Both Sides of the Table

JUNE 5, 2011

But the reality is that you’re faced with two problems: 1) the earlier the stage the riskier and thus more write-offs so you need to have enough ownership percentage in your winners to make up for the losers and 2) the earlier stage your check the more likely the company will need many more funding rounds behind you and thus you face dilution.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

ConversionXL

AUGUST 30, 2018

The key is to connect user research to an improved user experience and, in turn, an increase in customer retention, leads, or any other metric for which C-suite members are accountable. The finance team understands that content customers are less likely to churn and destabilize revenue flows. What about user personas ?

Design 111

Design Framework Product Development Technical Review 111

Austin Startup

MARCH 26, 2019

These strategies can be useful in increasing initial conversions from your ads and website traffic, but offering large discounts too early in the life of the company will lower your gross margins and CAC, both of which will affect your unit economics and future financing conversations. This serves as the tracking tool for unit economics?

Technical Review 49

Technical Review Software Review China Acquisition 49

The Next Web

FEBRUARY 27, 2014

This is typically in conjunction with an upcoming financing or pending takeover offer. A competitive commodity business, or a “me too” story , will be less demanded, and hence, will require a lower valuation to close your financing. Freshman are a piece of paper to beta site (bootstrap financed—raise $50K to $500K).

Valuation 167

Valuation Forecast Seed Stage .Net 167

K9 Ventures

OCTOBER 10, 2017

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? It’s a legitimate stage of financing in the venture eco-system as of this writing (October 2017).

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. . This is why a bottom up approach is more credible.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. There were no metrics. Him: On metrics. Revenue multiple? In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. Me: More dilution? So a convertible note was easier.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

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. For all of these, the metrics and growth need to be the result of legitimate PMF and execution, not tricks.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. By the first quarter of 2016, the late-stage financing market had changed materially.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Occam's Razor

FEBRUARY 7, 2022

You can sign up here – I donate all revenues to charity. Don’t test for a vanity metric. Improves conversion rate by 1.2% (huge by the way) and that is, let’s say, $128,000 more in revenue (also wonderful). One of my solutions is to send an email out to Finance, Logistics, Customer Support, a wide diversity of employees.

Analytics 101

Analytics Programming Global Campaign 101

The Next Web

SEPTEMBER 29, 2013

You’re learning what the metrics that matter are, what your funnel looks like, and what actions you want your prospects to take. It should never be the financing event that dictates whether to shift or not. Clearly investors should promote the idea that startups need to have clear metrics for terminating the discovery mode.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Ben's Blog

AUGUST 17, 2020

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?” A multiple is a company value divided by a metric. cash flows beyond that forecast period).

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

maplebutter.com

JANUARY 8, 2013

Written By Dan Martell on February 2nd, 2012 | Category: Hiring LeanStartup Marketing Metrics Startup Life | 6 Comments. Building Metrics / Usage Reports / KPI 3. Product/Metrics (70%/30% time) * Get your product activation (sign-up + meaningful action) to 60% * then, Get your product retention to 20% weekly. Why do I do it?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

This is going to be BIG.

JUNE 2, 2010

Historically, that was one where the business was clear and there was some initial revenue, even if slight. On top of that, when you set out to raise a certain size round, and the round grows on you, you usually wind up taking a lot more dilution than you intended. Drive one key metric. Try to prove one thing. Is it users?

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

Seeing Both Sides

OCTOBER 24, 2015

Many blogs suggest you simply divide 1 by your monthly churn rate to get to a number of months of duration that you can expect to collect revenues from your customer. Thus, if your average monthly churn rate is "c", the number of months of revenue you will receive over the lifetime of a customer is 1/c. A monthly churn rate of 1%?

Churn Rate 20

Churn Rate Early Stage Revenue Metrics 20

crowdSPRING Blog

DECEMBER 13, 2018

But if you want to accelerate growth and improve your revenues and profits, you need to up your game. There are three parts to a good competitive analysis: (1) defining the metrics and identifying the competitors you’re comparing, (2) gathering the data, and (3) the analysis. Start by defining what metrics are important.

Marketing 162

Marketing Charlotte Naming Design 162

Seeing Both Sides

JANUARY 13, 2015

My boss and mentor from Open Market, Gary Eichhorn , made the entire management team read it in the 1990s to hammer home its important lessons as we stumbled through the chasm on our way to scaling from zero to nearly $100 million in revenue in a few years. Financing: holy crap - we are running out of money in 6 months!

Mezzanine 20

Mezzanine IPO Finance Business Model 20

BeyondVC

JUNE 11, 2007

In the last six months, we have augmented some of our existing venture financing with venture debt as the market has become quite competitive which means pricing and terms are getting more attractive for all of us. The trick for entrepreneurs is to look at bringing on debt concurrent or soon after your close of equity financing.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60