Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Steve Blank

MARCH 17, 2020

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. All your assumptions about customers, sales cycle and most importantly, revenue, burn rate and runway are no longer true.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

YoungUpstarts

OCTOBER 23, 2017

An early example occurred in 2010 when UBS Analyst Neil Currie accessed satellite imagery to monitor activity in Walmart parking lots, running the data thru a mathematical regression to translate it into customer activity for better earnings forecasts. Morgan Stanley predicts that Robo Advisors will manage $6.5

Technical Review 154

Technical Review Artificial Inteligence Software Review IPO 154

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

Startup Professionals Musings

SEPTEMBER 6, 2010

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 234

Valuation Pre-Money Valuation NPV Startup 234

Gust

NOVEMBER 18, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

The Startup Magazine

MARCH 24, 2024

The higher the velocity, the more predictable and scalable the revenue becomes. Here are some key tips to refine lead qualification — Leverage predictive analytics for pipeline forecasting Predictive analytics offers real-time data and forecasts that help in accurate pipeline forecasting.

B2B 128

B2B Forecast Entrepreneur Analytics 128

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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. OTHER DEALS: 1.

Partner 240

Partner New York City Cofounder Syndicate 240

The Equity Kicker

DECEMBER 2, 2015

Mahesh Vellanki from Redpoint put up an interesting post yesterday about ecommerce valuations. His major point is that revenue multiples aren’t that high, largely because the market is highly competitive and margins are low – often because of Amazon. revenue multiple because it’s strong on both these metrics.

Forecast 60

Forecast eCommerce Net Present Value Revenue 60

Cracking the Code

FEBRUARY 23, 2011

It would have been easy to explain the difference by changes in the 2010/2011 revenue growth projections but unfortunately that is not the case. In comparison, the overall technology sector growth was projected at 9-10% in early 2010 and this forecast did not change significantly today. revenues while large caps are trading at 6.4x.

Software Review 101

Software Review Technical Review Valuation Europe 101

YoungUpstarts

SEPTEMBER 15, 2018

Startup valuation, under no circumstances, can be described as a simple affair. The pre-money valuation of other startups is based on the following factors. It is important for businesses to be duly evaluated because it’s the valuation of businesses that actually go on to draw investors. Importance of Evaluating your Startup.

Pre-Money Valuation 124

Pre-Money Valuation Valuation Sweat Equity Startup 124

Both Sides of the Table

OCTOBER 1, 2009

Consumer spending is 70% of the economy and will continue to be stretched – We can look all we want at tech innovation, VC funding cycles and hot M&A deals, but ultimately growth and therefore investment must be underpinned by revenue. The IMF just raised its global growth forecast from 2.5%

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

The Next Web

FEBRUARY 27, 2014

One of the questions I get, more often than not, is what is the appropriate valuation of my business. multiple interested investors competing for the deal, and driving up your valuation in the process). Never have an investor think they are the only investor pursuing your business, as that will hurt your valuation.

Valuation 167

Valuation Forecast Seed Stage .Net 167

YoungUpstarts

MAY 17, 2019

But every year thousands of entrepreneurs become millionaires by buying and growing businesses without the startup headaches of venture capitalists, zero revenue, and no business processes. Use the cash forecast in the report to secure better terms on your business loan or lock the owner into seller financing.

Due Diligence 185

Due Diligence Forecast Deal Structure Valuation 185

David Teten

AUGUST 6, 2015

So often I speak with companies that have charged ahead building an ultra-complex daily or weekly model with thousands of assumptions and complex dashboard outputs, when their potential investors simply want a high-level 24 month forecast with 12 months of reconciling historical data.”. HOW TO MAKE YOUR CELLS READABLE.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Rob Go

MAY 26, 2016

I’ve been thinking a little about non-recurring revenue businesses. I’m coming to the belief that these are under-appreciated categories of investment, especially since the gospel of recurring revenue, subscription commerce, and SaaS has been preached in recent years. That is not good. Some categories just are this way.

Revenue 53

Revenue NPV Valuation Forecast 53

Agile VC

MAY 26, 2011

In another we decended into a debate about our 5 year forecasts (I built the models so fielded most of these questions), and it became clear they probably weren’t the best fit for our Series A round (this group is no longer in the early-stage VC business). It was a pretty good valuation for the time. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Startup Professionals Musings

SEPTEMBER 30, 2011

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Pre-Money Valuation 246

Pre-Money Valuation Valuation NPV Intellectual Property 246

SoCal CTO

MAY 19, 2010

By way of background for the question, there’s a great post by Bob Aholt, a Pasadena Angel: An Angel Investor’s Thoughts on Valuation. For example, TCA’s evaluation criteria first bullet is: A market opportunity sufficiently large to create a business that can grow to at least $50 million in annual revenues. So get real.

Hockey Stick 205

Hockey Stick NPV IRR Valuation 205

Seeing Both Sides

JULY 21, 2014

As a result, the full revenue for each deal was recognized in that quarter as soon as the software was shipped. This allowed our revenue to skyrocket from $1.8 But the downside to our business model was that we did not have hardly any recurring revenue. . I later came to realize that r ecurring revenue is magic.

Revenue 54

Revenue Valuation Churn Rate Portfolio 54

Ben's Blog

AUGUST 17, 2020

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?” How valuation multiples work Why did multiples become a shortcut-heuristic for estimating valuations in the first place?

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

Cracking the Code

MARCH 12, 2010

So, here is the first edition, including the recent Q4 2009 earnings and the updated 2010 forecast. Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation.

Software Review 63

Software Review Technical Review Cloud Forecast 63

Start Up Blog

MAY 26, 2022

Imagine if an industry spent $4 to generate $1 in revenue. It really is astonishing: Forecast VOD streaming content spend = $US230 billion Forecast VOD streaming revenue = $US83.4 Tech companies have been getting a free pass for a long time on their valuations. Don’t forget – this is before profit.

Forecast 62

Forecast Viral Stock Curation 62

Berkonomics

MARCH 21, 2019

If you are a going business with a track record of revenues, then the importance of accurate current financial statements cannot be overstated. If there is no record of revenues, see the “The Berkus Method” available with any search query for valuing the business before revenues. Careful about “hockey stick” forecasts.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

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

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? Forecasts are evaluated as a level of commitment and a measure of your business savvy. Quantify founder investments, both cash and sweat-equity.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

The Equity Kicker

APRIL 11, 2012

The question on everyone’s lips is, of course, ‘how come a two year old startup with no revenues is worth $1bn?’. Revenues from mobile are an important part of Facebook’s growth going forward and photo sharing on their mobile app is mediocre at best. I think the answer is pretty clear – it’s all about Facebook’s IPO price.

IPO 110

IPO Valuation Forecast Acquisition 110

Tim Keane

MARCH 9, 2011

How to prepare a sales forecast for a business plan » March 09, 2011. Example two:  Explosive market share growth and revenue in an expanding market with acquisitive players available.   The company is pre-revenue and Sarah’s intention is to sell the company within three years. .  five years.). . 

Finance 83

Finance Bootstrapping Startup Equity 83

The Equity Kicker

OCTOBER 10, 2012

HR software business Workday has just upped the proposed share price in its coming IPO to $24-26, taking its valuation over $4bn. That’s 30x this years forecast revenues of $134m. the revenue run-rate from the last quarter. the revenue run rate. the revenue run rate. Like Workday, Salesforce is loss making.

Valuation 108

Valuation Acquisition Forecast IPO 108

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. Kushim , Totem , and VisibleVC focus on serving this need among VCs.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Startup Professionals Musings

AUGUST 8, 2016

Remember you can’t sustain a business or social cause with no revenue or profit. Generate a 5-year financial forecast from opportunity data. 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

The Equity Kicker

MARCH 7, 2016

But as deals get bigger analysis of forecasts and the financial impact on the acquirer become much more important. 10-20m revenues is the threshold for most high growth businesses that gets you into what I would call ‘large scale’ territory of $100m+ exits.

Acquisition 60

Acquisition Intellectual Property Investment Bankers Valuation 60

ReadWriteStart

JANUARY 28, 2022

This article will assist you in gaining a fundamental understanding of equity valuation, kinds of equity, and other related topics. The market regards equity as an ownership “share” in a corporation’s income revenue stream. Importance of equity valuation. Make forecasts about the company’s performance.

Valuation 108

Valuation Equity Warrant Common Stock 108

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. Projected revenues and expenses over the strategic period. This allows them to calculate burn rates, break-even points and forecast the company valuation over time.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

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

Steve Blank

APRIL 1, 2020

Your revenue plans are no longer valid. What’s your monthly cash burn at your new low revenue level? Forecasted recovery date. Sales pipeline/forecast. The CEO should dial through as many of the largest existing customers to get a firsthand understanding of the magnitude of any revenue shortfall. Unemployment %.

South Korea 333

South Korea Salary Business Model China 333