Startup Professionals Musings

AUGUST 17, 2014

Here are some basic “rules of thumb” that every Angel or venture capital equity investor uses, to help you anticipate their reactions. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year. Gross margins greater than 50%.

Liquidity Event 249

Liquidity Event Equity Venture Capital Merger 249

Steve Blank

JUNE 11, 2013

The test is: If you add one more sales person or spend more marketing dollars, does your sales revenue go up by more than your expenses? What are revenue strategy and pricing tactics? These sources are a lot more forgiving of iterations and pivots than later-stage venture-capital funds. Filed under: Venture Capital.

Venture Capital 225

Venture Capital IRR Liquidity Event Business Model 225

Steve Blank

JULY 15, 2010

If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Here’s why.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Startup Professionals Musings

MAY 28, 2013

Here are some basic “rules of thumb” that every Angel or venture capital equity investor uses, to help you anticipate their reactions. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year. Gross margins greater than 50%.

Liquidity Event 243

Liquidity Event Startup Equity Venture Capital 243

Berkonomics

AUGUST 3, 2023

The subject of raising money is critical to many businesses and a passing option to others, depending upon the capital efficiency of the enterprise. Venture, private equity and more: Here we lump a large number of investor classes into one. For those of you who fit that description, nice work.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Steve Blank

JULY 2, 2009

To an entrepreneur, being asked to join a venture firm with an Entrepreneur-in-Residence title means you have been tapped on the shoulder by the VC gods. The CDROM content business in the early 1990’s was one of the many of the long line of venture capital fads. We understood none of this. More detail in future posts.

Silicon Valley 120

Silicon Valley Technical Review RSS Software Review 120

Gust

AUGUST 10, 2014

Here are some basic rules of thumb that every Angel or venture capital equity investor uses, to help you anticipate their reactions. Aggressive revenue projections and growth rate. Revenue in the fifth year should be at least $20 million, with a growth rate average of 100% per year. Gross margins greater than 50%.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Steve Blank

JULY 19, 2010

Where’s My Liquidity Event. Some VC’s feel that if a startup has grown past the founder’s ability to manage and scale (and hasn’t had a liquidity event,) they should be able to remove the founding CEO and (at best) walk them out the door with only the stock they vested to that day. Filed under: Venture Capital.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Both Sides of the Table

MARCH 3, 2013

Venture Capital. He talked about a unique model where you don’t have to become liquid in venture capital and can target singles & doubles. VC can’t don’t invest in these kinds of companies because they can’t get out (no liquidity event). Liquidity is a process not an event.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

Steve Blank

JUNE 23, 2016

Intel under their last two CEOs delivered more revenue and profit than any ever before. But starting in the last quarter of that century and accelerating in this one, a new form of financing – risk capital (angel and venture capital) — emerged. They knew how to execute the current business model.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Up and Running

SEPTEMBER 19, 2017

That is to say, they’d want to be able to control costs and revenues at a high level. Private equity investments are an important part of many startup business’s plans for accelerating growth or providing founders with a liquidity event. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Steve Blank

MARCH 18, 2011

VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. The reward for doing so was a liquidity event via an Initial Public Offering. For VC’s and entrepreneurs the gold rush to liquidity was on. The New Exits.

Internet 334

Internet IPO Silicon Valley Agile 334

Berkonomics

JUNE 8, 2017

The subject of raising money is critical to many businesses and a passing option to others, depending upon the capital efficiency of the enterprise. Venture, private equity and more: Here we lump a large number investor classes into one. For you who fit that description, nice work.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. About this same point in time, the journalists that focus specifically on the venture capital industry noted something quite profound. Competition also has access to capital.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

SEPTEMBER 27, 2010

There are real changes in the venture capital industry and it would have been fun to talk about them. If the company is moderately successful, growing and has great prospects for the future than a small liquidity event will help founders & venture capitalists to be aligned. Answer: Not much.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Gust

NOVEMBER 4, 2011

Although Intermix was doing well during that period, bringing in around $75 million annual revenue, all of the explosive traffic growth was occurring at one property, MySpace – the jewel for which FIM ended up acquiring the whole Intermix crown. of MySpace, Inc.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Seeing Both Sides

SEPTEMBER 15, 2015

To answer these questions, we built a database of 112 Israeli companies founded between 1996 and 2013 that have met or exceeded $20 million in revenue. According to Ori Israely, investor and former general partner of Giza Venture Capital, “There is more fit between [an] Israeli entrepreneur and [an] Israeli investor in the seed stages.

Cofounder 20

Cofounder Technical Review United States 20

Berkonomics

JANUARY 20, 2010

This post will be perhaps a bit longer than usual, but certainly of great interest for those with interest in or have need for more capital… This stage is critical to many businesses and a passing option to others, depending upon the capital efficiency of the enterprise. For you who fit that description, nice work.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

dondodge.typepad.com

JANUARY 15, 2011

Here are some "average" guidelines for equity percentages at a liquidity event. from David Dalka - Creating Revenue and Retention - Chicago GSB MBA As discussed in my recent post about a TiE event on Chicago start ups, there are many factors to consider when taking in funding and employees. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40