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Startup Valuation: How Much Is Your Company Worth?

Seed Stage Capital

skip to main | skip to sidebar 19 January 2010 Startup Valuation: How Much Is Your Company Worth? They dazzle. It is analogous to a make-vs.-buy

Legal Checklist for Startups

Scott Edward Walker

Button-down IP ownership and assignment issues (see post here ). 5.  None of this is rocket science. 

IP 101 for Startups

StartupCFO

Last week I spoke with Sunny Handa from law firm Blakes and some accounting and valuation experts from accounting firm BDO on intellectual property for startups. We covered legal, valuation, accounting and practical aspects. On a related note, Miltons has just released a free book on IP for Canadian companies here.

Bad Notes on VC

Gust

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early.

Startup Blog: Think Ahead When You are Negotiating IP Rights

Taffy Williams

Valuation of a diagnostic company is likely to be lower than for a therapeutic company in the same healthcare field. So what is the problem?

Corporate Acquisitions of Startups: Why Do They Fail?

Steve Blank

However, these nosebleed valuations make it even more important in getting the acquired company integrated correctly. The Innovation Portfolio.

8 Intellectual Property Items Every Startup Needs

Startup Professionals Musings

When someone says Intellectual Property (IP), most entrepreneurs think only of patents. You need all these before you start looking for funding.

The risks of being a small investor in a private company

Chris Dixon

Management gets $3m carveout, Series B investors get $27m, and Series A investors get zero. 2) Issuing of massive option grant to management along with new financing at a below-market valuation. Company is doing well and is offered a Series B at a significantly higher valuation. Company gets sold for $30m. Company sells for $10m.

Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

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.

Bad Notes on Venture Capital

Both Sides of the Table

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early.

What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

So money spent should add equity value or create IP that eventually will. Valuation. wanted to call out special attention to valuation in this debate. So a large part of your personal assessment on how much you can afford to burn also has to be your current valuation. ” I highly recommend reading it.

Selling a Line of Business

OnlyOnce

The first is to clarify for yourself up front:  are you selling a true line of business, or are you selling assets?  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.) Selling a Line of Business. one is B2B, the other is B2C).

The Top 4 Items You Need Documented When Selling Your Website Through a Broker

Blogtrepreneur | Entrepreneur Blog

Firstly, the website broker will review the data in order complete an accurate assessment and valuation of the business. Blog & Grow

Social Media Accounts are Intellectual Property

Startup Professionals Musings

When someone says Intellectual Property (IP), most entrepreneurs think only of patents. You need all these before you start looking for funding.

How to Make Sure Professional Services Don’t Take Over Your Software Company

Both Sides of the Table

Importantly, make sure that you retain IP rights to your custom work which needs to be part of the engagement contract. training. configuration.

IP 77

What Should You Do with Your Crappy Little Services Business?

Both Sides of the Table

You own the IP you create. In a down market IP can become a huge differentiator. 3. This post originally appeared on TechCrunch. Period.

Six Reasons Not to Invest in a Venture Capital Fund

This is going to be BIG.

On paper valuations are kind of meaningless. Just because the next biggest fool pays X for preferred shares, creating an implicit valuation for all the shares, doesn't mean you can either get out of it at that price or that you can be sure of the exit price. Let's be clear. The meeting is nicely done, but it's just that one meeting.

Channel your Inner VC to Understand Startup Valuations

www.currentlyobsessed.com

For some closing thoughts, I’ll just add that: Valuation tends to be too much of a focus for most early stage companies.  Like this post?

Top 120 Startup Posts for 2010

SoCal CTO

Some really great stuff in 2010 that aims to help startups around product, technology, business models, etc. First Principles. Berkonomics , November 29, 2010 Rice Alliance IT/Web 2.0 Forum December 9th Lineup - Startup Houston , November 27, 2010 When to step on the gas and go for it? If you think so, please let me know what they are

CTO 89

10 Concrete Steps to Assure Business Innovation

Startup Professionals Musings

Longer-term, enhanced product value begets superior company valuation through your organization’s intellectual property (IP) portfolio.

Most Common Early Start-up Mistakes

Both Sides of the Table

Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. Make sure you own your IP. Otherwise you run the risk that in the future somebody claims that the programming work that they did for you represents their IP and not yours. 8.

IP 87

Ten Principles Which Spell Continuous Innovation

Startup Professionals Musings

Longer-term, enhanced product value begets superior company valuation through your organization’s intellectual property (IP) portfolio.

Tune In, Turn On, Drop Out – The Startup Genome Project

Steve Blank

However, this does not mean that investors don’t have a significant effect on valuations and M&A). 5. Founders overestimate the value of IP before product market fit by 255%. . Ok, I get a lot of these. Is this some grad student or post doc who wanted to do some independent study? Hmm, now I’m getting intrigued. asked.

14 Interesting Findings From The Startup Genome Project

YoungUpstarts

However, this does not mean that investors don’t have a significant effect on valuations and M&A). 5. better user growth. 2.

B2C 26

The Legal Side of Entrepreneurship

YoungUpstarts

“And if you have a valuation cap; a higher cap is always better than a lower cap.” Financing. ” The Cost of Financing.

Read My Lips: We Are Not Walking Away from WebOS

Venture Chronicles

First the tech pundits, who are centering on the IP is the main asset argument. So we’ll discount it by half and using Google per-per-patent benchmark of $550k per patent we arrive at a valuation of $467m, which is really dependent upon there being some competitive bidding for the assets otherwise it’s a complete fire sale.

IP 16

Understand the tricks Multinationals use to avoid paying tax

Start Up Blog

This is not done to save on production costs, but to justify the location of IP assets in these low tax regimes. Don’t be evil hey?

The Company Milestones Angel Investors Care About

Business Plan Blog

Common types of IP rights include copyright, trademarks, patents , design rights, and trade secrets. The Milestones Angel Investors Care About.

Best Way to Protect Your Brilliant Ideas

Fresh Inc.: The Staff Blog

We can't call the "Patent Police." If I think someone is infringing on my IP, is there value to sending cease-and-desist letters? to find out.

When Does Zynga Become a Value Stock?

Agile VC

The “value” case goes like this: A) Valuation Net of Cash – Zynga’s market cap sits at around $2.2-2.3B as of this post.

Stock 24

Startup Resources

www.vccafe.com

IP Location Tools. Seed Stage Valuation Guide. Lodestone Innovation Partners (IP) Ltd are spin-out specialists. About VC Cafe.

Steve Blank: Why Corporate Acquisitions of Startups Fail

Fresh Inc.: The Staff Blog

These nosebleed valuations, however, make it even more important that the acquired company becomes integrated correctly.

Startup Blog: Need Investment? Increase the Chances by Beefing Up.

Taffy Williams

Also, do the best you can on your limited budget to shore up the IP situation. Startup Blog Steps to consider to start and grow a company.

How Do You Set Up Operations In The US And Why? Interview With Microtask CEO

ArcticStartup

Obviously fundraising is another aspect: the valuations in SV are much higher than in Europe, and there's way more funding available. issues.

Week In Review – Aug 22 – Aug 28, 2010

Active Garage

As organizations – and their customers – increasingly rely on database, server, and IP-connected applications and data sources, the importance and responsibility of maintaining continuity of the business infrastructure and limiting costly downtime in the event of a disaster, is paramount. 4 steps to effective Disaster Recovery planning.

Startup Blog: Decisions, Decisions, Decisions ? Second Guessing

Taffy Williams

It is always easy to decide to switch when you believe you will increase the valuation of your business. What are your thoughts on this? Stuck?

Venture Capitalists, Super Angels and the State of Startup Funding

mashable.com

The competition for funding startups is increasing the valuations of startups, giving entrepreneurs and founders better investment terms.

Guest Post from HBS Professor: The Nuances of Marketplaces

the vc in me

Example: starting in 2005 a lot of entrepreneurs and investors were bullish about market exchanges for IP (e.g. But I always thought it would be impossible to get MSPs for IP to scale given the lack of valuation transparency and lack of transaction standards (not to mention huge litigation risks). the vc in me. Welcome! Profile.

Startup Blog: Tips on getting a partnership for your early drug.

Taffy Williams

For several years, she has been providing companies help in identification, evaluation, valuation, negotiation and strategy for partnering in or out.

How to Start a Startup

www.paulgraham.com

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. Want to start a startup? Get funded by Y Combinator. March 2005 (This essay is derived from a talk at the Harvard ComputerSociety.) Hard, but doable.