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Valuations 101: The Venture Capital Method

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Post-money Valuation = $ 2.125 million.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

This is why investors really like SaaS software companies where you have recurring revenue and your largest customer accounts for < 5% of your revenue and your renewals rates are > 90%. Many software companies have > 80% gross margins which is why they are more valuable than say traditional retailers or consumer product companies.

Burn Rate 383
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So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. Only you know.

Burn Rate 150
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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

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. =. Kayak Software Corporation. Post-money valuation probably no higher than $12M (2). Pre-money valuation was approx. Series B Preferred.

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Guy Kawasaki’s 10 Questions to Ask Before You Join a Startup

www.mint.com

What is the post-money valuation of your last round? Post-money valuation” is the value of the company after the last round of money was put in (again, lines of credit and promises don’t count). It really comes down to the management, answers, instinct, experience and execution. All Rights Reserved.