Startup Professionals Musings

JULY 27, 2018

I’m still amazed at how many technical entrepreneurs don’t have a business pitch, and offer me their product pitch or product spec instead. Potential investors love to see gross margins in the fifty percent range or greater, with recurring revenue through subscriptions, follow-on sales, or services. But it’s critical to have one.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

Startup Professionals Musings

AUGUST 17, 2014

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they can’t deliver, and having no clue what investors might consider reasonable. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Steve Blank

JUNE 11, 2013

For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. What are revenue strategy and pricing tactics? William Shakespeare.

Venture Capital 334

Venture Capital IRR Liquidity Event Business Model 334

Startup Professionals Musings

MAY 28, 2013

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they can’t deliver, and having no clue what investors might consider reasonable. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Startup Professionals Musings

SEPTEMBER 7, 2015

Entrepreneurs often ask me why investors expect financial projections for a new startup even before the product is built and while the market is still being defined. I recently saw a startup projecting $50 million in revenue for the first year. Revenue projections show penetration of target opportunity. Neither extreme is good.

Liquidity Event 120

Liquidity Event Startup Initial Public Offering Equity 120

Up and Running

SEPTEMBER 19, 2017

That is to say, they’d want to be able to control costs and revenues at a high level. Background: Adam Carlson is a serial entrepreneur who has successfully raised private capital at three different technology startups. Consequently, he passed. Rule 3: Leverage your round 1 successes to better round 2 terms. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

AUGUST 13, 2012

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Industry & market sizing.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Gust

AUGUST 10, 2014

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they cant deliver, and having no clue what investors might consider reasonable. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Steve Blank

JUNE 11, 2013

For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. What are revenue strategy and pricing tactics? William Shakespeare.

Venture Capital 226

Venture Capital IRR Liquidity Event Business Model 226

Startup Professionals Musings

AUGUST 7, 2015

When pitching to investors, entrepreneurs always seem to start with a customer pitch, then add a slide or two about the business. Investors are business experts, while the entrepreneur is more likely the product expert. Projected revenues and expenses over the strategic period.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

MAY 13, 2011

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Industry & market sizing.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Steve Blank

JULY 2, 2009

Entrepreneur-in-Residence After SuperMac I had been approached by one of our venture investors to be an entrepreneur in residence (EIR), a Silicon Valley phrase which says one thing but means another. I offered to introduce him to the firm whose Entrepreneur-in-Residence offer I had just accepted. We understood none of this.

Silicon Valley 120

Silicon Valley Technical Review RSS Software Review 120

Berkonomics

APRIL 3, 2014

Each has a process in place to accept applications or recommendations for investment into new companies, and to review these and make decisions based upon their exploration, previous experience in the field, knowledge of the company or industry, or about individual entrepreneurs. Raising money'

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Both Sides of the Table

MARCH 3, 2013

We talked about how business school historically hasn’t positioned entrepreneurs well for success. I wrote about that before in a post about “ whether MBAs are necessary for entrepreneurs. His class reading lists could be a primer for any entrepreneur, not just MBAs. ” No royalty paid until there is revenue.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

Steve Blank

JULY 19, 2010

I’ll offer that both entrepreneurs and VC’s have the wrong model for founding CEO equity compensation. Where’s My Liquidity Event. As a board member I negotiated with founding CEO’s over vesting when I thought it was their time to go. At best this is an argument where no one wins, at worst it’s like a nasty divorce.

Vesting 255

Vesting Liquidity Event Venture Capital Founder Vesting 255

Steve Blank

MARCH 18, 2011

VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. The reward for doing so was a liquidity event via an Initial Public Offering. For VC’s and entrepreneurs the gold rush to liquidity was on.

Internet 334

Internet IPO Silicon Valley Agile 334

Startup Professionals Musings

FEBRUARY 13, 2016

Entrepreneurs who are looking to attract investors need to develop and pitch a plan -- preferably written -- that answers every potential investor question about your startup before it is asked. What are your forecasts for revenue, expenses and cash flow? If you don’t plan a liquidity event, you won’t find many investors interested.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Gust

AUGUST 5, 2012

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Industry & market sizing.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Startup Professionals Musings

APRIL 22, 2010

Many entrepreneurs scare away potential investors by claiming that their technology represents “truly disruptive technology.” Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Industry & market sizing.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Berkonomics

DECEMBER 19, 2013

In the process of raising funds to create and develop a business, entrepreneurs make many statements to those they seek to attract as investors. Revenue projections: What will happen to the company if the revenues and earnings projected on a worst case basis are not achieved as predicted? By: Arthur Lipper. a 33% discount.

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

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. A company can have value, even if there is no current income or revenue.

Valuation 100

Valuation Stock Options CPA Merger 100

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Both Sides of the Table

SEPTEMBER 27, 2010

These days that’s not the case and it’s a great outcome for entrepreneurs and for innovation. A: Only because it’s a nicer branding for entrepreneurs. I totally agree and have been arguing this to entrepreneurs for years. I always counsel young entrepreneurs to start on the local train.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Redpoint was understandably disappointed that it didn’t get the chance to see its MySpace investment through to an IPO or later liquidity event at a higher multiple.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Seeing Both Sides

SEPTEMBER 15, 2015

Decades ago, the thesis of Yossi Vardi , a prolific technology entrepreneur who has invested in 75 Israeli startups, was that Israeli entrepreneurs should seek quick exit opportunities through global corporations interested in buying a window into Israeli talent and technology. We think so. Today, this thesis is less relevant.

Cofounder 20

Cofounder Technical Review United States 20

The Next Web

SEPTEMBER 29, 2013

Howard Marks is a serial entrepreneur and Managing Director of LA tech accelerator StartEngine. It should never be the financing event that dictates whether to shift or not. They argue that as an entrepreneur you’re always being chased by competitors and want to be a first mover. Money comes with strings attached.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. Many modern entrepreneurs have limited exposure to the notion of failure or layoffs because it has been so long since these things were common in the industry. Entrepreneurs/Founders/CEOs.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Berkonomics

MAY 26, 2010

They include an expense account, company car, profit sharing, 401k contributions, medical coverage for dependents, free life insurance, educational payments, extra vacation, relocation expenses, paid trips to industry association meetings, or a small override on revenue from new products developed under the candidate’s watch. .

Employee 54

Employee Liquidity Event Stock Options Salary 54

Berkonomics

JULY 5, 2018

Even small community service-providers can be sold to buyers hungry to get into a business already in revenue with a steady customer base. Accepting venture or angel money is to create a contract between the investors and the entrepreneur that the business will someday be sold or even go public to create an exit for the investors.

Intellectual Property 90

Intellectual Property Management Stock Options Stock 90

Berkonomics

AUGUST 27, 2015

He has written numerous books and articles for entrepreneurs and investors, and was the publisher and editor-in-chief of Venture Magazine. Mr. Lipped addresses the issue of exits, and whether entrepreneurs should take the long view or cash out quickly when the opportunity arises. By Arthur Lipper.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

Berkonomics

SEPTEMBER 10, 2015

Most entrepreneurs wait too long to start thinking about their exit. I recently met with two bright entrepreneurs who are building a company in an exciting niche market riding on a long term trend. These entrepreneurs were too young to attract the amount of capital they’d need to compete in this new environment. By Basil Peters.

Vertical 48

Vertical Finance Valuation Global 48

Berkonomics

JUNE 17, 2011

Even small community service-providers can be sold to buyers hungry to get into a business already in revenue with a steady customer base. Accepting venture or angel money is to create a contract between the investors and the entrepreneur that the business will someday be sold or even go public to create an exit for the investors.

Equity 83

Equity Intellectual Property Revenue Community 83

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. Both the entrepreneur and the investor have much higher expectations than just "even money" on their bet. The entrepreneur expects the company to be worth many times this valuation and so does the investor. Should I take Angel or VC money?

Equity 40

Equity Employee Dilution Valuation 40

www.quora.com

JANUARY 16, 2011

5 Comments 30 Answers Tristan Kromer , I help entrepreneurs find co-founders. Would that take away my right to talk about successful entrepreneurs and top managers? What did you take from idea on the back of a napkin to liquidity event? " Web Development Startups Solo Founders I am a creative guy with a startup idea.

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42