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Valuation Methods 101

Gust

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. Then: Post-money Valuation = Terminal Value รท Anticipated ROI.

Valuation 174
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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

Gross burn is the total amount of money you are spending per month. Net burn is the amount of money you are losing per month. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

Burn Rate 383
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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. As the risks below get eliminated the higher the valuation investors are prepared to pay.

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Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

I’ve been writing up reviews of this season’s Shark Tank pitches from a silicon valley VCs perspective. They won a design award at a trade show, but have no revenue and no orders. Doing the research to form your own view of a company’s prospects is called due diligence. BACK 9 DIPS.

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Unintended Consequences: When SAFE and Convertible Notes Go Awry

Pascal's View

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. But it is also a topic that many find esoteric and difficult to grasp.

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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

AGILEVC My idle thoughts on tech startups. Now that Google’s acquisition of ITA is closed, following lenghty FTC review, it would appear Kayak is poised to proceed with their IPO in the coming months. =. Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

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Guy Kawasakiโ€™s 10 Questions to Ask Before You Join a Startup

www.mint.com

If the answer to the question centers around โ€œWe will achieve revenue soon so our net will improve and give us more runway,โ€ it means the company is in trouble because no product ever ships on time nor achieves the companyโ€™s โ€œconservative forecast.โ€ What is the post-money valuation of your last round? Thatโ€™s cool.