David Teten

AUGUST 19, 2019

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Rational burn profile, up to 50% of revenue at close, scaling down. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. Whereas New York City has very high real estate costs and very high salaries, launching in Chicago and D.C. An example of the systems companies build are pricing & revenue management tools to best help to optimize yield. were more distributed.

Operations 286

Operations New York City Technical Review Startup 286

ReadWriteStart

JUNE 14, 2012

If a candidate for your technical lead was a CTO at a big company, for example, but he or she says they want to manage and not code, then he or she is not the right fit for an early-stage startup]. Without these two players, you will have a much lower chance of success. It’s worth spending time on recruiting.

Technical Review 159

Technical Review CTO Hire Software Review Startup 159

Startup Professionals Musings

APRIL 10, 2016

Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup. If the company has been around for more than a couple of years, and still has no product or revenue flow, there better be a good explanation. Think twice before you jump in.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Steve Blank

MARCH 17, 2020

And how much are variable expenses (salaries, consultants, commission, travel, AWS/Azure charges, supplies, etc.?). 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. The World Turned Upside Down.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Up and Running

JULY 28, 2022

Small Business Administration , an organization is considered to be a small business if their: Firm revenue ranges from $1 million to $40 million Number of employees is between 100 and 1,500. The right time for drafting a founders agreement is in the early stages of business. According to the U.S.

Small Business 167

Small Business Intellectual Property Cofounder Software Review 167

Startup Professionals Musings

APRIL 8, 2015

Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup. If the company has been around for more than a couple of years, and still has no product or revenue flow, there better be a good explanation. Think twice before you jump in.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Both Sides of the Table

MAY 19, 2013

For the entire first year after I funded the company he refused to take a salary and I had to admonish him to make sure he paid his expenses. Yet our initial customer success didn’t translate into big revenue growth and we faced issues such as: Do we support developers, end-users or both? Reid weighed in eloquently on this topic.

Technical Review 303

Technical Review Cofounder Analytics Founder 303

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

David Teten

DECEMBER 16, 2015

The most common financial metrics ffVC asks companies to compare vs. budget are: Gross Revenue. For early stage companies, the metrics that matter might typically center around activation, engagement and retention. Monthly Recurring Revenue (MRR). Average Revenue Per Account. Identify the metrics that matter.

Metrics 60

Metrics Analytics Balance Sheet .Net 60

OnlyOnce

AUGUST 3, 2023

(Post 1 of 4 in the series of Scaling CPO’s) In most startups, the HR function starts out as tactical, because you have to get people hired and paid, and while you might have a founder or early-stage employee who can do these things, often these tasks are frequently outsourced to a PEO. But those things won’t help you scale.

Hiring 62

Hiring Metrics Leadership Early Stage 62

OnlyOnce

MARCH 14, 2011

We all knew if the feature or function that the client was asking for was within the realm of the possible. • We were very, very focused on creating customers and revenue —We were a startup. If we drove revenue above costs, we got to take home a salary. It was stressful, but productively stressful and fun.

Software Review 67

Software Review Development Team Review Later Stage Technical Review 67

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

Small Business Force

SEPTEMBER 10, 2017

Whether you’re an early-stage company or have been around for ten years, for entrepreneurs, leading and managing a small business, especially its growth, is never an easy task. We had some nice sustained success with six consecutive quarters of record revenues and earnings. But like Lego, we got surprised.

Small Business 32

Small Business Leadership Salary Forecast 32

Startup Professionals Musings

NOVEMBER 26, 2012

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. So what magic can the founders use to justify a $4M valuation (or even the $1M valuation) at this early stage? This one doesn’t help NewCo just yet.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 21, 2011

The question is further complicated when the new hire is getting a salary. Typically the salary is less than market with the balance given in the form of equity, but again how do you compute that when the stock is, today, of no value? What about $Y/mo? &# Hard to know, but an important question for a bootstrap startup to answer!

Equity 276

Equity Salary Hiring Institutional Investors 276

ConversionXL

MAY 27, 2022

Only around 10–15% of B2B leads turn into paying customers, and it’s because tactics optimizing for the early stages of the funnel only cater to early-stage goals. It’s their job to implement a holistic approach to growth that encompasses both marketing and sales and looks at every stage of the buyer’s journey.

Demand 95

Demand Management B2B Campaign 95

Hunter Walker

JANUARY 15, 2016

I wish I could claim I deftly foresaw this, but I was just seeking recurring revenue to to cover OneMatchFire’s office expenses. By the end of 2004 I had brought on two co-founders: John Vars – who is now the Chief Product Office at TaskRabbit, and Steven Reading took over Sales and Revenue.

Technical Review 48

Technical Review Startup Cofounder SMS 48

The Next Web

MARCH 8, 2014

Jason Lemkin is the Managing Director at Storm Ventures , a venture capital firm focusing on early-stage enterprise and IT companies, including MobileIron , Marketo and GuideSpark. Specifically, it feels eerily similar to how I felt when I was CEO at EchoSign when we were at about $4m in revenue.

Partner 138

Partner Burn Rate Early Stage IPO 138

Startup Professionals Musings

SEPTEMBER 30, 2011

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. So what magic can the founders use to justify a $4M valuation (or even the $1M valuation) at this early stage? This one doesn’t help NewCo just yet.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

Startup Professionals Musings

SEPTEMBER 5, 2016

Don’t quit your day job until the revenue is flowing. Investors expect nothing less than a full-time commitment, even in the early stages when the business model has not yet been proven. You can use it best to entice outstanding team members and partners, building a level of commitment you don’t get with salaries alone.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

K9 Ventures

APRIL 9, 2014

Threshold for an IPO is higher Ten years ago, if you had $20M in revenue you were ready to go public. If you have <$100M in revenue, you’re probably going to stay private. Taken together, it means an early stage company needs to survive longer, with higher expenses. And the hiring costs are higher.

Mezzanine 134

Mezzanine Seed Stage Early Stage IPO 134

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. At early stages you probably don’t have an assembly line and can’t clearly define any particular job. But, later on they often wish they had the ability to erase many of them.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Both Sides of the Table

JULY 13, 2013

By the way, the salary, which was a good salary, was $27,000 entry salary, and engineers were paid $31,000 to $35,000. [00:10:30] You’ve got entrepreneurs and founders who are really – a lot of them are in the very early stage of their startup. They paid engineers $4,000 more entry-point.

Cofounder 337

Cofounder Technical Cofounder San Diego Startup 337

Gust

NOVEMBER 18, 2012

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. So what magic can the founders use to justify a $4M valuation (or even the $1M valuation) at this early stage? This one doesn’t help NewCo just yet.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Startup Professionals Musings

SEPTEMBER 6, 2010

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage blogs and other resources, and maybe even pay themselves a salary. So what magic can the founders use to justify a $4M valuation (or even the $1M valuation) at this early stage?

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 4, 2012

I mean, it’s easy to talk to very little bands and just say I feel like the amount of revenue for you is very little. Like with more people who are not taking salary, you can literally do twice as much. And that’s really important for an early stage start-up to be able to move as fast as possible etc.,

Cofounder 199

Cofounder Technical Review Chicago Technical Cofounder 199

Altgate

DECEMBER 17, 2009

it's up to the Board or CEO) One or more financial metrics Balanced scorecard For very early stage startups (e.g. pre-revenue and maybe even pre-product), I recommend a discretionary plan, particularly when you're dealing with annual plans. then you can start to think about a balanced scorecard approach to your pay plan.

Venture Capital 47

Venture Capital Metrics Startup Software Review 47

socialmatchbox.com

OCTOBER 23, 2010

If you post up an ad to an online job board asking for someone to join your very high risk early stage startup company the odds of getting someone who decent are slim to none. at this stage. The generally accepted hourly wage calculation used by the staffing industry is Annual Salary divided by 2000 Hours.

Part-Time VPE 41

Part-Time VPE Sweat Equity DC Washington 41

The Next Web

DECEMBER 30, 2013

In January, Denver will become one of the few American cities that allows its residents to purchase and recreationally consume marijuana, a move that is expected to create jobs and generate tax revenue. percent, typical tech worker income tax in Denver is half of that in California (9.3 city), restaurants and nightlife.

Denver 166

Denver Silicon Valley San Jose Colorado 166

Growthink Blog

MAY 10, 2012

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. The five main stages include the following: 1. Early Stage Investment (Series A & B) 4. Pre-Seed Funding 2. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Both Sides of the Table

SEPTEMBER 2, 2009

A friend of mine is a serial entrepreneur and is running a high-profile, early stage company in NorCal. Founders however are asked to take low salaries and never really get back the time they worked for free. We should end the year with a few million in fully recurring revenue and we’re projected to double next year.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Up and Running

OCTOBER 24, 2016

The goal for a lifestyle business is to build sustainable revenue streams that are set up to operate on their own. Remember to factor in costs in addition to salaries like payroll taxes, Social Security, and Medicare. Your company needs to be profitable from a very early stage. A clear end goal.

Startup 60

Startup Venture Capital Salary Equity 60

www.forentrepreneurs.com

FEBRUARY 2, 2010

To compute the cost to acquire a customer, CAC, you would take your entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that you acquired in that period. (In Most of the public companies like Salesforce.com, ConstantContact, etc.,

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

YoungUpstarts

SEPTEMBER 7, 2014

Revenue Growth. Enterprise startups must have processes in place to monitor revenue growth. According to a Pacific Crest survey , the average year-over-year revenue for enterprise startups is 89 percent. If you’re doubling revenue every year, you’re in great shape. Payback Period. Follow the company on Twitter.

Metrics 219

Metrics Churn Rate Startup Acquisition 219