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Praying to the God of Valuation

Both Sides of the Table

Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. There were startups and a software industry but barely. Nobody cared about our valuations any more. What happened? There was no money train. It was 1991.

Valuation 466
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Rules of Thumb Business Valuation Methods Explained

Up and Running

In order to avoid formal valuation report costs, shareholders utilize benchmarks of the industry and rules of thumb to estimate the ballpark values of their interests. This article will cover all about the rule of thumb business valuation approaches, when to use them, and their pros and cons. Rules of thumb and business valuation.

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Om Malik on why valuations defy metrics

The Equity Kicker

When companies attract high valuations their investors are predicting the future too – either that the business will trade in M&A at a ‘strategic multiple’ or that they will generate big cash flows. For larger valuations it is the latter. That’s true, but in the startup industry we have to do it every day.

Valuation 123
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8 Tactics To Make You A Fearless Business Innovator

Startup Professionals Musings

Every business owner and entrepreneur I meet in my consulting rounds dreams of finding that “ disruptive ” innovation that will supercharge their business and move it into the ranks of business unicorns (billion-dollar valuations), such as SpaceX and Apple. Define realistic metrics to keep track of progress.

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5 Keys To A Viable Spending Rate And Cash Management

Startup Professionals Musings

Cash flow is a basic survival metric for every startup. For example, a software development startup raising $250,000 from angel investors better be able to operate on $25,000 per month. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity.

Burn Rate 258
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Why Misunderstanding Startup Metrics Can Cost You Your Business

Both Sides of the Table

There has been a lot of public debate over the past several weeks about whether it’s a good thing to be “gross margin positive” or not and commentary always reminds me that some people at startups don’t quite understand financial metrics or even how to think about which ones are healthy. This is how much you spend to get a new customer.

Metrics 150
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5 Ways To Conserve Investor Cash And Ensure Survival

Startup Professionals Musings

Cash flow is a basic survival metric for every startup. For example, a software development startup raising $250,000 from angel investors better be able to operate on $25,000 per month. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity.

Burn Rate 310