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. This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. Rational burn profile, up to 50% of revenue at close, scaling down.

Revenue 60

Revenue Technical Review Software Review Equity 60

YoungUpstarts

SEPTEMBER 12, 2018

by Kristy Campbell, Chief Operating Officer at Rev1 Ventures. Research shows that companies with greater gender and racial diversity drive nearly 15x more sales revenue than companies with homogenous teams, proving that it literally pays to build an inclusive team. Look to organizations like i.c. Foster what you find.

Hiring 100

Hiring Technical Review Silicon Valley Due Diligence 100

Startup Professionals Musings

SEPTEMBER 29, 2018

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Waiting until you have something to sell before bringing on a sales and operations staff.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

David Teten

MARCH 14, 2018

I’ve listed them below in *very* roughly descending order of efficiency, measured by increased dollars one can put to work, divided by the operational dollars required to implement each strategy. . Sophisticated VC and private equity funds have a wide array of options for leveraging outside operating executives.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

View from Seed

SEPTEMBER 18, 2019

Projecting from the seed stage, there are two types of team-building topics you want to address – key senior hires and org-level team building. As the company progresses through product market fit (PMF), you will want to highlight other key senior hires required to scale and round out the functional expertise of the exec team.

Part-Time VPE 195

Part-Time VPE Seed Stage CTO Hire Forecast 195

Startup Professionals Musings

OCTOBER 5, 2014

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Waiting until you have something to sell before bringing on a sales and operations staff.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

FEBRUARY 21, 2012

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. Great strategy. Do it yourself and barter for services.

Burn Rate 232

Burn Rate Startup Salary Equity 232

Startup Professionals Musings

JANUARY 28, 2011

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. Great strategy. Do it yourself and barter for services.

Burn Rate 231

Burn Rate Startup Salary Equity 231

Startup Professionals Musings

SEPTEMBER 14, 2016

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Waiting until you have something to sell before bringing on a sales and operations staff.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

David Teten

SEPTEMBER 23, 2017

Private equity and venture capital investors are copying our sisters in the hedge fund and mutual fund world: we’re trying to automate more of our job. High-frequency trading, algorithmic by its nature, is estimated to account for at least 50% of US equity markets trading volume. . But we’re doing it slowly.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Startup Professionals Musings

MAY 18, 2020

With one of the many new tools , and a dose of sweat equity, you can create a website for almost nothing -- and you are on your way to success with ecommerce, your latest invention or personal services. With the unlimited access to “how-to” videos and detailed instructions on the Internet, you shouldn’t need to hire experts for most things.

Hockey Stick 423

Hockey Stick Bootstrapping Sweat Equity Intellectual Property 423

This is going to be BIG.

JANUARY 18, 2024

On the other hand, they could be the opposite—much more focused on near-term cash distributions than long-term equity appreciation. They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. What’s Simply Hired, you ask?

.Net 88

.Net Cap Table Startup Technical Review 88

Hearpreneur

JANUARY 1, 2023

As I've taken the time to invest in companies and programs that can manage various facets of my business on my behalf, I've been able to increase my revenue and provide better financial insulation for my firm to help it withstand the negative effects of a recession. This will keep them sustainable should revenues take a dive.

Entrepreneur 96

Entrepreneur Software Review Technical Review Revenue 96

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. When you accept outside money, particularly a private equity (PE) investment, however, that changes. When you accept outside money, particularly a private equity (PE) investment, however, that changes.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

YoungUpstarts

SEPTEMBER 17, 2020

If you’re able to hire a bookkeeper or accountant, they can help make it easier by handling your important documents for you. The income statement is also known as a profits and losses sheet, and it shows the revenue being generated, expenses and costs. The expenses are broken down into operating expenses and overhead.

Balance Sheet 200

Balance Sheet .Net Equity Revenue 200

Startup Professionals Musings

FEBRUARY 5, 2010

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. Great strategy. Do it yourself and barter for services.

Burn Rate 120

Burn Rate Startup Salary Equity 120

Up and Running

NOVEMBER 15, 2017

Operating without a website is increasingly rare, and ignoring this weakness for too long could have disastrous consequences. This family-owned farm has been in existence for two years, initially operating as a hobby for the owners—who have training in plant biology—rather than as a profit-producing business. Hire an intern.

Botswana 148

Botswana Business Plan Oregon Distribution 148

Startup Professionals Musings

MAY 30, 2022

By definition, second-stage ventures generally have 10 to 99 employees and/or $750,000 to $50 million in revenue, and see that as just the beginning. They need a large infusion from venture capitalists, private equity, bank loans, or mezzanine financing. Hire more help than helpers. There is no free lunch.

Mezzanine 368

Mezzanine Private Equity Bandwidth Metrics 368

Startup Professionals Musings

APRIL 23, 2013

Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself. Every outside hire increases your cost and risk. Hire experts, not help. Understanding your business totally will give you much better operational control.

Equity 241

Equity Bootstrapping Startup Merger 241

Up and Running

JULY 1, 2020

It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling. Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success.

Business Plan 152

Business Plan Forecast Operations Dilution 152

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

NZ Entrepreneur

SEPTEMBER 29, 2021

Addressing real world problems, they thrive in uncertainty, generating new jobs and new revenue streams in new markets. experiments to build a product, find customers, test business models and hire amazing people. This equity will vest over 2-3 years. Underpinning this growth is good governance. Risk and reward.

Technical Review 88

Technical Review Software Review New Zealand Due Diligence 88

Up and Running

MARCH 14, 2018

Your revenue or business model. Impress the investors with what you and your team have accomplished to date (sales, contracts, key hires, product launches, and so on). Most startup teams are missing some key talent—be it marketing, management expertise, programmers, sales, operations, financial management, and so on.

Hockey Stick 164

Hockey Stick Exit Strategy Technical Review Angel Investor 164

YoungUpstarts

NOVEMBER 27, 2018

One of the most effective ways to spot solid potential in an early-stage startup is by checking out the working technology, as well as the current operating model, making sure it’s seamless and user-friendly. From there, it’s time to inquire what the value of the company currently is and if their investment is going towards equity or loans.

Early Stage 160

Early Stage Cofounder Startup Security 160

YoungUpstarts

JULY 20, 2016

In order to make a splash in their industries, startups need a healthy flow of working capital and, when you’re just trying to get established, it’s often impossible to access a sustainable flow of working capital through revenue alone. Startups need funds to pay for their early operations and gain a foothold in their industry.

Startup 100

Startup Technical Review Small Business Administration Revenue 100

Startup Professionals Musings

DECEMBER 1, 2021

The evidence is clear that companies that help people in need, and the environment, are paid back in revenue by the rest of us. Retool how your company works and operates today. Make sure your hiring practices include diversity, inclusion, and equity. Customers are looking for a differentiator today.

Agile 321

Agile Differentiation Lead Generation Social Media 321

Steve Blank

MARCH 17, 2020

Here are a few thoughts about operating in uncertainty in a pandemic. Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. And what’s in my lifeboat?”. Laying off people?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

The Startup Magazine

SEPTEMBER 21, 2021

The primary goal of any corporate firm is to benefit from the business’s finances while operating at its maximum capacity. But it is a grave mistake because even if you feel like your business is excelling in all the areas, you need to know how it is operating financially. Statement of Financial Position.

Finance 157

Finance Balance Sheet Operations Framework 157

Steve Blank

MARCH 31, 2014

In fact, it was only 7 years ago that Apple shipped its first iPhone and Google introduced its Android operating system. Companies horde cash and squeeze the most revenue and margin from the money they use. Today billions of dollars that companies could have invested in innovation are sitting in the hands of private equity funds.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Up and Running

DECEMBER 4, 2017

Sticking your neck out to secure the startup capital, hiring the right employees, and establishing cash flow are just a few of the risks that send would-be entrepreneurs running away from the idea of starting their own business. Here are some of the things you’ll want to consider before jumping into the role of business owner and operator.

Due Diligence 97

Due Diligence Acquisition Demand Small Business 97

David Teten

OCTOBER 1, 2015

Sometimes, equity in a new company can mean more to these shops than another $100-500K in revenue for simply building out a minimum viable product (MVP). On the other side — there are shops who build apps like you need for a living, and would love to take a stab at more than just service-based revenue.

Software Developers 60

Software Developers Software Development Software Developer 60

The Startup Magazine

JULY 1, 2022

Production or service is the business’s core activity, which generates revenue. The most common types of financing are debt financing, equity financing, and venture capital. Equity financing is when you sell a part of your company for cash. Marketing and sales are how you reach and sell to your target market.

Technology 138

Technology Venture Capital Finance Startup 138

A Smart Bear: Startups and Marketing for Geeks

JANUARY 7, 2014

It’s not a ruse devised by greedy vulture capitalists vying for extra points of equity. Costs arise ahead of associated revenue, especially for SaaS companies, so you need a cash investment to fund that growth. But what if, nine months from now, revenue isn’t growing quite as quickly as you planned?

Revenue 270

Revenue Finance Equity Engineer 270

Both Sides of the Table

AUGUST 3, 2010

I can save tons of development time and I think I can buy it for all equity. How much dilution should I take for it?&# My friend’s company was pre-revenue. But to be clear the overwhelming majority of deals involve one company driving the cultural integration, establishment of uniform processes, hiring / firing decisions, etc.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

NOVEMBER 19, 2009

But “he didn’t have the budget to hire a developer until he had raised money!&#. He would have found somebody technical and inspired that individual to work for equity or deferred payment. He still had no website and no prototypes. I said that was my point. “A real entrepreneur would have done it anyway.

Entrepreneur 414

Entrepreneur Fractional CTO Technical Review CTO Hire 414

K9 Ventures

JUNE 12, 2012

VCs also operate in a limited time window that is determined by the duration of their funds. You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. The rush to hire results in a relaxation of “hire only A players rule.”

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117