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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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The $10 Million Photo and Other VC Stories

ReadWriteStart

They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation. We had gone back and forth with them on valuation, but this was a new firm and they wanted to close a deal with us.

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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

Kayak Software Corporation. 3) ITA Relationship: Much has been made of the fact that Kayak along with OTAs (online travel agents) license data from ITA Software which is now part of Google. Post-money valuation probably no higher than $12M (2). Pre-money valuation was approx. Founding Date: 2004.

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The $10 million Photo and other VC Stories

Steve Blank

When we were trying to raise money for E.piphany, my last startup, I was negotiating with a venture capital firm called Infinity Capital. They really wanted to invest, but it was the beginning of the bubble, and I wanted (what was then) an absurd valuation. All we had were six slides, and I wanted a $10 million post-money valuation.

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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). All Rights Reserved. All Rights Reserved.