Both Sides of the Table

NOVEMBER 3, 2009

This is part of my ongoing series of posts and I need to file this one under both Raising Venture Capital and Startup Advice. So, definition: when I talk about a business plan I’m not talking about a 40-page Word document outlining your market approach. Let’s take your revenue line. Do so at your peril.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Both Sides of the Table

JULY 23, 2014

There has been much discussion in the past few years of the changing structure of the venture capital industry. The rise of alternative sources of capital (crowd funding and the like). The overall trends in our industry have breathed a new life into the venture capital industry. The iPhone was released.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

ReadWriteStart

OCTOBER 2, 2021

And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits. However, most institutional investors (venture capital groups, for instance) don’t mind this structure, and they, in fact, prefer to invest in corporations due to protections from issuing stocks.

Technical Review 158

Technical Review LLC IPO Stock 158

The Equity Kicker

JUNE 9, 2014

There’s definitely a feeling out there that businesses with a $1m revenue run rate are well-established and thus have a growth risk profile rather than a venture risk profile. Startup general interest Venture Capital'

Entrepreneur 143

Entrepreneur Venture Capital Europe Revenue 143

VC Cafe

AUGUST 2, 2022

Given the ‘fuzzy’ period we’re in, where we still struggle with a definition of the Metaverse, it’s easy to dismiss it all as a fad. billion revenue in 2021 for Epic Games and was played by 83.3 billion revenue in 2021, a 107% increase year-on-year. Fortnite generated $5.8 but still lost $2.8

IP 206

IP Cofounder Valuation Acquisition 206

Steve Blank

APRIL 23, 2014

buy out an entire company for its revenue and profits. In response, venture capital firms like Sequoia and Andreessen/Horowitz are hiring new partners just to work with their portfolio companies and match them to corporations. Not all new ventures are at the same stage of maturity. Lessons Learned.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Startup Professionals Musings

JANUARY 27, 2021

Most entrepreneurs have found by now one or more of the many popular crowdfunding sites , and have the name and contact information for at least one of the big venture capital firms. By definition, angels are accredited investors, who invest their own money for a percentage of the business. Most share expertise as well as money.

Search 317

Search Accredited Investor Angel Investor Venture Capital 317

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. We will never take it for granted.

LP 411

LP Early Stage Seed Stage Venture Capital 411

ReadWriteStart

OCTOBER 2, 2021

And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits. However, most institutional investors (venture capital groups, for instance) don’t mind this structure, and they, in fact, prefer to invest in corporations due to protections from issuing stocks.

Technical Review 78

Technical Review LLC IPO Stock 78

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. 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. Incubators and Accelerators.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

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

Both Sides of the Table

APRIL 26, 2016

In many senses the KPIs of a business should be driven by the finance / ops team more than the sales & marketing teams because the latter is wont to use the most liberal definitions of CAC to justify spend where the former has to make sure you don’t run out of cash. One big, beginners mistake people make in LTV is to measure revenue.

Metrics 150

Metrics Cost Acquisition Startup 150

Steve Blank

NOVEMBER 16, 2009

In it, I got asked a question I often hear: “What if we have a web-based business that doesn’t have revenue or paying customers? And without revenue how do we know if we achieved product/market fit to exit Customer Validation?” They’re putting money into web services/business – most without early revenue. End of theory.&#

Customer Development 219

Customer Development Web Developer Customer 219

Steve Blank

DECEMBER 10, 2009

It may seem full of legal definitions and terms but my two takeaways are: 1) Entrepreneurs need to know about these legal options, 2) Consulting an intellectual property attorney is a good move even before you get funded. Your intellectual property may be an additional revenue stream or may add substantial value to your company.

Intellectual Property 213

Intellectual Property IP Software Review Non-disclosure Agreement 213

This is going to be BIG.

JULY 8, 2013

I probably get around a dozen e-mails a week asking me how to get into venture capital. On top of that, anytime I talk to anyone who wants to get involved in startups but isn''t sure what they want to do, inevitably, I hear, "And then I was thinking maybe I should look into venture capital, too.". Know thy self.

Venture Capital 167

Venture Capital Early Stage Portfolio Private Equity 167

Both Sides of the Table

JUNE 22, 2011

I’m no great scholar on bubbles – I have more interesting things to spend my time worrying about than the exact definition , but having been around a few I have at least given them intellectual consideration. Ah, but today’s Internet companies have real revenue! We are definitely still open for business.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Up and Running

JUNE 19, 2013

The New York Times profiles two successful tech start-ups— GoodData , which at its start raised more than $50 million in venture capital funding, and RJ Metrics, which held out with self-financing for as long as possible—that went after the same market at the same time, and contrasts their approaches to finance.

Venture Capital 70

Venture Capital Finance Lean New York 70

Cracking the Code

FEBRUARY 23, 2011

Thoughts from a Venture Capitalist on Software, Software-as-a-Service (SaaS), Cloud Computing, Internet and more. 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. Venture Capital. (3).

Software Review 101

Software Review Technical Review Valuation Europe 101

Babbling VC

JULY 25, 2012

Well I am sure he meant it differently but the irony of it struck me differently than the intent: "A startup should raise venture capital (or “venture-style” angel/seed funding) only if: 1) the goal is to build a billion-dollar (valuation) company, and 2) raising millions of dollars is absolutely necessary or will significantly accelerate growth.".

Venture Capital 70

Venture Capital Angel Investor Bootstrapping Cofounder 70

www.bothsidesofthetable.com

MAY 13, 2012

Raising Venture Capital. The terms “CTO” and “VP Engineering” have such stigmas associated with what they are that I’m sure some people will feel uncomfortable with the definitions I’ve put forward. Raising Venture Capital (12). This Week in Venture Capital (14).

Fractional VPE 89

Fractional VPE Part-Time VPE Fractional CTO CTO Hire 89

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

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

Both Sides of the Table

JULY 16, 2010

One is the “denominator problem&# which says that if an LP invests X% (the denominator) into “alternative investments&# such as venture capital and if their total amount available to invest (the numerator) goes down by 30% then the amount they allocate to VC will by definition need to go down by 30% to stay the same percentage.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Transformify

MARCH 14, 2020

At the same time, the stock markets collapsed, and most businesses already report skyrocketing losses, unmet revenue targets and insufficient stock due to production slow down in China, India and the rest of the world. Over the last decade, a new trend emerged as tech talent was scarce where it was needed the most.

Hiring 98

Hiring Bulgaria Italy Spain 98

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). For most venture capital funds money is a commodity. It is a tool.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Austin Startup

AUGUST 3, 2017

If your answers starts with, “We have multiple revenue streams…” that’s a bad thing. What I really hear is, “ We have no idea what the most significant revenue driver will be. “ Is this a big enough market to support a venture funded business? In either case, the best kind of funding comes from customers, not investors.

Technical Review 69

Technical Review Startup Texas Email 69

Both Sides of the Table

OCTOBER 17, 2019

Just as I was getting the swing of things the world shifted beneath my feet and the stock market went into a free fall and venture capital all but shut down for nearly a year. I mentioned that we sold our position in Kyriba for > $1 billion but when we invested it had virtually no revenue. Over the past 2.5

IP 223

IP Intellectual Property IRR Cofounder 223

Both Sides of the Table

JUNE 5, 2011

Prices have definitely gone up in 2011 as depicted in the anecdotal chart below. So in 2011 as a startup company if you can generate lots of demand you can definitely raise an A round of capital (say $3 million) at a $7 or 8 million pre-money valuation or slightly higher whereas just two years ago you would have struggled.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

www.inc.com

SEPTEMBER 24, 2011

Dave Graham Business Venture Capital Private Equity GlobalLogic Inc. Venture Capital Firms. Because many of these businesses dont yet have revenue, valuation discussions arent very scientific, and the process requires some haggling. Arizona Bay has also blended equity payments with revenue-sharing deals.

Arizona 40

Arizona Equity Iowa Venture Capital 40

This is going to be BIG.

AUGUST 8, 2011

The point is, someone building a career in venture capital that doesn't include prior entrepreneurial success probably doesn't look like they have much to offer in the beginning. I've never been at a company that is scaling up to $20 million in revenue, so I'm not about to tell someone how to do that.

Venture Capital 110

Venture Capital PR Hiring Networking 110

Steve Blank

MARCH 31, 2014

As the venture capital business has come roaring back in the last 5 years, startups are awash in available capital. Companies horde cash and squeeze the most revenue and margin from the money they use. Instead of measuring success in dollars of profit, …firms focus on measuring capital efficiency. Innovation.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Berkonomics

NOVEMBER 11, 2021

This form of thinking has been unusually true during the current rise of social media platforms, where market share became the primary goal of a company, with revenues and profitability to follow later. Many, many companies accepting venture capital lost it all following this instruction. But beware.

Angel Investor 62

Angel Investor Valuation Early Stage Venture Capital 62

This is going to be BIG.

APRIL 27, 2010

So then, why are we teaching our students to trust fall without any revenues of their own to catch them? No revenues, no costs. You can tell me all you want about how many patents were filed at Columbia or wherever, or what they do in revenues—the future of the innovation in NYC is not in hard technology.

New York 116

New York CTO Hire Technical Review New York City 116

This is going to be BIG.

FEBRUARY 21, 2021

Or that venture capital is a meritocracy? This doesn’t take into consideration, however, that venture capital is a financial product—a product that works for some people and doesn’t work for others. What we do not know is how many people are deciding to seek out venture capital from each group.

Venture Capital 162

Venture Capital Cofounder Deal Flow Later Stage 162

Reid Hoffman

MARCH 23, 2021

Or, you might proactively change your business in a way that requires you to rebuild your dashboard to account for an additional revenue stream. Even if the answers aren’t definitive, they can help you distinguish between a helpful gut instinct and feel-good wishful thinking. COMMON DECISION-MAKING PITFALLS. DATA AND VC INVESTING.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

SoCal CTO

MARCH 22, 2007

Where I use LinkedIn: * I definitely use LinkedIn for Specific Requests - Ex. I definitely check people out using LinkedIn. However, it definitely has served as a hub. Open Source Business Models, speakers for Web 2.0 event I did last fall. I regularly do wine tastings here in Los Angeles with some interesting folks I know.

Technical Cofounder 150

Technical Cofounder Southern California Los Angeles CTO Hire 150

Both Sides of the Table

JULY 13, 2013

I guess if you do more than one, I guess by definition, that’s serial. So then when I wanted to go into venture capital, they said, “You can’t do that, you need to be in EIR.” So when I got into venture capital, I thought, “Well, what can I do that’s different?”

Cofounder 337

Cofounder Technical Cofounder San Diego Startup 337