Steve Blank

MAY 19, 2015

Organizational debt is all the people/culture compromises made to “just get it done” in the early stages of a startup. I had lunch last week with Tom, the CEO of a startup that was quickly becoming a large company – last year’s revenue was $40M, this year likely to be $80M maybe even $100 million in ad revenue.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Startup Professionals Musings

JULY 22, 2020

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. On the other hand, if you are a new entrepreneur, still in the idea stage, professional investors will only tell you to come back later when you have traction (customers and revenue).

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

The Startup Magazine

SEPTEMBER 12, 2019

While the rewards may be a boon to their company in the short term, the consequences of accepting outside funding too early can be debilitating. There’s a reason why I refer to early-stage VC funding as vulture capital, and to be honest it’s pretty accurate. Just because you can afford to hire, doesn’t mean that you should.

Early Stage 85

Early Stage Venture Capital Bootstrapping Pre-Money Valuation 85

Both Sides of the Table

APRIL 26, 2016

In product business it is often measured over multiple purchases and assumptions are made about the repeat rates and in the enterprise or services world LTV can be based on churn rates, which are notoriously hard to predict in an early-stage business. In SaaS (or any recurring revenue business) this is also a very difficult task.

Metrics 150

Metrics Cost Acquisition Startup 150

Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. If you’re an early stage company, that number may be zero. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. This math works in a normal market…. Laying off people?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Up and Running

SEPTEMBER 19, 2017

They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

VC Cafe

MAY 29, 2022

Building on my post on ‘ Advice for startups in a downturn (May 2022 edition) ‘, this week I continued to follow with interest the impact of the current correction on startups and venture capital, particularly in early stage. Layoffs and hiring freezes have started. Sequoia’s Adapting to Endure.

Venture Capital 183

Venture Capital Early Stage Valuation Startup 183

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation?

Valuation 100

Valuation Stock Options CPA Merger 100

Startup Professionals Musings

AUGUST 19, 2018

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. On the other hand, if you are a new entrepreneur, still in the idea stage, professional investors will only tell you to come back later when you have traction (customers and revenue).

Angel Investor 184

Angel Investor Intellectual Property Investment Bankers Private Equity 184

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. Seed stage was super tough. In addition, the competition for and the cost of hiring people, especially in the San Francisco Bay Area, has gone up dramatically. Valuations are rising to match. more traction means it takes longer. The Epilogue.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

David Teten

SEPTEMBER 23, 2017

In venture capital in particular, early-stage companies are often operating in frontier industries, where the rules are unpredictable and conventional analytic frameworks may be misleading. The Pocket Negotiator is very early-stage attempt to aid in the negotiating process itself. . Accompany focuses on this use case.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Austin Startup

FEBRUARY 13, 2019

Convertible debt is best when you don’t yet have revenue or a good sense for your valuation, because it allows you to raise money on the basis that the valuation will be set one to three years in the future, based on execution of the early business model.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. NVV: Let’s talk about the seed stage specifically. Traction and revenue?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

JULY 4, 2014

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. On the other hand, if you are a new entrepreneur, still in the idea stage, professional investors will only tell you to come back later when you have traction (customers and revenue).

Angel Investor 232

Angel Investor Intellectual Property Investment Bankers Private Equity 232

Austin Startup

AUGUST 20, 2017

Early stage startups have to survive one day at a time and are often presented with limited choices of the moment that enable them to continue. Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 16, 2014

Still… Now Slack has been valued at over a billion dollars, less than a year after launch, every month adding more than a million dollars of annual recurring revenue. “It’s not fair,” we all said to ourselves. Well, at least they had to toil for four years instead of two. They’re next!

Metrics 246

Metrics Early Stage Retention Revenue 246

Steve Blank

JUNE 15, 2011

A tech bubble is the rapid inflation in the valuation of public and private technology companies that exceeds their fundamental value by a large margin. Today, the signs of the new bubble are the Linked-In initial public offering (IPO), Facebook’s stratospheric valuation and the rapid rise of early-stage startup valuation.

Silicon Valley 327

Silicon Valley Stealth Valuation Mississippi 327

Startup Professionals Musings

AUGUST 13, 2016

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. On the other hand, if you are a new entrepreneur, still in the idea stage, professional investors will only tell you to come back later when you have traction (customers and revenue).

Matching 120

Matching Angel Investor Intellectual Property Investment Bankers 120

Austin Startup

JANUARY 25, 2020

This was my time at a Wall Street firm that had hired me after I applied for their Junior Stockbroker position, a little while after I graduated from college. I remember enjoying reading his book “ Delivering Happiness ,” the story behind how he led Zappos and drove it to a billion dollars in revenue before Amazon bought it.

Delaware 62

Delaware SEC New York City New York 62

Up and Running

JULY 22, 2019

A telling success factor for new businesses looking to make an impact in their industries is whether they can attract investment at an early stage of development. . More specifically, companies are able to see notable success when they allow investors to engage early on. Start early.

Canada 78

Canada Early Stage Valuation Finance 78

Up and Running

FEBRUARY 8, 2016

While there are dozens of lessons I could take away from these entrepreneurs’ experiences, I want to highlight three common mistakes founders make in the early stages of a startup. They also had greater and more rapid increases in valuation at successive rounds of venture capital funding. There are 1.7

Entrepreneur 60

Entrepreneur Software Review Balance Sheet Partner 60

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 21, 2011

The question is further complicated when the new hire is getting a salary. Here’s why: Suppose a new hire just quit a job paying $10,000/month and agrees to take $3,000/month for a year with you, after which time (assuming the company does as well as everyone hopes) she’ll be raised back up to $10,000/month.

Equity 276

Equity Salary Hiring Institutional Investors 276

K9 Ventures

APRIL 9, 2014

Massive late stage rounds The late stage (Series B and Series C) investors are hunting for breakout companies that have serious traction. The low supply and high demand is driving up the valuations and deal sizes. Threshold for an IPO is higher Ten years ago, if you had $20M in revenue you were ready to go public.

Mezzanine 134

Mezzanine Seed Stage Early Stage IPO 134

View from Seed

FEBRUARY 19, 2015

I called the recruiter running the search and told him I was going to step down and hire a CEO. Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. So, in order to hire a CEO, we have to give someone their first shot at the job.”

Founder 120

Founder Startup Cofounder Business Model 120

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Would I hire a broker? That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business. I have the weeks to follow to make mine.

IP 54

IP Intellectual Property Investment Bankers Product 54

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? Would I hire a broker? That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business. I have the weeks to follow to make mine.

IP 48

IP Intellectual Property Investment Bankers Product 48

Reid Hoffman

MARCH 23, 2021

If they’re the kind of infinite learner who uses their past experiences to make their decision-making better, they have a huge advantage when it comes to everything from hiring to strategy to sales, making them an even better bet the second time around. The problem was that Groupon’s revenue growth was a false positive.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

Transformify

AUGUST 27, 2017

Your team is directly correlated with the valuation of your startup. All of the above is true, but it is also true that many startups have failed because they hired too early, too fast, or fired too late. Then the hiring begins. Hire full-time employees. It all starts with the founders. The downside?

Hiring 64

Hiring Software Review Burn Rate Startup 64

Steve Blank

MAY 13, 2010

After a bit more discussion, I discovered the “problem in getting traction” meant revenue was zero. But I knew getting customer input was important so I hired this great consultant who told me all about the features customers need.“ We’re in Customer Validation but we can’t seem to close a deal.”

Founder 199

Founder Cofounder Business Model Customer Development 199

Software By Rob

JANUARY 8, 2019

Hundreds and hundreds of tweets, re-tweets, likes, Hacker News upvotes, email responses…it was immediately obvious that there is pent up demand for this kind of alternative early-stage startup funding. 2: We Focus on Early Stage SaaS. We’re a SaaS accelerator, and accelerators focus on early-stage companies.

Early Stage 46

Early Stage Valuation Seed Capital Revenue 46

VC Cafe

SEPTEMBER 26, 2022

So in terms of hiring, get people that can help you build the product faster… anything that minimizes the time between observing a need or a problem, and the execution or the fix for it.” ValuatIon should be a function of value, not ego. A good way to think about valuation in seed/pre-seed is to reverse engineer the next round.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

VC Cafe

JUNE 10, 2022

Until now, early stage startups were relatively unaffected. According to new research by Pitchbook , the trickle down effect has already started in seed and series A startups with round sizes and valuations shrinking in size compared to 2021. Forget about Unicorns (valuations), it’s all about Centaurs ($ ARR).

Valuation 151

Valuation Marketing Venture Capital 151

Eric Friedman

JUNE 11, 2019

Whether a fundraising event, hiring, or sales/partnership opportunity- these can be especially useful to make all parties move faster. Partnership Forcing Functions can be tricky because they typically don’t involve revenue, which drives most business decisions, but there are other reasons to do the deal.

Term Sheet 68

Term Sheet Stock Options Early Stage Agile 68

David Teten

DECEMBER 3, 2019

Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. The Pocket Negotiator is very early-stage attempt to aid in the negotiating process itself. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Up and Running

OCTOBER 24, 2016

The cheerleading tech press and massive valuation rounds have built a mystique around startup culture. The allure of this narrative is obvious: the smartest kids in the room get to hire their friends and build a company with other people’s money. Minimal hiring. Your company needs to be profitable from a very early stage.

Startup 60

Startup Venture Capital Salary Equity 60

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million. You''re ending up at a post-money valuation of $10mm versus $5mm.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60