Startup Professionals Musings

JANUARY 7, 2013

Based on the final report for 2012 from Thomson Reuters and the National Venture Capital Association (NVCA), it may appear that IPOs are back as a viable startup exit strategy. Your friends and family are really the only answer until you have a significant revenue stream. Identify the right people in the right venture firms.

Venture Capital 252

Venture Capital IPO Elevator Pitch Initial Public Offering 252

Startup Professionals Musings

OCTOBER 7, 2022

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. The average valuation for angel investments is $2 million, which will get you $500,000 for 20 percent of your startup.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

JANUARY 4, 2020

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. The average valuation for angel investments is $2 million, which will get you $500,000 for 20 percent of your startup.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Startup Professionals Musings

NOVEMBER 4, 2011

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

Startup Professionals Musings

SEPTEMBER 23, 2010

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224

Up and Running

MAY 17, 2017

Plus, you’ll always be prepared in case an opportunity or desire to sell arises in the future—it’s a smart idea to have an exit strategy. A business that is growing in revenue and earnings and trending upward will be more desirable to a potential buyer than a business that is declining. million in sales revenue.

Acquisition 92

Acquisition Technical Review Revenue Exit Strategy 92

Startup Professionals Musings

JULY 27, 2018

Potential investors love to see gross margins in the fifty percent range or greater, with recurring revenue through subscriptions, follow-on sales, or services. Five-year financial projections of revenue and expenses. Discussion of likely liquidity events and exit strategy.

Product 145

Product Intellectual Property Liquidity Event Exit Strategy 145

Startup Professionals Musings

SEPTEMBER 30, 2015

In addition, current investors want to see every startup go public or be acquired, as an exit event, so they can get their due return for that investment which has been tied up for the last few years. For these reasons, I always look for an overt exit strategy in every startup I might consider for an angel investment.

Exit Strategy 120

Exit Strategy Startup Valuation Acquisition 120

Startup Professionals Musings

AUGUST 27, 2012

In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Implicit in this is the go-to-market strategy. Project both revenues and expense totals for next five years, and past three years. What is the current valuation of the company? Exit strategy. Business model.

Elevator Pitch 247

Elevator Pitch Exit Strategy Burn Rate Merger 247

Steve Blank

SEPTEMBER 14, 2009

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. There was now a public market for companies with no revenue, no profit and big claims.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

Startup Professionals Musings

AUGUST 13, 2012

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. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Startup Professionals Musings

JUNE 10, 2011

In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Implicit in this is the go-to-market strategy. Project both revenues and expense totals for next five years, and past three years. What is the current valuation of the company? Exit strategy. Business model.

Elevator Pitch 234

Elevator Pitch Exit Strategy Burn Rate Merger 234

Startup Professionals Musings

MAY 13, 2011

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. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Startup Professionals Musings

MAY 19, 2010

In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Implicit in this is the go-to-market strategy. Project both revenues and expense totals for next five years, and past three years. What is the current valuation of the company? Exit strategy. Business model.

Elevator Pitch 235

Elevator Pitch Exit Strategy Burn Rate Merger 235

Startup Professionals Musings

AUGUST 8, 2016

Remember you can’t sustain a business or social cause with no revenue or profit. Investors look for an exit strategy to allow them to capture a return on their investment. Solutions that are “nice to have” or “improve usability” are easy to give away but hard to sell. Be able to differentiate your offering from competitors.

Intellectual Property 120

Intellectual Property Entrepreneur Elevator Pitch Exit Strategy 120

David Teten

SEPTEMBER 23, 2017

Close to 80% responded that manual processes, such as tracking down support, preparing reports and pulling data from different sources, are the biggest pain points they face in the valuation process. For example, some private equity funds are quantifying their exit strategy in a concerted way.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Gust

AUGUST 19, 2012

In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Implicit in this is the go-to-market strategy. Project both revenues and expense totals for next five years, and past three years. What is the current valuation of the company? Exit strategy. Business model.

Elevator Pitch 146

Elevator Pitch Exit Strategy Burn Rate Merger 146

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. If we build it they will come” is not a marketing and sales strategy. Projected revenues and expenses over the strategic period. Potential investor return calculation and exit strategy.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

YoungUpstarts

MAY 7, 2015

Many ESOPs are as small as 12-15 employees with less than $1 MM in annual revenue. Myth: An owner adopting an ESOP will get a lower exit value by selling to an ESOP than by selling through the open market. Fact: This issue is often the elephant in the room from a valuation perspective. Myth: ESOPs are only for large companies.

Stock 100

Stock Employee Private Equity Valuation 100

Gust

AUGUST 5, 2012

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. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Startup Professionals Musings

DECEMBER 24, 2012

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Angel Investor 260

Angel Investor Intellectual Property Elevator Pitch Angel Groups 260

Startup Professionals Musings

APRIL 22, 2010

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. Many people seem to use the social network advertising model for revenue, but forget it requires at least 100M users and $50M investment. Exit strategy.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Transformify

AUGUST 7, 2022

When you are developing your projections, you need to be conservative in the estimation of revenues and liberal in estimating expenses. Before you venture into a new country to fuel your growth plans, you need to have an exit strategy in place. Find out the restrictions on the valuation and selling of your business.

Due Diligence 52

Due Diligence Exit Strategy Singapore Government 52

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. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

www.inc.com

SEPTEMBER 24, 2011

Pricing Strategy. Exit Strategies. Strategy and Planning. But with the help of Grahams company, which specializes in creating tech systems for start-ups, Jumpstart grew to more than $50 million in revenue--enough to make it an attractive acquisition for media conglomerate Hachette Filipacchi. Office and Operations.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Professionals Musings

FEBRUARY 13, 2016

Justify funding requirements, use of funds and specify a current valuation estimate. What are your forecasts for revenue, expenses and cash flow? Technically, this is your exit strategy, usually a merger and acquisition (M&A) or initial public stock offering (IPO).

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Startup Professionals Musings

MARCH 7, 2015

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. The average valuation for angel investments is $2 million, which will get you $500,000 for 20 percent of your startup.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Gust

DECEMBER 16, 2012

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Angel Investor 179

Angel Investor Intellectual Property Elevator Pitch Angel Groups 179

The Next Web

FEBRUARY 19, 2014

It was the biggest IPO the Australian market had seen all year , and sparked a flurry of subsequent listings – but ‘going public’ was not the only option we considered, and until we had progressed our exit strategy to near completion, it also seemed the most unlikely. What will give you the best valuation for your business?

Prospectus 121

Prospectus IPO Exit Strategy Private Equity 121

Business Plan Blog

OCTOBER 8, 2013

If you are pre-revenue then it will be difficult to portray market traction unless you have the budget to conduct customer surveys. Investors want to see a growth/revenue model that uses sales data and assumptions that predict sales by product and region. Unrealistic Exit Strategy and Multiple. Unrealistic Valuation.

Business Plan 67

Business Plan NDA Exit Strategy Valuation 67

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Up and Running

MAY 21, 2015

All the other sharks typically make a traditional equity investment; for example they’ll invest $100,000 at a $1,000,000 business valuation, and take 10 percent of the business. What this means, is that he gets paid not as a portion of the profit, but as a portion of the overall revenue, regardless of the profit.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

Business Plan Blog

DECEMBER 19, 2013

Have an exit strategy. If you say by sales revenues, you’re done. Keep in mind most angel investments take seven to eight years to reach an exit. Keep in mind most angel investments take seven to eight years to reach an exit. They want to know how you will function under pressure. You need to provide a way out.

Angel Investor 55

Angel Investor Exit Strategy Valuation Differentiation 55

Startup Professionals Musings

MARCH 13, 2020

In that context, I offer the following financial projection strategies, from my own experience: Forecast a business that has plenty of room to grow quickly. Find some credible opportunity statistics that can support your own revenue expectations of between $20 million and $100 million in the fifth year.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Up and Running

AUGUST 19, 2014

what’s behind your financials, your go-to-market strategy, your current traction in the marketplace, your competition and why you’re better, your intellectual property or “secret sauce,” your exit strategy, etc.). I’m impressed when entrepreneurs know their numbers inside and out and are realistic about their valuations.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Up and Running

OCTOBER 3, 2018

Financial Summary: Explain your business model, startup costs, revenues, and liabilities to the company. Your funding ask and exit strategy, if applicable. Others predict Automated Valuation Models will provide more sophisticated revenue and expense information, possibly replacing financial analysts. Be specific.

El Paso 61

El Paso Business Plan Technical Review Forecast 61

BeyondVC

DECEMBER 23, 2003

As with any smart executive who cares about the value of equity, the question I am often asked is, “What is your exit strategy.” In other words, these good exits usually happen when your company is approached by a potential buyer-i.e., What does this all mean? Remember, companies are bought and not sold.

Exit Strategy 68

Exit Strategy Balance Sheet IPO Valuation 68