David Teten

SEPTEMBER 23, 2017

Private equity and venture capital investors are copying our sisters in the hedge fund and mutual fund world: we’re trying to automate more of our job. An investor had few hard metrics other than the actual financials, and little technology to make the process scaleable. But we’re doing it slowly.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

David Teten

AUGUST 19, 2019

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. So what is Revenue Based Investing?

Revenue 60

Revenue Term Sheet Founder Technical Review 60

VC Cafe

FEBRUARY 21, 2023

In a contracted venture capital environment, where external funding is more difficult to raise, founders know that they need to make due with less, and extend the runway further. Some studies suggest that the best consumer subscription companies are able to retain 65% of their revenue after one year.

Retention 109

Retention Conversion Churn Rate B2C 109

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

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Duct Tape Marketing

NOVEMBER 14, 2013

Ego Metrics: What Measurements Matter? The problem is that some of these metrics aren’t meaningful. In fact, some of the most visible metrics are the most misleading. This is possibly the most visible metric in social media, but many of those followers are inactive or even inhuman robots. So what metrics really matter?

Metrics 72

Metrics Social Media Widget Chicago 72

Both Sides of the Table

SEPTEMBER 18, 2014

On the phone … Me: So, you raised venture capital? There were no metrics. Him: On metrics. Revenue multiple? If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. We raised a seed round. About $1 million. Me: At what price? Me: With a cap?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

David Teten

APRIL 6, 2015

There are multiple reasons for that, but a major one is that both VC and research funding is concentrated in areas where there appears to be short-term revenues, as opposed to areas that will save more lives and quite likely generate both long-term revenues and savings for society. Source: NIH, CB Insights.

Venture Capital 60

Venture Capital Technical Review Non-Compete Philadelphia 60

Steve Blank

JANUARY 22, 2014

Today it’s dominated by capital efficient software, web and mobile startups whereas 10 years ago it was dominated by semiconductor and hardware startups that consumed huge amounts of capital before their first dollar in revenue. This is true whether the company is concept stage or ramping revenue. The Bend Experience.

Early Stage 286

Early Stage Silicon Valley Oregon Technical Review 286

View from Seed

OCTOBER 24, 2019

The reason is that b2b fundraising is largely driven by data and metrics, and pre-seed dollars usually don’t get you to many meaningful data points. Most series A’s in B2B require a minimum level of top line revenue and a minimum amount of historical data to prove retention and some sort of repeatable growth engine.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

David Teten

DECEMBER 16, 2015

I review a lot of board decks with a beautifully hand-crafted page with metrics for the company. Good metrics are comparable across industries; comparative ; readily understandable; and help drive decisions. Comparative means that you can compare a metric across time periods, groups of users, or competitors. So how do you do it?

Metrics 60

Metrics Analytics Balance Sheet .Net 60

Both Sides of the Table

DECEMBER 27, 2011

You have to understand whether they’re likely to yield revenue growth in the near term OR whether you have access to cheap enough capital to fund your losses until your investments pay off. million in revenue three years later is, “So effing what?” Simplifying: Revenue -. ” Harsh, but reality.

Startup 418

Startup Revenue Technical Review Flash 418

Both Sides of the Table

MAY 23, 2012

Many observers of the venture capital industry have questioned whether its best days are behind it. Looking ahead at the next decade I am excited by what I believe will be viewed as one of the best and most rational investment periods for venture capital due to seven discrete factors: 1. This never existed a decade ago.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

YoungUpstarts

JULY 31, 2019

Of course, a certain amount of initial capital without financial performance is absolutely necessary to get a business off the ground, especially in regulated industries. Founders need seed capital to get their operations up and running, and to begin generating revenue. This also applies in acquisition conversations.

Cofounder 118

Cofounder Burn Rate Technical Cofounder Seed Capital 118

Steve Blank

NOVEMBER 16, 2009

In it, I got asked a question I often hear: “What if we have a web-based business that doesn’t have revenue or paying customers? What metrics do we use to see if we learned enough in Customer Discovery ? And without revenue how do we know if we achieved product/market fit to exit Customer Validation?”

Customer Development 219

Customer Development Web Developer Customer 219

David Teten

NOVEMBER 26, 2019

Instead of budget approvals, monitor key metrics and give managers more flexibility. The next most important set of metrics are sales by category; working capital (cash and other current assets, less current liabilities); EBITA; and gross margin. Traditional budgets can be destructive and a huge waste of time.

Agile 60

Agile Management Forecast Silicon Valley 60

Gust

OCTOBER 18, 2011

The Venture Capital Method. The Venture Capital Method (VC Method) was first described by Professor Bill Sahlman at Harvard Business School in 1987 in a case study and has been revised since. It is one of the most useful methods for establishing the pre-money valuation of pre-revenue startup ventures.

Valuation 174

Valuation Pre-Money Valuation Southern California Post-Money Valuation 174

SoCal CTO

MARCH 1, 2010

Startup Killer: the Cost of Customer Acquisition | For Entrepreneurs , February 2, 2010 Looks at the critical equation around customer acquisition cost vs. customer lifetime value similar to what I discussed in Startup Metrics but in more depth. Great stuff. How Unique Is A Unique Visitor? -

Acquisition 150

Acquisition Cofounder Technical Cofounder Cost 150

Steve Blank

MARCH 31, 2014

As the venture capital business has come roaring back in the last 5 years, startups are awash in available capital. Companies horde cash and squeeze the most revenue and margin from the money they use. Instead of measuring success in dollars of profit, …firms focus on measuring capital efficiency.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Steve Blank

SEPTEMBER 14, 2009

Over the same 30 years, Venture Capital firms have honed their skills and strategies to match Wall Streets needs to achieve liquidity for their portfolio companies. One of the biggest mistakes entrepreneurs make is misunderstanding the role of venture capital investors. What Do VC’s Do?

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

ReadWriteStart

APRIL 8, 2023

million people and generate monthly revenue. In my experience, I follow different resources, for instance, the Andreessen Horowitz blog , one of the top venture capital funds reporting trends in their newsletters, and INC.5000 TikTok and Influencers One viral video on TikTok can reach 1.5

eCommerce 185

eCommerce Technical Review Software Review Analytics 185

YoungUpstarts

NOVEMBER 20, 2019

You may be able to generate revenue, but VCs want exponential growth. You’ll certainly want to be clear about your unique differentiators, but VCs also want to see numbers and metrics, along with well-thought-out plans for how you’ll meet those metrics. Like you, they’re looking for opportunity. Be ready when it counts.

Technical Review 118

Technical Review Due Diligence Early Stage Differentiation 118

The Equity Kicker

FEBRUARY 8, 2012

Fortieth in a series of weekly posts by myself and Nicholas Lovell of Gamesbrief which answer the fifty questions you should ask before raising venture capital. With earlier stage companies investors generally don’t have the luxury of being able to rely on hard metrics and instead have to rely on gut feel – i.e. ‘direct’ evaluation.

Technical Review 123

Technical Review Product Venture Capital Valuation 123

David Teten

AUGUST 7, 2019

Likely signs of a Value investment: the company has challenges in filling out the round; the investors have more negotiating leverage than the founders during the closing process; the company has significantly better metrics (e.g. LTV / CAC, revenue growth, etc.) As booms progress, more and more investors adopt a Momentum model.

Venture Capital 60

Venture Capital Valuation Stock NDA 60

www.forentrepreneurs.com

FEBRUARY 2, 2010

Blog About Log in Register Designing startup metrics to drive successful behavior Great companies are almost always run by great management teams. Good metrics should also be actionable, and drive successful behavior. In a follow up post, I will use this technique to walk through the design of a set of metrics for a SaaS company.

Metrics 55

Metrics Design Entrepreneur Startup 55

BeyondVC

APRIL 4, 2018

Couple that with Mulesoft being bought for 21x TTM revenue ( see Tomasz Tunguz analysis ) at $6.5 There will also still be some amazing companies that raise their Series C, D and beyond funding rounds with scaling metrics. Their growth to over $509mm of revenue from $281mm 2 years ago is a case in point.

Cloud 60

Cloud Agile Architecture Azure 60

crowdSPRING Blog

OCTOBER 24, 2014

Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics | by @ttunguz – crowdspring.co/1sRVdjm. Why You Should Find Product-Market Fit Before Sniffing Around For Venture Money | Co.Labs – crowdspring.co/1sRVsv5. Design Is Changing How We Innovate | Co.Design – crowdspring.co/1sChJN5. 1DmUr1f.

Social Media 95

Social Media Small Business Design Media 95

Up and Running

JUNE 19, 2013

The New York Times profiles two successful tech start-ups— GoodData , which at its start raised more than $50 million in venture capital funding, and RJ Metrics, which held out with self-financing for as long as possible—that went after the same market at the same time, and contrasts their approaches to finance.

Venture Capital 70

Venture Capital Finance Lean New York 70

SoCal CTO

MARCH 5, 2007

However, Elgg could power 100,000 networks and it would make no difference - there is no revenue stream as we give everything away under a GPL license. Common revenue streams are consulting, training, support, customization, upgraded versions for corporate applications, etc. I understand his frustration.

Open Source 150

Open Source Business Model Technical Cofounder Southern California 150

SoCal CTO

MARCH 9, 2007

Kevin Federline Search Engine Realistic Entrprenuer's Guide to Venture Capital Time Rich, Time Poor and Apple F2F Still Matters 8 Ways the Internet has Changed Software Marketing. Technology Advisor Technology Roles in Startups Pricing Customer Acquisition Sunk Costs and More -. Marketing, Startups and Networking in Los Angeles.

Technical Cofounder 150

Technical Cofounder Southern California Los Angeles CTO Hire 150

crowdSPRING Blog

OCTOBER 28, 2011

9 Metrics to Help You Make Wise Decisions about Your Start-Up – [link]. Good data from @msuster on The State of Venture Capital and the Internet – [link]. Change Its Revenue Stream – [link]. Wow – only 1318 companies control 80% of global revenue – [link].

Social Media 98

Social Media Small Business Design Media 98

Cracking the Code

FEBRUARY 23, 2011

Thoughts from a Venture Capitalist on Software, Software-as-a-Service (SaaS), Cloud Computing, Internet and more. It would have been easy to explain the difference by changes in the 2010/2011 revenue growth projections but unfortunately that is not the case. revenues while large caps are trading at 6.4x. Venture Capital. (3).

Software Review 101

Software Review Technical Review Valuation Europe 101

SoCal CTO

MARCH 20, 2007

Kevin Federline Search Engine Realistic Entrprenuer's Guide to Venture Capital Time Rich, Time Poor and Apple F2F Still Matters 8 Ways the Internet has Changed Software Marketing. Technology Advisor Technology Roles in Startups Pricing Customer Acquisition Sunk Costs and More -. Marketing, Startups and Networking in Los Angeles.

Technical Cofounder 150

Technical Cofounder Southern California Search Engineer 150

SoCal CTO

MARCH 13, 2007

Kevin Federline Search Engine Realistic Entrprenuer's Guide to Venture Capital Time Rich, Time Poor and Apple F2F Still Matters 8 Ways the Internet has Changed Software Marketing. Technology Advisor Technology Roles in Startups Pricing Customer Acquisition Sunk Costs and More -. Marketing, Startups and Networking in Los Angeles.

Technical Cofounder 150

Technical Cofounder Southern California Los Angeles Internet 150

Reid Hoffman

MARCH 23, 2021

The metrics from the dashboard are the key inputs for collective decisions. You can always instrument your business and gather metrics, but that doesn’t mean the data you gather will be useful. Just track metrics that help you improve the product. The problem was that Groupon’s revenue growth was a false positive.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

Bryce Dot VC

DECEMBER 30, 2016

Venture Capital is a hell of a drug. Step 2- Came to believe that a metric greater than our valuation could restore us to sanity. Step 8- Made a list of all the truths we’ve stretched and metrics we’ve embellished to convince VCs, and ourselves, that we were a Unicorn in embryo, and became willing to make amends to them all.

Venture Capital 45

Venture Capital Programming Metrics Valuation 45

K9 Ventures

JUNE 5, 2015

The Venture Capital industry as a whole does a terrible job of giving things the right name and so we end up keeping the same name, but changing the meaning out from under it. So if the Micro-VCs are looking for Series A-like metrics, what does a company do when it’s just getting started? Scaling venture capital breaks it.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Both Sides of the Table

NOVEMBER 9, 2014

Generally speaking in venture capital financings the legal documents will specify that only “major investors” (a threshold set in the agreement – which can be $500,000 investor or more). They have listed forward revenue figures that are highly questionable and bring the issue of SEC oversight to my mind.

SEC 352

SEC Venture Capital Early Stage Cofounder 352