YoungUpstarts

NOVEMBER 19, 2020

Does it have a niche or intellectual property? EBITDA is the most important profitability metric to consider as many valuations are based on a multiple of this metric. That being said, it makes sense that when business is booming, your valuation will be higher. Is your product thriving or dying?

Exit Strategy 246

Exit Strategy Intellectual Property Valuation Metrics 246

Gust

NOVEMBER 2, 2011

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. Dave’s valuation model first appeared in a book published by Harvard’s Howard Stevenson in the middle nineties. Add to Pre-money Valuation. Characteristic.

Valuation 79

Valuation Pre-Money Valuation Intellectual Property Southern California 79

Startup Professionals Musings

OCTOBER 14, 2016

The fact is that valuations are largely set by top venture capital investors and financial firms, and they all have their own proprietary formulas for assigning value. If your new venture is still in the idea or development stages, don’t even think about a high valuation. Strong intellectual property and defensibility.

Intellectual Property 120

Intellectual Property Valuation Merger Exit Strategy 120

Startup Professionals Musings

OCTOBER 27, 2014

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition).

Software Review 250

Software Review Software Technical Review Intellectual Property 250

Steve Blank

APRIL 23, 2014

If they decide to buy, large companies can: license/acquire intellectual property. VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup. Five Types of Innovation to Buy. buy out another company’s product line for the product.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Startup Professionals Musings

SEPTEMBER 10, 2018

Your idea is not intellectual property yet, so it has no inherent value. Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Key to required patents or trade secrets. Level of responsibility and time allocated.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

Startup Professionals Musings

SEPTEMBER 30, 2013

Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Without revenue, your investors are largely limited to friends, family and fools.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Startup Professionals Musings

AUGUST 25, 2018

Those that do it right also have the unprecedented opportunity to join the elite ranks of 250 unicorns (relatively new companies with a current valuation of over $1 billion). These days you can create a C-corp or LLC online quickly at a low cost, to serve you well in signing partners, intellectual property, investors, and revenue.

Technical Cofounder 184

Technical Cofounder Intellectual Property Silicon Valley LLC 184

Gust

OCTOBER 19, 2014

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition).

Software Review 173

Software Review Software Technical Review Intellectual Property 173

Startup Professionals Musings

MARCH 11, 2016

Create and highlight your intellectual property portfolio. The business plan should address all key questions, including valuation, funding needed, use of funds and exit strategy. In addition, your company and social media names are key intellectual property.

Angel Investor 120

Angel Investor Intellectual Property Accredited Investor Angel Groups 120

Startup Professionals Musings

AUGUST 31, 2012

Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Without revenue, your investors are largely limited to friends, family and fools.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Startup Professionals Musings

AUGUST 4, 2014

Your idea is not intellectual property yet, so it has no inherent value. Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Key to required patents or trade secrets. Level of responsibility and time allocated.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

YoungUpstarts

DECEMBER 14, 2016

A disclosure schedule should be as thorough as possible to avoid any information that might make your potential buyer question your accountability and should cover key contracts, equity holders and options, litigation, intellectual property and warranties. Employees and contractors. Protect your intangibles.

Acquisition 100

Acquisition Intellectual Property Technical Review Due Diligence 100

Startup Professionals Musings

APRIL 17, 2023

Another good indicator of your real stage is the valuation you can set for your company at any given moment, to determine what portion of your equity an investor will expect of his money. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Angel Investor 313

Angel Investor Intellectual Property Investment Bankers Private Equity 313

Startup Professionals Musings

AUGUST 25, 2017

They come at the early stage while a startup has no revenue or valuation, so professional investors are hard to find. It won’t cost you the many thousands of dollars to outsource your prototype to China, and risk losing the intellectual property, and it will hook you up to peers and investors who can help you make your dream a reality.

Technical Cofounder 153

Technical Cofounder Intellectual Property Wiki Cofounder 153

Startup Professionals Musings

FEBRUARY 15, 2023

It’s equally easy to go online and incorporate your new entity, register some intellectual property and have some fun with social media for marketing and interacting with customers. Adding free users or customers to increase valuation makes sense for a venture-backed startup looking to go public, but will kill bootstrapping.

Equity 349

Equity Hockey Stick Bootstrapping Sweat Equity 349

Startup Professionals Musings

DECEMBER 11, 2022

Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation. Lack of intellectual property. Investors are looking to buy a chunk of the business, not the product. Ask only for the money you can justify. Naïve expectations on funding terms and process.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Startup Professionals Musings

NOVEMBER 21, 2016

Investors read this as an excuse for no real intellectual property or innovation. Declare a $10 million valuation with no revenue or customers. The average valuation for Angel investments is about $2.5 Investors fear negative vibes will infect the business. Touts “first-mover advantage” as the primary barrier to entry.

Intellectual Property 120

Intellectual Property Valuation Technical Review Equity 120

Startup Professionals Musings

JANUARY 7, 2023

Perhaps the most famous bubble for startups was the dot.com craze that crashed 20 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive. Falling victim to a magical mania or bubble.

Intellectual Property 314

Intellectual Property Entrepreneur Bankruptcy Viral 314

Startup Professionals Musings

NOVEMBER 4, 2011

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Reserve the company name on social networks to protect it.

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

Startup Professionals Musings

JUNE 17, 2011

Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Without revenue, your investors are largely limited to friends, family and fools.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

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

Startup Professionals Musings

AUGUST 24, 2016

Your idea is not intellectual property yet, so it has no inherent value. Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Key to required patents or trade secrets. Level of responsibility and time allocated.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

Startup Professionals Musings

SEPTEMBER 22, 2021

They need to believe your valuation, based on current revenue and intellectual property, and feel the equity offered gives them a real return for the risk. As you may have seen on the Shark Tank TV show, offering a tiny equity amount for a large investment will not endear you to investors.

Intellectual Property 352

Intellectual Property Equity Bootstrapping Valuation 352

Startup Professionals Musings

SEPTEMBER 23, 2010

Define some intellectual property. File a patent and trademarks to show real intellectual property. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Reserve the company name on social networks to protect it.

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224

Startup Professionals Musings

NOVEMBER 14, 2010

Creating a strong value proposition requires substantial customer insight, thorough study, an understanding of the real value of intellectual property, thoughtfulness, and several iterations. Planning for valuation growth and investor exit should begin prior to the investment. Participation.

Intellectual Property 265

Intellectual Property Balance Sheet Phoenix Arizona 265

Startup Professionals Musings

MAY 22, 2010

Register some intellectual property. Intellectual property is a large element of most early-stage company valuations, and this value determines what percent of the company an investor will expect to get for his money. Without revenue, your investors are largely limited to friends, family and fools.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

Startup Professionals Musings

JULY 22, 2020

Another good indicator of your real stage is the valuation you can set for your company at any given moment, to determine what portion of your equity an investor will expect of his money. Prior to the growth stage, your company valuation is limited to goodwill based on intellectual property and team experience, since you have no revenue.

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

Startup Professionals Musings

MAY 18, 2020

It’s equally easy to go online and incorporate your new entity, register some intellectual property and have some fun with social media for marketing and interacting with customers. Adding free users or customers to increase valuation makes sense for a venture-backed startup looking to go public, but will kill bootstrapping.

Hockey Stick 423

Hockey Stick Bootstrapping Sweat Equity Intellectual Property 423

Startup Professionals Musings

MAY 4, 2016

Who would not want to joint the unicorns (recent startups with a current valuation of over $1 billion)? Before you bring on partners, develop intellectual property, raise capital, or generate revenues, you need to establish an official business entity. Incorporating a business entity early through online services.

Intellectual Property 120

Intellectual Property Startup Angel Groups Social Media 120

Startup Professionals Musings

MARCH 14, 2020

Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation. Lack of intellectual property. Investors are looking to buy a chunk of the business, not the product. Ask only for the money you can justify. Naïve expectations on funding terms and process.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Startup Professionals Musings

OCTOBER 19, 2015

Intellectual property is a business issue, not a technical issue. Patents can raise startup valuation by investors by as much as a million dollars, and will attract acquisitions rather than copycats. Technology that can’t be sold for a profit or appeals only to early adopters is not a viable business.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

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

Startup Professionals Musings

APRIL 12, 2020

Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive. Falling victim to a magical mania or bubble.

Intellectual Property 310

Intellectual Property Startup Bankruptcy Viral 310

YoungUpstarts

OCTOBER 28, 2015

“And if you have a valuation cap; a higher cap is always better than a lower cap.” The primary terms for these types of transactions are the valuation cap and the conversion discount. ” Intellectual Property. ” The Cost of Financing. Debt also has a due date and interest rate to negotiate.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

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

Both Sides of the Table

MARCH 21, 2013

Protect Your Intellectual Property. It also is a great way to finance your business without facing dilution before you actually raise venture capital and when the valuation you might get from angels is less than you’d want. By year 2 I’d like to see PS at 50% maximum, which is still high.

Software Review 321

Software Review Software IP Technical Review 321