Startup Professionals Musings

OCTOBER 14, 2022

In his classic book, “ The Leadership Capital Index ,” Dave Ulrich, a best-selling author, business consultant, and business school professor, provides some real insights and metrics on what makes up the elements of goodwill in the minds of top valuation experts. How much goodwill can you and your company command today?

Technical Review 323

Technical Review Due Diligence Valuation Leadership 323

Startup Professionals Musings

JUNE 24, 2020

As a frequent advisor to new entrepreneurs and startups, I often hear your frustration with being treated differently from other startups by investors, on expectations for valuation , traction, and market size. Valuations here are always low, and funding generally depends on friends and family, or a few forward-thinking angels.

Artificial Inteligence 436

Artificial Inteligence Marketing Valuation Startup 436

Gust

OCTOBER 18, 2011

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. It is one of the most useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in

Valuation 174

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

Both Sides of the Table

APRIL 26, 2016

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. That is what finances rapid growth.

Metrics 150

Metrics Cost Acquisition Startup 150

Startup Professionals Musings

DECEMBER 30, 2022

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.

Technical Review 252

Technical Review Silicon Valley Software Review Metrics 252

Startup Professionals Musings

MAY 14, 2023

Cash flow is a basic survival metric for every startup. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall.

Burn Rate 258

Burn Rate Hockey Stick Management Salary 258

Startup Professionals Musings

SEPTEMBER 16, 2023

Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? You don’t have to be a heavily funded later stage startup to get access to “big data,” customer analytics, and metrics dashboards. Angel groups, accelerators, and incubators are pervasive.

Intellectual Property 261

Intellectual Property Entrepreneur Angel Groups Social Media 261

VC Cafe

OCTOBER 23, 2022

” No one questions the importance of revenue, but asking the question enabled us to start thinking on what would be the right metric. Did you know that companies like Airbnb, Spotify and Netflix purposely avoid setting revenue as their North Star Metric? Why is revenue not a good ‘North Star’ Metric?

Metrics 179

Metrics Revenue B2C Portfolio 179

YoungUpstarts

NOVEMBER 19, 2020

EBITDA is the most important profitability metric to consider as many valuations are based on a multiple of this metric. That being said, it makes sense that when business is booming, your valuation will be higher. A diversified customer base can reduce cash flow risks and greatly increase your company’s value.

Exit Strategy 246

Exit Strategy Intellectual Property Valuation Metrics 246

Startup Professionals Musings

NOVEMBER 28, 2020

Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? You don’t have to be a heavily funded later stage startup to get access to “big data,” customer analytics, and metrics dashboards. Angel groups, accelerators, and incubators are pervasive.

Intellectual Property 404

Intellectual Property Startup Angel Groups Social Media 404

Austin Startup

APRIL 25, 2017

In order to achieve 20x growth, Snap needs grow both of those metrics 4–5x. In summary: Snap’s current business doesn’t justify a $20B valuation. How can one justify a $20B valuation for Snap? The product that could most likely justify Snap’s $20B valuation is Spectacles. Let’s look at each figure.

Valuation 48

Valuation Technical Review Forecast Social Network 48

Startup Professionals Musings

AUGUST 19, 2020

Cash flow is a basic survival metric for every startup. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall.

Burn Rate 310

Burn Rate Hockey Stick Salary Angel Investor 310

VC Adventure

MAY 5, 2022

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

IRR Metrics Valuation LP 116

YoungUpstarts

OCTOBER 24, 2017

A CPA provides input on tax structure and metrics, and assists with due diligence related to your industry. Is it prudent to have a set formula for valuation before you know how the company will perform or will you require the company to pay for an expert to value the company if one side wants to sell? Lump sum at closing?

Partner 208

Partner Technical Review Intellectual Property Due Diligence 208

Both Sides of the Table

FEBRUARY 27, 2019

The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. Often board members themselves don’t do the work to say “what metrics would we like to see.” If you have some key metrics or financial figures that go with the pre-read even better. The meeting starts.

Stock Options 226

Stock Options Metrics Stock Valuation 226

View from Seed

DECEMBER 4, 2019

At the time, I spent most of my time describing the metrics themselves and how VCs and their LPs evaluate performance based on these measurements. If you aren’t familiar with these metrics, I recommend reading the original post to get a sense of the numbers that I’ll be reviewing here. So, is this good or bad?

LP 256

LP IRR Distribution Portfolio 256

Steve Blank

SEPTEMBER 5, 2018

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

Lean Burn Rate Startup IPO 335

Both Sides of the Table

JULY 17, 2018

" Revenue doesn't pay your bills, GM does  —  @msuster 2/ Founders obsess with revenue as a vanity metric. But if you want to add some in the comments section on Medium and I’ll make sure to read them. Some even grow "bad" revenue just to show growth.

Founder 242

Founder Dilution Software Review Later Stage 242

Startup Professionals Musings

SEPTEMBER 29, 2018

Cash flow is a basic survival metric for every startup. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

The Startup Magazine

JANUARY 14, 2020

Higher asset valuation – growing awareness about the environment; the social impact of buildings and the need to meet sustainability credentials is increasingly making real estate investors and occupiers turn to green buildings. The cumulative cost impact often adds to lower building operation and corresponding maintenance cost.

Green 137

Green California Government Valuation 137

YoungUpstarts

JANUARY 10, 2018

How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? Minimizing losses in the year before you begin shopping around for buyers will increase profit and help you get that higher valuation. Another important metric is churn. This plan will help you with that.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Altgate

DECEMBER 15, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← No one wants to tell you your baby is ugly More on Liquidation Preferences → Pre-Money Valuation vs Number of Founders Posted on December 15, 2010 by admin Here’s a chart of the day worth sharing.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

Startup Professionals Musings

NOVEMBER 4, 2015

In a new book, “ The Leadership Capital Index ,” Dave Ulrich, a best-selling author, business consultant, and business school professor, provides some real insights and metrics on what makes up the elements of goodwill in the minds of top valuation experts. I have paraphrased his key points here as follows: Leader personal impact.

Leadership 120

Leadership Technical Review Due Diligence Valuation 120

VC Adventure

AUGUST 31, 2017

If you read my blog regularly you know I love (LOVE) metrics. So no surprise that when River Cities Capital released an overview of SaaS operating and valuation benchmarks, I hung on every juicy detail. They took the 92 public SaaS companies and analyzed their key operating metrics. The valuation metrics show this clearly.

IPO 113

IPO Vertical Balance Sheet Valuation 113

Startup Professionals Musings

OCTOBER 18, 2023

New startup founders keep all the operating metrics they need in their head. Even if you don’t have a formal board of directors, it pays to have trusted advisors who will give you regular unbiased feedback on your team strengths and weaknesses, financial and operating ratio norms, and an external view of current company valuation issues.

Exit Strategy 248

Exit Strategy Valuation Acquisition Metrics 248

Steve Blank

MARCH 31, 2014

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. Ultimately this is not just another staff function.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Both Sides of the Table

JUNE 5, 2011

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.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

A Smart Bear: Startups and Marketing for Geeks

MARCH 21, 2017

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. Remember this is revenue , not valuation. Large companies don’t acquire small companies for their financials. Zoom out to see the strategic decision.

Balance Sheet 242

Balance Sheet Vertical Acquisition Revenue 242

View from Seed

MARCH 24, 2021

In this comprehensive template and guide we break down each of the nine core sections in the deck: intro , team , what do you do , is it working , why does it matter (market) , can you be the best in the world (product, growth, financial metrics) , where are you going , what do you want (the ask) , and appendix. ” (Rob Go).

Seed Stage 177

Seed Stage Hiring IPO Analytics 177

Steve Blank

FEBRUARY 26, 2020

What most founders don’t realize is: Every stage of a startup requires a different set of metrics and milestones and founder skills. What is some of the critical metrics that matter? Note that each market – web/SAAS/physical products – and channel – online/direct sales – has different metrics and a different funnel steps.)For

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Startup Professionals Musings

JUNE 22, 2016

That should make you wonder - how do you measure traction in a metric? While thinking about the parameters of traction, and how to measure it, I was impressed with a new book, “ Scaling Lean: Mastering the Key Metrics for Startup Growth ” by Ash Maurya, a serial entrepreneur, and creator of the one-page business modelling tool Lean Canvas.

Metrics 143

Metrics Advisory Board Startup Lean 143

VC Cafe

JANUARY 14, 2022

Many of the companies that went public via SPACs saw their valuations dramatically reduce in the months that followed post IPO. Blackstone added Yifat Oron to lead the local office, and the team has already invested in Wiz, a cybersecurity startup that reached $6 billion valuation in two years.

Technical Review 158

Technical Review Lock-up Period South Korea 158

Startup Professionals Musings

OCTOBER 5, 2014

Cashflow is a basic survival metric for every startup. That should equate to an adequate valuation for a $2 million follow-on Series-A round, without giving away all the equity. Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Both Sides of the Table

SEPTEMBER 10, 2021

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.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

YoungUpstarts

SEPTEMBER 16, 2015

What’s critical for entrepreneurs to understand is that valuations for startups do not increase at a linear rate; they increase geometrically based on achieving the right milestones. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation.

Valuation 100

Valuation Dilution Chicago Technical Review 100

Startup Professionals Musings

JANUARY 9, 2021

New startup founders keep all the operating metrics they need in their head. Even if you don’t have a formal board of directors, it pays to have trusted advisors who will give you regular unbiased feedback on your team strengths and weaknesses, financial and operating ratio norms, and an external view of current company valuation issues.

Exit Strategy 434

Exit Strategy Valuation Acquisition Metrics 434

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68