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. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Rational burn profile, up to 50% of revenue at close, scaling down. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

JANUARY 4, 2014

Nowhere is the politics more difficult than with co-founders, which is why for years I’ve spoken publicly about “ the co-founder mythology.” ” Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes. Equity for the future? We discussed it as a group.

Founder 340

Founder Sacramento Cofounder Technical Review 340

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. This could equate to two technical founders (with a minimal salary), funding two developers for a year.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Flexible VC 101: Equity Meets Revenue Share. Where else can fast-growing companies get funding?

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Berkonomics

OCTOBER 5, 2023

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. How about young or pre-revenue companies? Why did the company abandon a profitable market, even if it could not generate $100 million a year in revenues?” first appeared on BERKONOMICS.

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Startup Professionals Musings

MARCH 23, 2011

I’ll try to offer some guidelines to address these issues, but I generally recommend you keep the day job until your new company is producing real revenue. Otherwise, I suggest that founders be up-front with their employers, with an honest commitment that the “side” work on the potential startup will not jeopardize committed results.

Founder 233

Founder Startup Cofounder Angel Investor 233

Startup Professionals Musings

FEBRUARY 21, 2012

Pay people with equity or future revenue. When I was interviewed for my first startup CEO job, I was expecting a $150,000 salary, but instead was offered an opportunity to contribute $50,000 to the business, and work for equity only. Another one to avoid cash burn for software development is a contract for percent of future revenue.

Burn Rate 232

Burn Rate Startup Salary Equity 232

YoungUpstarts

AUGUST 10, 2017

by Mark Gilbert, founder and CEO of MBS Accounting Technology & Advisory. Investors want to see in-depth financial reports that reinforce the startup has an organized business model with potential for revenue growth. Founders overlook how their salary looks to investors. >Investors

Software Review 124

Software Review Technical Review Due Diligence Startup 124

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. This could equate to two technical founders (with a minimal salary), funding two developers for a year.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

JANUARY 28, 2011

Pay people with equity or future revenue. When I was interviewed for my first startup CEO job, I was expecting a $150,000 salary, but instead was offered an opportunity to contribute $50,000 to the business, and work for equity only. Another one to avoid cash burn for software development is a contract for percent of future revenue.

Burn Rate 231

Burn Rate Startup Salary Equity 231

SoCal CTO

FEBRUARY 22, 2011

I'm a little surprised that CTO Founders with growth capital funding only have 15% of their companies. It is interesting to see the salaries of CTOs of pre-Revenue even pre-Launch companies. CTO Founders in India, have a very low equity stake. Caution - there is not much data for many of the geographies.

CTO Hire 273

CTO Hire Equity Southern California France 273

SoCal CTO

SEPTEMBER 27, 2011

Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." The first few people into a startup are on a spectrum of founder vs. early employee. Founders are likely not paid for a long time and have a sizeable equity percentage for early risk and having the concept.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

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. This could equate to two technical founders (with a minimal salary), funding two developers for a year.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

Startup Professionals Musings

AUGUST 18, 2023

Some argue the only way to start is to drop everything and jump in with both feet, while others recommend an overlapped approach to the lifestyle, including not quitting your day job until you have revenue and a proven business model. Startups cost money but don’t pay a salary before revenue.

Private Equity 255

Private Equity Salary Cofounder Equity 255

Up and Running

JULY 28, 2022

Small Business Administration , an organization is considered to be a small business if their: Firm revenue ranges from $1 million to $40 million Number of employees is between 100 and 1,500. Develop a founders agreement. A founders’ agreement is a legal contract defining and governing the relationship between cofounders.

Small Business 167

Small Business Intellectual Property Cofounder Software Review 167

Both Sides of the Table

NOVEMBER 14, 2017

As the idea went from innovating on software & systems to launching a company to rolling it out in the field brought on Rahul Gandhi as his co-founder to physically launch the company. Whereas New York City has very high real estate costs and very high salaries, launching in Chicago and D.C. were more distributed.

Operations 286

Operations New York City Technical Review Startup 286

ConversionXL

JUNE 8, 2017

It is about focusing your marketing efforts on a few select companies that could represent huge revenue streams. As Des Traynor , co-founder of Intercom put it in the Intercom on Jobs-to-be-Done book : Des Traynor: Some products are better defined by the job they do than the customers they serve.

Programming 97

Programming Revenue Analytics Software Review 97

This is going to be BIG.

NOVEMBER 24, 2014

When I was coming out of college, working in finance, I used to think a lot about my salary. I liked maxing out on raises and I liked the feeling I got getting to a six figure salary. It was, in my mind, what the salary meant. Founders, I think the best thing you can do with your earliest employees is to be transparent.

Salary 130

Salary Venture Capital Equity Finance 130

Startup Professionals Musings

APRIL 7, 2023

Those who respond with one of the wrong answers, such as “I want to pay myself a salary,” usually go home empty-handed. Funding for founder salaries at this stage is a red flag. You may pay salaries to your team, but your salary should come from earnings, when they occur.

Elevator Pitch 228

Elevator Pitch Salary Angel Investor Viral 228

Steve Blank

MAY 19, 2015

I had lunch last week with Tom, the CEO of a startup that was quickly becoming a large company – last year’s revenue was $40M, this year likely to be $80M maybe even $100 million in ad revenue. to drive traffic to their site, which they then turned into ad revenue.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Startup Professionals Musings

APRIL 10, 2016

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Both Sides of the Table

DECEMBER 27, 2011

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. They have have raised $2-3 million, built a product that has some amount of market traction and got to annualized revenues of around $1 million.

Startup 418

Startup Revenue Technical Review Flash 418

ReadWriteStart

JUNE 14, 2012

So many tech startups begin the same way: One founder, one dream and a plan to make it happen. You will have the most chance for success by maximizing the number of founders with complementary skill sets. Most businesses stay that way - there are many more solo entrepreneurs than business owners with employees.

Technical Review 159

Technical Review CTO Hire Software Review Startup 159

Steve Blank

NOVEMBER 1, 2017

At GE the biggest problem in 2017 was major revenue misses in their Power business.) Often the short-term cuts directly affect employee salaries, jobs, and long-term investment in R&D. capture the imagination of investors and can focus on revenue and user growth instead of on the bottom line. So What is a CEO to Do?

Institutional Investors 233

Institutional Investors Dividend Stock Technical Review 233

SoCal CTO

NOVEMBER 1, 2010

I had a recent email dialog with the founder of a company looking for a CTO for their startup. And I tried to evaluate the idea and figure out: What did the founder really need here? Was it a Startup Founder Developer Gap ? And do I fit as a Part-Time CTO , Technology Advisor , CTO Founder , Acting CTO ?

Technical Cofounder 241

Technical Cofounder CTO Hire Equity Sweat Equity 241

Both Sides of the Table

MAY 19, 2013

My internal compass has always steered me strongly toward the belief that founders who can scale with their startup companies are better to back that founders who eventually need to hire a CEO. Very few founder CEOs go into the job ever expecting to give up their seat. We set out to find Jonathan’s “co-founder.”

Technical Review 303

Technical Review Cofounder Analytics Founder 303

Startup Professionals Musings

FEBRUARY 5, 2010

Pay people with equity or future revenue. When I was interviewed for my first startup CEO job, I was expecting a $150,000 salary, but instead was offered an opportunity to contribute $50,000 to the business, and work for equity only. Another one to avoid cash burn for software development is a contract for percent of future revenue.

Burn Rate 120

Burn Rate Startup Salary Equity 120

Startup Professionals Musings

APRIL 8, 2015

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 26, 2013

No salaries followed by low salaries. The scrounging and scrabbling and begging and fighting the a s for those morsels of revenue, those crumbs of validation. ” Almost all startup founders experience a deep and prolonged sadness after selling their company , even when the sale is an outrageous success. We did it.

Software Review 295

Software Review Startup Cofounder Search 295

Startup Professionals Musings

NOVEMBER 30, 2020

Some argue the only way to start is to drop everything and jump in with both feet, while others recommend an overlapped approach to the lifestyle, including not quitting your day job until you have revenue and a proven business model. Startups cost money but don’t pay a salary before revenue.

Entrepreneur 321

Entrepreneur Private Equity Startup Salary 321

Startup Professionals Musings

JULY 12, 2020

Those who respond with one of the wrong answers, such as “I want to pay myself a salary,” usually go home empty-handed. Funding for founder salaries at this stage is a red flag. You may pay salaries to your team, but your salary should come from earnings, when they occur.

Elevator Pitch 336

Elevator Pitch Salary Angel Investor Viral 336

Feld Thoughts

SEPTEMBER 16, 2011

Since SayAhh is in the pre-launch development stage, the company doesn’t have any revenue yet. This results in a gross margin of $0, where gross margin is revenue – cost of goods sold. The default Quickbooks setup uses “Income” to refer to “Revenue”. The largest expense a company usually has at this stage is salaries.

Balance Sheet 125

Balance Sheet Fractional CTO Burn Rate Salary 125

Startup Professionals Musings

SEPTEMBER 26, 2018

Others wait until the new business starts to generate revenue and profit before making the move. In my experience as a startup advisor, I find the minimum time to revenue is at least a year. Of course, you might be able to pay yourself a salary from the investment, but this will be minimal and critically watched. Which is right?

Salary 383

Salary Cofounder Lean Revenue 383

Startup Professionals Musings

JUNE 11, 2012

I’ll try to offer some guidelines to address these issues, but I generally recommend you keep the day job until your new company is producing real revenue. Otherwise, I suggest that founders be up-front with their employers, with an honest commitment that the “side” work on the potential startup will not jeopardize committed results.

Entrepreneur 239

Entrepreneur Cofounder Angel Investor Partner 239

Steve Blank

MAY 20, 2010

It was the Internet bubble and after almost three years our startup had found a business model and we were scaling revenue and headcount fast. You’re Just the Founders. When the call was almost over my partner and I mentioned, “We want to remind you guys that we’ve been working at founders pay for almost three years.

Founder 275

Founder Cofounder Salary Naming 275

YoungUpstarts

SEPTEMBER 1, 2015

by Eliot Burdett, co-founder and CEO of Peak Sales Recruiting. Generating revenue through sales, especially as start-up capital diminishes, can make or break a company’s success. These should include not only revenue goals but also the sales activity required to achieve the revenue. Don’t build too soon.

Sales 100

Sales Cofounder Sales Cycle Revenue 100

Startup Professionals Musings

MARCH 22, 2023

Rather than a focus on salary and perks, your focus is on customers, revenue, and operations. For example, founder Blake Mycoskie of TOMS shoes inspired everyone by highlighting and effectively communicating the higher purpose from of helping the needy by donating a pair of shoes for every pair sold.

Metrics 279

Metrics Startup Agile Salary 279