ReadWriteStart

MAY 30, 2022

Sometime in your future, an investor will offer you money in return for equity. One in particular from a famous VC in Silicon Valley. Then you need to retain the lion’s share of equity. The more people you grant equity to, the more complex your payday. But your biggest test of that financial insight is yet to come.

Bootstrapping 147

Bootstrapping Startup Equity Silicon Valley 147

Startup Professionals Musings

SEPTEMBER 27, 2020

The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. That’s why angel and equity investors are so sought after by entrepreneurs. Demonstrate an ability to repay from revenues, not collateral. The more conservative ask for two years of positive cash flow.

Silicon Valley 431

Silicon Valley CPA Small Business Administration SBA 431

Steve Blank

MARCH 12, 2014

We realized that past K-12 Entrepreneurial classes taught students “the lemonade stand” version of how to start a company: 1) come up with an idea, 2) execute the idea, 3) do the accounting (revenue, costs, etc.). We wanted to teach our students how to think like entrepreneurs not accountants.

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Lean Customer Development Startup Silicon Valley 334

Up and Running

SEPTEMBER 19, 2017

When you accept outside money, particularly a private equity (PE) investment, however, that changes. In this article, I’ll provide some personal stories of how investors have navigated the balance between raising private equity capital and not losing control of their startup. You make all the decisions, when you want, how you want.

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Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

AUGUST 21, 2020

Apple has since capitalized on the top technical talent in Silicon Valley to stay ahead of the competition. Financial capital – revenue, equity, debt, funding. Most people I know credit Steve Job’s success to his ability to attract top technical talent, starting with Steve Wozniak who designed the first Apple computer.

Community 329

Community San Francisco Silicon Valley Startup 329

View from Seed

APRIL 30, 2015

Below, we talk to Glen Mello , Managing Director of Silicon Valley Bank’s accelerator team in Boston. Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. Traction and revenue? What are some pros and cons?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Steve Blank

SEPTEMBER 14, 2009

3) invest in and take equity stakes in exchange for capital. Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

ReadWriteStart

OCTOBER 7, 2010

Bottom line, early stage equity is very, very expensive. As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I Well, I don't.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

JULY 16, 2010

So even within the “alternative class&# our LPs are looking at other asset investment choices such as distressed buyout funds, private equity or hedge funds. The best and most consistent funds in Silicon Valley (e.g. Revenue must come from a primary source (as opposed to advertising or other third party sources).

LP 311

LP Technical Review Early Stage Silicon Valley 311

The Equity Kicker

MAY 9, 2016

The bit I liked the most described the role of Stanford in getting Silicon Valley going in the late 1950s. Silicon Valley started in the small district of Palo Alto and the emergence of Tech City here in East London has been similarly important. We focus on ecommerce and marketplaces.

Silicon Valley 60

Silicon Valley Venture Capital eCommerce Startup 60

Austin Startup

JUNE 26, 2019

I recruited a top-flight engineer and serial entrepreneur to build our MVP, on equity?—?and Our venture was selected for competitive accelerator spots & recognition from media and mentors from Austin, Chicago and Silicon Valley to work on this problem and capture the value its solution provided. It was a compliment.)

Silicon Valley 54

Silicon Valley Startup B2C Sweat Equity 54

Scalable Startup

OCTOBER 26, 2014

Imagine if you’re in Silicon Valley right now with no equity in a tech startup, but associated with several people getting six figure “bonuses” because they somehow wound up with some stock in one. The free parties (or not free) and swag and great stories and boat rides in the bay are nice.

Silicon Valley 25

Silicon Valley Hawaii Angel Investor IPO 25

Startup Professionals Musings

DECEMBER 1, 2018

The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. That’s why angel and equity investors are so sought after by entrepreneurs. Demonstrate an ability to repay from revenues, not collateral. The more conservative ask for two years of positive cash flow.

Silicon Valley 210

Silicon Valley CPA Small Business Administration SBA 210

David Teten

MARCH 18, 2021

Thirty-four VC firms in OpenVC call themselves “early-stage” Yet, 30% of those don’t actually invest in pre-revenue startups. J-Angels “is a community and a VC fund of top American investors (Jewish-American & Israeli-born) in Silicon Valley and San Francisco.”. The phrase is quite ambiguous.

Technical Review 78

Technical Review Cofounder Venture Capital Deal Flow 78

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Revenue per customer? Revenue, Gross Margin?

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

crowdSPRING Blog

NOVEMBER 30, 2012

In Silicon Valley, Technology Talent Gap Threatens G.O.P. Special Report: Silicon Valley’s dirty secret – age bias | Reuters – [link]. Convertible Debt: really Bridge Loans and Equity Replacement Debt – [link]. Red All Over: Newspaper Revenues Fall In Q3 – [link].

Social Media 100

Social Media Small Business Central African Republic Design 100

Scalable Startup

OCTOBER 26, 2014

Imagine if you’re in Silicon Valley right now with no equity in a tech startup, but associated with several people getting six figure “bonuses” because they somehow wound up with some stock in one. The free parties (or not free) and swag and great stories and boat rides in the bay are nice.

Silicon Valley 20

Silicon Valley Hawaii Angel Investor IPO 20

Both Sides of the Table

MAY 19, 2010

Founded in November 2007 in New York City by Alexis Maybank and Kevin Ryan (co-founder of DoubleClick); CEO is Susan Lyne (ex-CEO Marta Stewart Living Omnimedia) Revenue estimates: $50mm in 2008; $170mm in 2009 (versus budget of $150mm); $450mm forecasted for 2010. Note that these are “gross” revenue numbers.

Partner 240

Partner New York City Cofounder Syndicate 240

Eric Friedman

AUGUST 18, 2021

They talk about] businesses which are not contractually recurring revenue in the parlance of recurring revenue run rates. They conflate flow businesses or they conflate usage-based businesses with contractual, recurring revenue businesses, and so on. On Leaving Silicon Valley Bank. That scares me.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

Startup Professionals Musings

SEPTEMBER 27, 2013

Many entrepreneurs are convinced that banks are not worth the effort for startups, especially early-stage ones that still don’t have a revenue stream, or collateral to back up their financing needs. All banks are looking hard right now to get back in the game, and certain ones, like Silicon Valley Bank, are more focused on small businesses.

Silicon Valley 187

Silicon Valley Equity Entrepreneur Finance 187

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

VC Cafe

JUNE 29, 2012

You’re in Silicon valley, competing against the best of the best. When I met Instagram, Kevin (the founder) had great numbers, but he wasn’t even thinking about revenue. Would it be a good idea to come to Silicon Valley even if our market is in Mexico? Should I move to Silicon Valley? .

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Developer Silicon Valley Software Review Mexico 103

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. Whether it is credit or equity, funding is very, very tight. Because customer financing equals revenue, not equity. Gio expects to get to about $500,000 by the end of this year and asked me for advice on venture funding.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

crowdSPRING Blog

SEPTEMBER 12, 2016

From a revenue perspective, the apparel was a drop in the bucket to Twitch (who was acquired by Amazon for $970 million that same year). From a brand equity perspective, the purple hoodie was a unique way to acquire 2,000 die-hard brand advocates. Startups have been using branded apparel as a way to build brand equity for years.

Equity 48

Equity Silicon Valley Cofounder Design 48

crowdSPRING Blog

SEPTEMBER 12, 2016

From a revenue perspective, the apparel was a drop in the bucket to Twitch (who was acquired by Amazon for $970 million that same year). From a brand equity perspective, the purple hoodie was a unique way to acquire 2,000 die-hard brand advocates. Startups have been using branded apparel as a way to build brand equity for years.

Equity 48

Equity Silicon Valley Cofounder Design 48

Austin Startup

NOVEMBER 6, 2017

C-Corp largely because (i) VCs have historically favored C-Corps for nuanced tax and other reasons, and (ii) virtually all of the standardized legal infrastructure around startup finance and equity compensation assumes a C-Corp. However, times are changing. But not all VCs think that way. If you are an LLC tech startup, you need tax counsel.

Delaware 48

Delaware LLC Startup Silicon Valley 48

fi.co

DECEMBER 4, 2012

Globalizing Silicon Valley - See the Worldwide Schedule - Lead a Local Chapter. -->. Our vision is to Globalize Silicon Valley by creating and fostering local startup ecosystems in promising markets across the globe. Let me start by saying I think the only wrong answer in how to split co-founder equity is 50/50.

Cofounder 43

Cofounder Founder Silicon Valley San Diego 43

Startup Professionals Musings

DECEMBER 8, 2017

Don’t believe that Silicon Valley myth that all you have to do is sketch your idea on the back of a napkin, and investors will line up to give you money. Providing your product or service free to customers may sound attractive in marketing materials, but you need revenue sources to survive.

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Elevator Pitch Angel Investor Silicon Valley Revenue 163

Scalable Startup

AUGUST 9, 2018

If you’ve already soft launched, have a product available, are telling the world about your awesome company but don’t have revenue/user growth, you’re probably in the red zone. Pre-launch funding is pretty common in Silicon Valley, but that’s a unique case. In between those times it’s pretty tough. They’re betting on you.

Technical Cofounder 20

Technical Cofounder Silicon Valley Early Stage Cofounder 20

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. 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. And there absolutely are more investors than there are good deals.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Startup Professionals Musings

SEPTEMBER 30, 2010

Many entrepreneurs are convinced that banks are not worth the effort for startups, especially early-stage ones that still don’t have a revenue stream, or collateral to back up their financing needs. All banks are looking hard right now to get back in the game, and certain ones, like Silicon Valley Bank, are more focused on small businesses.

Silicon Valley 201

Silicon Valley Early Stage Startup Equity 201

The Startup Magazine

AUGUST 6, 2021

Although the media has been full of inspiring stories about start-ups in Silicon Valley, the reality is that the rate at which Americans have been starting companies has been in decline for a long time. Without them, you cannot earn any revenue. That changed with the pandemic. This idea extends to the people you work with.

Limited Liability Company 163

Limited Liability Company Silicon Valley Business Model Stock Options 163

Startup Professionals Musings

MAY 11, 2013

The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. Demonstrate an ability to repay from revenues, not collateral. They actually prefer to see that you have a revenue stream to repay the loan, since they don’t want to own another home.

Entrepreneur 252

Entrepreneur Angel Investor Silicon Valley CPA 252

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. 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. And there absolutely are more investors than there are good deals.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Startup Professionals Musings

JANUARY 12, 2013

See how many you have personally experienced already, or are currently mentioned in your business plan: Crowd-sourcing equity. Sites like KickStarter have for years offered rewards and pre-sales for crowd investments, but real equity won’t be legalized until sometime this year for people other than accredited investors. Gamification.

Entrepreneur 274

Entrepreneur Accredited Investor Silicon Valley Angel Investor 274

Startup Lessons Learned

JUNE 9, 2020

5:01) Brian's thoughts on the human dimension to his approach and how that sets him apart in Silicon Valley. (6:06) 59:03) The need for creativity, intuition and compassion in Silicon Valley and business. (1:00:23) 59:03) The need for creativity, intuition and compassion in Silicon Valley and business. (1:00:23)

Silicon Valley 60

Silicon Valley Hosting Cofounder Employee 60

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. million in revenue. The business is already profitable with $2.9

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Dilution Revenue Finance Entrepreneur 114