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. Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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

Berkonomics

DECEMBER 20, 2018

[Email readers, continue here…] Arthur: This is a matter between the owner of your IP (you) and the would-be user of your IP. The license to use your IP can be in the form of a one-time payment or structured as a continuing fee. He’s bought the royalty, an intangible, entitling him to a percentage of your revenues.

IP 54

IP Intellectual Property Investment Bankers Product 54

Berkonomics

DECEMBER 20, 2018

[Email readers, continue here…] Arthur: This is a matter between the owner of your IP (you) and the would-be user of your IP. The license to use your IP can be in the form of a one-time payment or structured as a continuing fee. He’s bought the royalty, an intangible, entitling him to a percentage of your revenues.

IP 48

IP Intellectual Property Investment Bankers Product 48

YoungUpstarts

NOVEMBER 20, 2019

You may be able to generate revenue, but VCs want exponential growth. If that’s the case, and they don’t consider investing in two competitors to be a conflict of interest, ask them how they protect founder IP and other proprietary assets. Have a reasonable attitude about your early-stage valuation, and don’t get too hung up on it.

Technical Review 140

Technical Review Due Diligence Early Stage Differentiation 140

Version One Ventures

OCTOBER 15, 2020

Given these key advantages, I believe that Lightning (or something like it) will ultimately eat all of the USD payment networks and create the foundation for MoIP (Money over IP). . And >40% of that revenue is coming from in-game purchases. The app could then take a small % of all revenue from “paid” messages.

Networking 168

Networking Global OTC Security 168

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Austin Startup

AUGUST 20, 2017

Keep the valuations consistent with company progress. The bottom line is that the pedigree of your investors will have much to do with your ultimate valuation and with your enjoyment of the startup experience. I am very surprised when that cool thing actually meets a customer need or drives revenue.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Both Sides of the Table

APRIL 25, 2011

A great recent example of this was a successful group of entrepreneurs who had created a company that will do $10-12 million in revenue at their system integration business (read: services business) in 2011 after having done $5 million or so in 2010 and $2-3 million in 2009. You own the IP you create. He is the majority owner.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Agile VC

AUGUST 9, 2012

We also know lots of valid reasons why the company could be valued at far less than it once was including: Stalled Growth – revenue essentially flat over the last 4 quarters. The “value” case goes like this: A) Valuation Net of Cash – Zynga’s market cap sits at around $2.2-2.3B trailing revenue multiple.

Stock 160

Stock LBO .Net Valuation 160

Gust

SEPTEMBER 17, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? People seem concerned about valuation.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Scott Edward Walker

NOVEMBER 2, 2011

Button-down IP ownership and assignment issues (see post here ). Don’t issue stock options unless a proper option plan is in place and a valuation has been done in compliance with Section 409A of the Internal Revenue Code (see post here ). Put proper privacy policies in place and make sure you adhere to them (see post here ).

Accredited Investor 111

Accredited Investor Stock Options Delaware Silicon Valley 111

Software By Rob

FEBRUARY 28, 2012

I asked for all of the following information: Monthly revenue. If you can go over the valuation methods each side used, that would be very helpful to know, even if you don’t share the cash figures involved. I hired a lawyer with experience in IP website acquisitions to draft up a custom agreement. Monthly expenses.

Acquisition 53

Acquisition Software Review Technical Review NDA 53

Scott Edward Walker

OCTOBER 27, 2015

Button-down IP ownership and assignment issues (see post here ). Don’t issue stock options unless a proper option plan is in place and a valuation has been done in compliance with Section 409A of the Internal Revenue Code (see post here ). Put proper privacy policies in place and make sure you adhere to them (see post here ).

Intellectual Property 40

Intellectual Property Accredited Investor Vesting Delaware 40

Up and Running

JANUARY 5, 2018

In grocery, which represents over half of Walmart’s revenues, it plans to add 1,000 online grocery order pickup locations in 2018 in stores around the US; in December 2017 it unveiled a meal kit option and a partnership with Buzzfeed that will integrate Buzzfeed recipes with Walmart groceries. Increase in-store efficiency.

Acquisition 94

Acquisition Hawaii Partner Non-Compete 94

Start Up Blog

FEBRUARY 13, 2016

In case you don’t know, many of them of have the pleasure of only paying 1% tax on their revenue. Their ‘so called’ profit numbers are much lower than you’d expect them to be based on their revenues. So low, that you’d probably close down the business if your profit to revenue ratios ever got that low. tax on $10 of revenue.

Intellectual Property 48

Intellectual Property Australia Singapore Government 48

OnlyOnce

DECEMBER 3, 2010

It’s an important topic — as entrepreneurs build businesses, they frequently end up creating new revenue opportunities and go off on productive tangents. If you are selling assets, you need to clearly define what they are, and what they aren’t, and you need to make sure all legal details (contracts, IP, etc.)

Non-Compete 67

Non-Compete B2C IP Valuation 67

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. Morgan Stanley had proposed a higher valuation to let them in. If it’s a biz deal you might care about IP protection, revenue share, investment commitments to joint marketing – whatever. million at a $15 million pre-money valuation. Yes, this was stupid.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

www.paulgraham.com

OCTOBER 23, 2010

But its hard to raise money with an IP cloud over your head, becauseinvestors cant judge how serious it is. Before you consummate a startup, ask everyone about their previous IP history. 6] What I didnt grasp at the time was that the valuation wasnt just the value of the code wed written so far. Dont do what we did.

Startup 105

Startup Cofounder Software Stock 105

www.currentlyobsessed.com

MAY 28, 2010

Valuation is an important aspect of VC deal terms, and a major determinant of your ultimate outcome. I unexpectedly found that it was more helpful to think about the company valuation as an output variable in the fund-raising equation. The net effect was more money raised, higher valuation and the same percentage of equity sold.

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

Transformify

APRIL 12, 2020

Paying above the local market rate, transferring lots of small payments that lead to the same IP address, etc. Round-tripping is used by the founders of a startup to inflate the revenue and profit and mislead investors and lenders. USD 80 000 revenue (as ABC consolidates the revenue of ‘’Sunshine’’).

Bangladesh 98

Bangladesh Philippines Salary Cofounder 98

grasshopperherder.com

SEPTEMBER 24, 2011

Valuations. I think it’s difficult, if not impossible, to value a pre-revenue company with any reasonable accuracy. I was approached with one sweat equity offer that placed the valuation of the company at >$5 million pre-money and before even a seed round of funding. The company with all the revenue is Company C.

Sweat Equity 41

Sweat Equity Equity Cofounder Non-Compete 41

ConversionXL

APRIL 12, 2017

No, the first 2% is more valuable in terms of revenue. Create a revenue forecast before you even run the experiment. You need to track the right revenue goals. The CEO doesn’t care about his website, he cares about his valuation (i.e. Sell CRO by calculating the valuation increase. Valuation increase?

San Antonio 86

San Antonio Metrics B2B Analytics 86

Austin Startup

DECEMBER 10, 2017

We raised significant capital at a high valuation based on his credibility, and he certainly was entitled to call the shots on decisions like that. I bring this up because I believe we are often trying to teach founders how to do everything in their startups from scratch.

Georgia 48

Georgia Startup Incubator Harvest 48