Both Sides of the Table

SEPTEMBER 10, 2021

With the enormous changes to our economies and financial markets?—?how how on Earth could the venture capital market stand still? One of the most common questions I’m asked by people intrigued by but also scared by venture capital and technology markets is some variant of, “Aren’t technology markets way overvalued?

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

VC Adventure

MAY 5, 2022

I’m observing that IRR is a metric that is becoming an increasing focus in venture, replacing fund return multiple as the key metric of success. I understand the draw of IRR, and – as a fund draws to a close – there’s no question it’s an important metric. A lot changes in that period of time.

IRR 116

IRR Metrics Valuation LP 116

Startup Professionals Musings

NOVEMBER 4, 2015

The key elements of leadership in a company, both individual and organizational, are less tangible, but very critical in setting a market value for investment, acquisition, or going public. Every business and brand has unique requirements to fit into their market environment. Leadership brand development.

Leadership 120

Leadership Technical Review Due Diligence Valuation 120

Both Sides of the Table

JUNE 5, 2011

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I can’t control the market. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Steve Blank

MAY 29, 2011

Max and his partners interviewed and analyzed over 650 early-stage Internet startups. Today they released the first Startup Genome Report — a 67 page in-depth analysis on what makes early-stage Internet startups successful. longer to reach scale stage compared to a founding team of 2 and they are 2.3x

Technical Cofounder 333

Technical Cofounder Early Stage Startup Silicon Valley 333

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. What sized team can I afford in order to sell, market & provide service to these customers? But expanding beyond our core customers was going to take more effort than simply launching in new markets. How profitable is my product or service?

Operations 286

Operations New York City Technical Review Startup 286

David Teten

DECEMBER 3, 2019

In liquid markets, most of the calories expended on technology and analytics are focused on trade selection, or “ origination ”. I use another live Google doc to maintain my database of companies I’m marketing to other VCs. 2) Market . Many tools designed for B2B marketing in general are also relevant to investors.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Startup Professionals Musings

MARCH 24, 2023

The focus at this level, primarily in companies that have a long history of success, usually in very stable markets, is to continue sustaining and exploiting existing advantages. I see this often in highly regulated markets, and ones driven by bureaucrats. Maturing proficiency with innovation metrics.

Silicon Valley 277

Silicon Valley Government Early Stage Valuation 277

David Teten

JANUARY 19, 2021

This structure allows for alignment on the front end, and real-time flexibility for performance metrics,” says Samira Salman , a family office investor and advisor. . Flexible VCs have created structures based on other company performance metrics than revenues, such as profits or founder salaries. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Steve Blank

FEBRUARY 26, 2020

Every year I teach classrooms full of students who leave class understanding the basics of how to search for product/market fit—and thinking their next goal is to “get funded.”. You (think) you have product-market fit with real customers and real revenue and need money to grow and expand. That’s a mistake.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? Ok, let’s jump in. State of VC: are we in a bubble?

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? Ok, let’s jump in. State of VC: are we in a bubble?

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Steve Blank

MARCH 17, 2020

If you’re an early stage company, that number may be zero. This math works in a normal market…. Unfortunately, it’s no longer a normal market. If you are selling to businesses (a B-to-B market) have your customers’ sales dropped? What are the new financial metrics? The World Turned Upside Down. is in order.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices.

Asia 132

Asia Silicon Valley India Term Sheet 132

David Teten

SEPTEMBER 23, 2017

An investor had few hard metrics other than the actual financials, and little technology to make the process scaleable. Over the past few decades, better metrics became available, and investors could take a more analytical, data-driven approach. 1) Market fund. .” Historically, investing was a manual, artisan process.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Tim Keane

JANUARY 12, 2010

Bottom Up Market Sizing » January 12, 2010. Term-sheets and Valuations: Thinking about Negotiations. The Valuation Question. When companies seeking their first round of serious funding are good enough to receive a term-sheet from an investor, the first issue that always arises is valuation.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

View from Seed

SEPTEMBER 14, 2021

Warning – this assumes some basic knowledge of VC performance metrics. Will Quist did a great job of explaining this market rhetoric in this thread. The three-question framework goes as such: Q: How much tech-related market cap will be created in the next 10-20 years? Ok, let’s jump in. State of VC: are we in a bubble?

Valuation 156

Valuation Pre-Money Valuation Distribution Early Stage 156

Both Sides of the Table

MAY 23, 2012

There are obvious reasons the industry has had less-than-desirable returns, including: massive over-funding of the sector, huge increases in inexperienced venture capitalists that took a decade to peter out, and the massive correction in the value of the public stock markets that closed many exit opportunities for half a decade.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Gust

JULY 23, 2014

So even if my own mother asked me to meet with you, and you were pitching me a biotech opportunity for a $10 million investment at a $90 million valuation, I might take the meeting, but it wouldn’t be particularly useful for either of us. Can you get to break-even somehow, and live to fight another day?

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

Version One Ventures

JULY 20, 2015

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. Our assumptions for this valuation: Scale: > $1b GMV. Etsy had a market cap of about $2.22B as of July 20, with a revenue multiple of 8.2 So what about early-stage marketplaces? Take rate of about 10-15%.

Valuation 60

Valuation Early Stage IPO eCommerce 60

K9 Ventures

JUNE 5, 2015

There were massive late stage rounds because all the big funds wanted companies which already had traction. Low supply of companies with traction drove the valuations and deal sizes up. Seed stage was super tough. Valuations are rising to match. Your early stage investment portfolio may no longer really be early stage.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Cracking the Code

JULY 6, 2007

SaaS business metrics: why are they different? Different models require different performance metrics. David Cowan , the Bessemer Managing Partner who pioneered early stage investments in automated subscription services ( Verisign , Postini , Netli.), The MRR is a great metrics, but it can be perfected.

Software Review 66

Software Review Metrics Valuation Technical Review 66

Agile VC

MAY 26, 2011

The market size for online advertising, e-commerce, and web premium services are 1/10th to 1/3rd the size they are today. To give you a sense, for 2002 the entire US online ad market was $6B and had shrunk year over year (it was $25B+ for 2010). It was a pretty good valuation for the time. It was a $4.7M link] leehower.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Feld Thoughts

NOVEMBER 18, 2013

Following is his advice to early stage entrepreneurs for creating structure in their company. One of the key benefits of doing this early on is that when it comes time to raise that next round, the people you’ll need the most help from are already involved and engaged. It’s too early for that s**t.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Steve Blank

NOVEMBER 5, 2009

Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. What are Early Stage VC’s Really Asking? Do they believe you have a big enough vision and market. Tons of advice is available on how to pitch , present and market your company.

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

YoungUpstarts

AUGUST 30, 2017

There is lots of it available in the market. Valuations are always astronomical for other companies (i.e., If your venture continually has too little of it, you either are spending too much time looking for it, your valuation is stupid, your management team is inept, your venture is not worthy, or more likely all of the above.

Warrant 195

Warrant Valuation Metrics Startup 195

Both Sides of the Table

SEPTEMBER 18, 2014

There were no metrics. Him: On metrics. Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 16, 2014

What does it actually mean that metric X is better than average and metric Y is below? Measuring yourself against the average or median isn’t much better. ” If you can answer in the affirmative to all that, you have your answer. If you not even sure how to reason in this manner, that is your next big challenge.

Metrics 246

Metrics Early Stage Retention Revenue 246

Berkonomics

NOVEMBER 4, 2016

Originally created in the mid 1990’s to help with the imprecise problem of how to value early stage companies, especially those in technology, I developed what soon became known as “The Berkus Method” when published in the popular book, “Winning Angels” by Harvard’s Amis and Stevenson with my permission in 2001.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

Berkonomics

JUNE 16, 2022

We can invent lots of metrics to measure progress for a leader, including revenue, profit, employee satisfaction, cost containment, percentage of available market, and more. But these are all individual roads to Rio – which is the stated goal for the organization. What is your leadership end game goal?

Later Stage 62

Later Stage Early Stage Valuation Acquisition 62

Austin Startup

MAY 19, 2018

 —  @birsic So without further ado, here are my thoughts on some dos and don’ts for early stage investors. Disclose intentions early It’s not a big deal if you’re doing diligence on a competitor. Don’t boomerang founders If you have specific metrics you look for in early stage companies.

Founder 75

Founder Early Stage Software Review Deal Flow 75

Hippoland

AUGUST 31, 2018

Then I asked him about his metrics, which are good, but they are were not at series A level. All of those investors told him that he was too early. So, I thought it might make sense to take a step back and talk about all the stages of early stage fundraising here in the Silicon Valley. This was surprising to me.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

500hats.com

AUGUST 2, 2012

While institutional LPs know big changes are happening, most focus too much on 1) increasing/decreasing fund size or 2) marketing + branding as the major trends. These two divergent groups have optimized for very different market conditions and behaviors. This is a long piece, so if you’re not a fan of inside baseball, skip it.

Silicon Valley 74

Silicon Valley Early Stage Venture Capital Valuation 74

View from Seed

JUNE 10, 2020

When the culmination of an accelerator is a Demo Day show, then that is what teams prepare for and the resulting metrics by which they’re measured. The partners at NextView hold sessions more than once per week to push the participants’ thinking and actions to strive towards making significant advances finding true-product market fit.

Cofounder 177

Cofounder Syndicate Syndication Alabama 177

Reid Hoffman

MARCH 23, 2021

The metrics from the dashboard are the key inputs for collective decisions. You can always instrument your business and gather metrics, but that doesn’t mean the data you gather will be useful. For example, if you haven’t achieved product-market fit, instrumenting every aspect of customer acquisition is overkill.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

The Equity Kicker

JANUARY 10, 2020

Nic Brisbourne is Managing Partner at Forward Partners, the UK’s leading early-stage VC, currently supporting the UK’s next generation of AI, e-commerce and marketplace businesses. Every good VC looks for the same three things: a great team, a great product, and a large and attractive market. That’s still true in some markets.

Partner 68

Partner Early Stage Portfolio Metrics 68