Both Sides of the Table

SEPTEMBER 28, 2014

it is also the title of a fabulous book from Internet 1.0 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.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

JUNE 5, 2011

Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. But to help with the explanation I’d like to put down some markers of typical Internet pre-money valuations done in major US markets (San Fran, NY, LA, etc.)

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

JUNE 22, 2011

The fact that today’s Internet bubble does not represent all companies does not disprove its existence. Ah, but today’s Internet companies have real revenue! New investors hate down rounds. So I’m not advocating panic or a need to rush your funding round. I said that at the Founder Showcase, too.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

ReadWriteStart

JUNE 1, 2020

Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. Instead of funding, you pay the investors a structured royalty, which is a portion of the sales. But, in subsequent rounds of funding inflated valuation will be normalized resulting in a down round.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing.

Lean 250

Lean Silicon Valley Startup RSS 250

Scalable Startup

OCTOBER 26, 2011

The current phenomenon of Internet multi-millionaires recycling their money back into the startup markets is creating “super” angels like Ron Conway. It’s no longer based on a hunch, unless the company is in trouble and needs money to finish what the first round started.

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

abovethecrowd.com

APRIL 20, 2016

The same thing happened to many Internet stocks. Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40