Startup Professionals Musings

NOVEMBER 28, 2020

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? He nails the current key startup parameters, including the following: Crafting a lean business plan as your road map.

Intellectual Property 404

Intellectual Property Startup Angel Groups Social Media 404

Both Sides of the Table

JUNE 28, 2018

My friend Michael Broukhim, founder & co-CEO of FabFitFun and I recently had a catch-up meeting for 3-miles on the Santa Monica “Bird Trail” No company has ever elicited so many questions by friends, colleagues, entrepreneurs, fellow VCs and journalists as has Bird, the company that pioneered the electronic scooter as a service market.

San Francisco 256

San Francisco Valuation Technical Review Los Angeles 256

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Both Sides of the Table

SEPTEMBER 28, 2014

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

MAY 28, 2018

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. Founder: “$8–10 million” VC: “What’s your current burn rate?” Founder: “$250k / month.” Founder: “Um. Why are you raising so much?” Let me check my plan.”

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Steve Blank

SEPTEMBER 5, 2018

Jeff Katzenberg has a great track record – head of the studio at Paramount, chairman of Disney Studios, co-founder of DreamWorks and now chairman of NewTV. Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits.

Lean 335

Lean Burn Rate Startup IPO 335

YoungUpstarts

NOVEMBER 19, 2020

EBITDA is the most important profitability metric to consider as many valuations are based on a multiple of this metric. Generally, companies sell for either a percentage of revenues or a multiple of EBITDA. That being said, it makes sense that when business is booming, your valuation will be higher.

Exit Strategy 246

Exit Strategy Intellectual Property Valuation Metrics 246

VC Cafe

AUGUST 2, 2022

Tim Sweeney, the founder and CEO of Epic is a long term visionary of our online future and the Metaverse. billion revenue in 2021 for Epic Games and was played by 83.3 Tim Sweeney, Epic Games’ founder and CEO. Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz from Pitch Decks.

IP 206

IP Cofounder Valuation Acquisition 206

The Startup Magazine

FEBRUARY 21, 2024

Arif Bhalwani is the co-founder and CEO of Third Eye Capital (TEC) in Toronto, Canada. As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. The firm has made more than $4.5

Technical Review 134

Technical Review Due Diligence Bankruptcy Intellectual Property 134

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

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

The Startup Magazine

NOVEMBER 28, 2022

They provide a hands-on transformation and revenue growth partner for B2B technology companies. Each engagement is personally undertaken by their founder and principal, Mitul. Prior to working with Citius, he helped global businesses generate up to $200M in annual recurring revenue and realise valuations of $1Bn+.

Founder 129

Founder B2B Private Equity India 129

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. These usually play a role in the very early stage of your business, primarily pre-revenue. Reasons for funding. ? Incubators and Accelerators. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

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

Steve Blank

APRIL 23, 2014

buy out an entire company for its revenue and profits. VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup. However, these nosebleed valuations make it even more important in getting the acquired company integrated correctly.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

ReadWriteStart

JULY 15, 2020

Startup founders are trying to figure out how to fundraise through a pandemic and economic crash. New talk of capital efficiency is gratifying, but there was another lesson from pre-COVID-19 valuation struggles. Venture capitalists and early-stage investors have told all of us, founders are critical to a startup’s valuation.

Valuation 91

Valuation South Carolina San Jose Balance Sheet 91

Both Sides of the Table

SEPTEMBER 22, 2012

“Why do founders want to take the VCs’ money? Founders will continue to take the “growth at all options” path that leads to privacy & trust creep at places like Quora. After all, growth equals high valuations and loads of venture capital! In revenue terms our first two years of sales were $2.1

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

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?” The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Startup Professionals Musings

NOVEMBER 21, 2016

They expect to hear about founders and team member’s prior experience in building a startup, and knowledge in the relevant solution domain. Many naïve startup founders believe that they can make good money with low margins. Declare a $10 million valuation with no revenue or customers.

Intellectual Property 120

Intellectual Property Valuation Technical Review Equity 120

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. I’ve decided to take all of my private conversations and subjective points-of-view on the topic and make them public in a keynote speech at the Founder Showcase in San Francisco on June 15th. That’s stupid.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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

YoungUpstarts

JANUARY 10, 2018

How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? Minimizing losses in the year before you begin shopping around for buyers will increase profit and help you get that higher valuation. Fact is, you just don’t know whether your business is ready to sell.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Startup Professionals Musings

FEBRUARY 21, 2012

Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. For example, a web-based startup should be able to operate for a year if they raise $500,000 from the founders or angels. Great strategy. Do it yourself and barter for services.

Burn Rate 232

Burn Rate Startup Salary Equity 232

Startup Professionals Musings

OCTOBER 18, 2023

Most startup founders don’t relish the thought of managing repeatable processes, greedy stockholders, and endless regulation reports. New startup founders keep all the operating metrics they need in their head. Secure your company’s sustainability through multiple revenue streams and customer sets, and solid core business processes.

Exit Strategy 248

Exit Strategy Valuation Acquisition Metrics 248

VC Cafe

JANUARY 24, 2021

billion gamers worldwide will help the global games market generate revenues of $189.3 billion in revenue last year. According to Ark Invest’s research , revenue from virtual worlds will compound 17% annually from roughly $180 billion today to $390 billion by 2025. Fortnite alone made $1.8 Twitch stats in 2020.

Technical Review 207

Technical Review Audio Forecast Social Media 207

YoungUpstarts

JUNE 16, 2020

Business valuation is defined as a way to determine the overall economic value of a company , and is a necessary component of a sound business plan and strategy. Any of these situations will demand a valuation to determine current and future projected value. . Three Methods of Valuation. Life happens to all of us.

Valuation 162

Valuation CPA Software Review Revenue 162

The Startup Magazine

SEPTEMBER 10, 2019

There is a myth among first time tech founders that product is everything. Here are five financial concepts that every startup founder should know to build an everlasting company. Asset valuation. The concept of asset valuation may seem counterintuitive, but it is an important idea. million in revenue at the time.

Founder 118

Founder Valuation Dividend Startup 118

Berkonomics

JANUARY 28, 2021

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road. Why fight about valuation, or disappoint the founder at the outset?

Early Stage 62

Early Stage Valuation Pre-Money Valuation Cofounder 62

Startup Professionals Musings

DECEMBER 11, 2022

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Agile VC

APRIL 17, 2011

Kayak was started here in my backyard of Boston… co-founder & CTO Paul English and the product/engineering team is based here in Concord MA. Co-founder & CEO Steve Hafner and the business team are based in Norwalk, CT. Financial Snapshot: 2010 Revenue: $170 million. Distribution revenue is CPC and CPA. .

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Startup Professionals Musings

JANUARY 9, 2021

Most startup founders don’t relish the thought of managing repeatable processes, greedy stockholders, and endless regulation reports. New startup founders keep all the operating metrics they need in their head. Secure your company’s sustainability through multiple revenue streams and customer sets, and solid core business processes.

Exit Strategy 434

Exit Strategy Valuation Acquisition Metrics 434

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?” The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Hunter Walker

DECEMBER 13, 2020

If things are going great, you still may get a lower valuation or smaller round. It doesn’t matter what industry, what product, what revenue model, what stage of development. Are you a founder who trained themselves to become a better salesperson? You may end up decreasing the quality of outcomes by a standard deviation or more.

Technical Cofounder 144

Technical Cofounder Cofounder Startup Matching 144

Startup Professionals Musings

JUNE 26, 2013

It’s higher risk, but higher return, to pick the big winners early, before Angels have set unreasonable valuations and restrictive terms. More sources of funding for early-stage startups may drive up valuations on these deals, which will lower the returns for the Angels and super-Angels willing to do these deals.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

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

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. That is to say, they’d want to be able to control costs and revenues at a high level. His first capital raise was a $2.75

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94