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IRR is a vanity metric

VC Adventure

I’m observing that IRR is a metric that is becoming an increasing focus in venture, replacing fund return multiple as the key metric of success. I understand the draw of IRR, and – as a fund draws to a close – there’s no question it’s an important metric. A lot changes in that period of time.

IRR 116
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Is the Lean Startup Dead?

Steve Blank

Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits. And if the company does go public, the valuations are at least 10x of the last bubble. Some have labeled this period as irrational exuberance.

Lean 335
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Business Valuation: Determining The Worth Of A Company

YoungUpstarts

Business valuation is defined as a way to determine the overall economic value of a company , and is a necessary component of a sound business plan and strategy. Any of these situations will demand a valuation to determine current and future projected value. . Three Methods of Valuation. Life happens to all of us.

Valuation 162
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ESADE Business School Commencement Speech

Steve Blank

I’m sure many of you have heard his name. Metrics like Return on Net Assets, Return on Capital and Internal Rate of Return are the guiding stars of the board and CEO. As Harvard professor Clayton Christensen noted, these efficiency metrics provided wise guidance for times when capital was scarce and raising money was hard.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

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The Changing Venture Landscape

Both Sides of the Table

I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. On the one hand, you’re over paying for every investment and valuations aren’t rational. just to name a few!

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How to Get Sponsorship for Your Business, Book or Podcast

ConversionXL

But it’s not as simple as reaching out to a company you want to collaborate with and putting their name on your website in exchange for cash. If your audience isn’t interested in a sponsor’s product or service, then putting their name to your offer won’t deliver the ROI they’re looking for, ruining any chance of a long-term partnership.

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