at a larger company but they often also can come from strategy consulting (Bain, BCG or McKinsey) or through investment banking (Goldman Sachs, Morgan Stanley, etc.).

Operations 286

Operations New York City Technical Review Startup 286

View from Seed

JANUARY 27, 2021

. $100M is a meaningful increase from our $50M third fund, though it’s still quite small in the grand scheme of venture, especially amid the recent wave of late stage financings and SPACs. As the definition of seed has expanded , our fund has gradually grown to target the full seed spectrum.

LP 411

LP Early Stage Seed Stage Venture Capital 411

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   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.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

JANUARY 22, 2020

As a long-time advisor to entrepreneurs, and a former angel myself, I still find startups confused about the definition of an angel investor, and how and when to attract one. Since they know that most startups fail, their target return is ten times investment, so be prepared to talk cost vs revenue and product life.

Angel Investor 322

Angel Investor Valuation Syndicate Syndication 322

This is going to be BIG.

SEPTEMBER 30, 2012

How else can you explain this headline matching a story about a professional social network still trying to explore revenues raising $17mm on an $80mm valuation? venture capitalists are now asking tougher questions about start-ups' revenue and profits.". Perhaps I need to rethink that. But second, how do you back this up?

Venture Capital 114

Venture Capital Marketing Term Sheet Software Review 114

Cracking the Code

FEBRUARY 23, 2011

It would have been easy to explain the difference by changes in the 2010/2011 revenue growth projections but unfortunately that is not the case. revenues while large caps are trading at 6.4x. Note: high CAC ratio means high productiviy (see blog post for definition). Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 101

Software Review Technical Review Valuation Europe 101

ithacaVC

NOVEMBER 14, 2014

I have written about startup valuations previously. If you are advising startup founders, I strongly suggest having them read all 4 of the posts to get the lay of the startup valuation land. There’s a reason it’s so difficult to figure out – valuations have little basis in reality for early stage companies. Market size.

Valuation 69

Valuation Startup Down Round Early Stage 69

Steve Blank

MARCH 31, 2014

Companies horde cash and squeeze the most revenue and margin from the money they use. Look at the valuations of companies like Tesla, Illumina, and Twitter. The companies that can show “startup-like” growth rates of 50% plus per year will get stratospheric market valuations. Innovation.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Version One Ventures

DECEMBER 14, 2016

Every announcement – whether it was a funding round, exit or layoffs – was analyzed within the context that the tech bubble has definitely burst or that we’re still in the bubble. forward revenue in February 2016 (the low), they appreciated by 6% each month for the following six months. So, what really happened in 2016?

Technical Review 60

Technical Review Early Stage Portfolio Valuation 60

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. Defining the pre-seed round It’s futile to look for ‘one true’ definition. A founder asked me what makes a $2M round “pre-seed”?

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Up and Running

AUGUST 29, 2014

Many people who want to start a business believe they will be able to get grants or loans to help them finance the venture. A Certified Public Accountant (CPA) is a state licensed professional who offers various accounting, auditing, tax, financial analysis, business valuation and consulting services. Often this is not true.

Small Business 87

Small Business CPA Government North America 87

Duct Tape Marketing

FEBRUARY 3, 2022

So, you know, I, I have kids that are in their thirties and I'm envisioning a purple dinosaur that I did a a lot of watching with, but I guess there's also Smith Barney, which is certainly in the finance space, but I'm sure you have and Barney. So there was a definitive end date when I wanted this process to be done.

Entrepreneur 79

Entrepreneur Technical Review Cofounder Valuation 79

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. It’s worth pausing on the definition of the phrase “at the noteholders’ option.”

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. In the past few years, hundreds of small companies have been snatched up by private equity firms willing to agree to ever-rising valuations. Arizona Bay has also blended equity payments with revenue-sharing deals.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Cracking the Code

MARCH 12, 2010

Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Given that the revenues are not growing very fast, this means that most of the companies have reduced their sales force and focused on productivity improvement. Finance Dissertation Help.

Software Review 63

Software Review Technical Review Cloud Forecast 63

View from Seed

JANUARY 26, 2016

This is actually an imperfect definition, but let me first talk about why these are happening in the first place. After all, aren’t seed investors (like us) by definition supposed to be the first and earliest-stage investors? The reasons for the shift are: Late-stage financing froth.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

View from Seed

SEPTEMBER 25, 2019

Something standard like a SaaS company where the exits scenarios and valuations are well-understood may not need a slide here, but the more non-traditional or unique the venture is, the more information which a Founder can fill in the blanks of “what could be” are helpful. Nearly by definition, the.

Seed Stage 166

Seed Stage Retention Restful Valuation 166

Cracking the Code

DECEMBER 1, 2009

Note: high CAC ratio means high productiviy (see blog post for definition). Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Yahoo Finance. The recession created opportunities! Public SaaS 13 Multiples. S&M productivity (CAC ratio) for the SaaS 13 Index. My Investments. anecdotes. (13).

Software Review 48

Software Review Technical Review Cloud Europe 48

VC Cafe

SEPTEMBER 16, 2021

Let’s start with a short definition: [the creator economy] is defined as the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.

Startup 207

Startup Social Media Venture Capital Audio 207

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. With this decline, the average EV/08 rev.

Software Review 48

Software Review Technical Review Valuation Portfolio 48

www.mint.com

MARCH 9, 2010

If the answer to the question centers around “We will achieve revenue soon so our net will improve and give us more runway,” it means the company is in trouble because no product ever ships on time nor achieves the company’s “conservative forecast.” What is the post-money valuation of your last round? Who is on your board of directors?

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

K9 Ventures

OCTOBER 10, 2017

So, I took it upon myself as a challenge to put together the definitive “ Pre-Seed FAQ.” This post is intended to be a dynamic document, and I will attempt to update it from time to time with new questions that may arise or as financing trends evolve. Q: What amount of financing is considered Pre-Seed? Q: Is Pre-Seed a Thing?

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Cracking the Code

NOVEMBER 10, 2009

Get instrument rated, and trust the 6Cs of Cloud Finance (more.) By definition, your sales prospects are online - Savvy online marketing is a core competence (sometimes the only one) of every successful Cloud business (more.) Note: high CAC ratio means high productiviy (see blog post for definition). SaaS 13 Index Valuation.

Software Review 48

Software Review Cloud Technical Review Sales Cycle 48

The Equity Kicker

SEPTEMBER 27, 2013

That was before Twitter filed their S1 with a valuation of c$15bn. This is definitely pushing the limits of ‘sensible’ as described below. NOTE: I wrote the post below a couple of weeks back but failed to hit the publish button.

IPO 98

IPO Valuation Stock Advertising 98

Cracking the Code

OCTOBER 9, 2009

This strong recovery has highlighted the resiliency of the recurring revenue model in a downturn as well as the stength of the shift to soaftware-as-a-service and cloud computing. In other words, how much of the decline in revenue growth is due to signing up fewer customer vs lower revenues from each new customer. Yahoo Finance.

Software Review 48

Software Review Technical Review Cloud Europe 48

Agile VC

NOVEMBER 6, 2013

So their revenue figures, pre IPO financing and ownership, and other info is all widely available. If this were a math class, I’d just say the proof is evident but if you want some data on Twitter’s 2013 YTD revenue here you go. Tomorrow we’ll know Twitter’s market cap definitively, at least near term.

IPO 194

IPO Aggregator B2B Internet 194

David Teten

NOVEMBER 17, 2011

I’ve often found it helpful to have on hand a simple model showing the impact of each financing stages on all team members, suitable for sharing with everyone in the company. Download the Startup Options Valuation model here. I couldn’t find one online, so I built it. Valuing startups is a far fuzzier process.

Employee 155

Employee IRR Startup Mexico 155

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 23, 2012

Except I disagree with that definition of “success.” After I sold Smart Bear, that division has increased revenue and profit every year, for five years, even through the 2008/2009 economic disaster. GroupOn’s engine that turned capital into revenue growth was a form of force-feeding rather than building a product).

IPO 240

IPO Flash Bootstrapping Private Equity 240

Cracking the Code

NOVEMBER 10, 2009

It is intriguing to see the M&A dynamics in the space, highlighting the interest of tech companies for recurring revenue streams - even SAP announced in their analyst call earlier this month that they were moving from perpertual licenses to five year term licences. Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 48

Software Review Technical Review IPO Cloud 48

ReadWriteStart

JANUARY 28, 2022

This article will assist you in gaining a fundamental understanding of equity valuation, kinds of equity, and other related topics. The market regards equity as an ownership “share” in a corporation’s income revenue stream. Importance of equity valuation. Select an appropriate valuation method.

Valuation 108

Valuation Equity Warrant Common Stock 108

View from Seed

JUNE 30, 2015

A few weeks ago, Manu Kumar wrote an excellent post detailing the current state of the seed financing landscape. Over a third of our investments happen pre-product (so by definition, before PMF), and two-thirds are pre-revenue. Over time, the frenzy around momentum and growth stage financing will calm down.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Cracking the Code

JANUARY 22, 2009

While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3% of Year One Revenue Sounds high, but is that considered a reasonable package?

Software Review 91

Software Review Clawback Sales Salary 91

Feld Thoughts

SEPTEMBER 20, 2013

After all the speculation about valuation, who owns what, what it’ll price at, how much money will be made, is Twitter growing or shrinking, what is a tweet after all, will their stock symbol be TWIT?, If the SEC didn’t agree with your auditors on revenue recognition, you’d end up in a crazy escalating set of discussions.

SEC 142

SEC IPO Investment Bankers Valuation 142

Cracking the Code

FEBRUARY 25, 2008

As I was building the spreadsheet, I also included the revenue multiples for this set of companies, both for the trailing 12-month (TTM) and the forward 12-month (FTM). Note: high CAC ratio means high productiviy (see blog post for definition). Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation.

Software Review 48

Software Review Technical Review Europe Venture Capital 48

David Teten

FEBRUARY 9, 2015

I’ve listed below the points I recommend you cover when pitching your business to early-stage investors, including but definitely not limited to ff Venture Capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.” Financial Overview.

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60

Hunter Walker

JUNE 7, 2016

Our SM has definitely helped us to build up a stronger following. Bento Box – our mobile-friendly website was created by them to help drive revenue and customers. HW: How have you financed your business to date? How do you decide which products to dedicate time and attention? Revel – our iPad-based point of sale.

Caching 70

Caching DC Social Media Finance 70