Startup Professionals Musings

SEPTEMBER 7, 2015

I recently saw a startup projecting $50 million in revenue for the first year. I recommend five-year projections, to show the evolution of revenues and expenses and funding and profitability expectations over time. My rule of thumb is that startup-revenue projections in the fifth year better be between $20 million and $100 million.

Liquidity Event 120

Liquidity Event Startup Initial Public Offering Equity 120

Startup Professionals Musings

AUGUST 13, 2012

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Steve Blank

MARCH 18, 2011

The signals are loud and clear : seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble. VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter.

Internet 334

Internet IPO Silicon Valley Agile 334

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. Projected revenues and expenses over the strategic period. This allows them to calculate burn rates, break-even points and forecast the company valuation over time.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

MAY 13, 2011

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Steve Blank

JULY 15, 2010

Until 1995 startups going public typically had a track record of revenue and profits. Suddenly there was a public market for companies with limited revenue and no profit. Number of Venture Backed Liquidity Events 1991-2000. Number of Venture Backed Liquidity Events 2000-2010. Source: NVCA.). Lessons Learned.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Startup Professionals Musings

FEBRUARY 13, 2016

Justify funding requirements, use of funds and specify a current valuation estimate. What are your forecasts for revenue, expenses and cash flow? If you don’t plan a liquidity event, you won’t find many investors interested. Quantify founder investments, both cash and sweat-equity.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Berkonomics

AUGUST 20, 2015

Dave’s note: Guest author, David Steakley returns to explain his theory of exit valuations. The inciting incident in a movie is the event at the beginning of the story that causes the hero’s life to be completely transformed and irrevocably changed, and makes the whole story unfold. But, they were clearly mouthwatering.

Liquidity Event 48

Liquidity Event Private Equity Valuation Equity 48

Gust

AUGUST 5, 2012

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Exit strategy.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). Better yet, the valuation of your enterprise is often higher than if the same investment were taken from a professional investor.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

APRIL 22, 2010

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it requires at least 100M users and $50M investment. Exit strategy.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Gust

SEPTEMBER 5, 2012

Turn the question on its head: How could it make sense to lend money to a brand new, seed-stage company with no revenue, no products, and no collateral? (You Advising investors, I would advocate for traditional convertible notes (with a valuation cap) over this new structure. How can this possibly make sense?

Finance 134

Finance Convertible Security Equity Seed Stage 134

Berkonomics

DECEMBER 17, 2020

Your principal focus may be on the valuation of the company before the investment is made, which determines the amount of the company you will retain after the investment. For early stage investors, the usual expectation is seven years from investment to expected liquidity. Individual super angel investors. And the one thing in common?

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Growthink Blog

MAY 26, 2011

Last week, TruckCenter.com was purchased by Liquidity Services (NASDAQ: LQDT), a company that runs online auctions for surplus goods. I found this pretty amusing since when a company is purchased, we often say it reached a "liquidity event." Earn-outs are often used to bridge a valuation gap. your business) into cash.

Acquisition 81

Acquisition Liquidity Event Valuation Revenue 81

Startup Professionals Musings

MARCH 13, 2020

Find some credible opportunity statistics that can support your own revenue expectations of between $20 million and $100 million in the fifth year. > Market penetration and revenue targets related to opportunity size. Companies that get investor attention usually double their revenue or more every year.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. As the business owners had a longer-term perspective, decisions were made with greater deliberation and with a more conservative recognition of risk.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). Better yet, the valuation of your enterprise is often higher than if the same investment were taken from a professional investor.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

The Next Web

SEPTEMBER 29, 2013

Investors are always thinking about growth mode because that’s the path to where they want to go – liquidity event. Some metrics that I like to look for are: Lifetime value of a customer, average revenue per buyer, cost of a paying customer, registration rates, etc. How do you do that? Now let’s talk about the metrics.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Berkonomics

SEPTEMBER 10, 2015

I recommended an exit because I knew the money flowing in to their space would also increase valuations – possibly by 2x to 5x over normal ranges. They knew their revenues were getting ready to grow – and possibly explode. You can probably guess the young entrepreneurs wanted to wait a ‘little longer.’. Dave’s book on exits.

Vertical 48

Vertical Finance Valuation Global 48

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. The data presents a historical insight on a cap table that can affect the valuation of your startup when it comes time for a new round of fundraising. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

dondodge.typepad.com

JANUARY 15, 2011

The entrepreneur expects the company to be worth many times this valuation and so does the investor. The key is to have several VCs or investors competing for the deal to arrive at a "fair" valuation. So they will give you a pre-money valuation somewhere around the amount you raise. That is how much you should raise.

Equity 40

Equity Employee Dilution Valuation 40

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Berkonomics

APRIL 3, 2014

Your principal focus may be on the valuation of the company before the investment is made, which determines the amount of the company you will retain after the investment. They look for businesses that are in large markets, that can grow fast, and that can achieve revenues in excess of $40 million within five years of founding.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

Berkonomics

DECEMBER 19, 2013

Revenue projections: What will happen to the company if the revenues and earnings projected on a worst case basis are not achieved as predicted? In a liquidation, would you have profited at the expense of your investors by taking high salary or draws before breakeven? Order all 3 Berkonomics books for $49.95,a a 33% discount.

Pre-Money Valuation 105

Pre-Money Valuation Liquidity Event Cofounder Valuation 105

Seeing Both Sides

SEPTEMBER 15, 2015

Only a handful of so-called unicorns — companies that have achieved a valuation of over $1 billion in the last 10 years — come from Israel, and only one Israeli firm, Teva, ranks in the world’s 500 largest companies by market capitalization. That’s the good news. The bad news is that Israeli startups are struggling to scale.

Cofounder 20

Cofounder Technical Review United States 20

VC Cafe

NOVEMBER 9, 2011

The US markets have generally proven themselves as giving better valuations, and long term liquidity.”. If you don’t have over 100-150 million in revenue, then stay private, it is quite hard in the public market with that little revenue.” An ipo is not really an exit, it is a liquidity event.

IPO 92

IPO Cofounder Europe 92