YoungUpstarts

JANUARY 24, 2018

As I highlighted in a recent blog post , digitally mature companies derive more revenue from their physical assets (+9%), are more profitable (+26%) and have overall higher market valuations (+12%). But to extract the most value out of a digital transformation, companies need to be obsessed by their customers.

Internet 150

Internet Demand Software Engineering Agile 150

Startup Professionals Musings

JUNE 5, 2021

High valuation, low profit. The focus should always be on execution, revenue, and profits. To the rest of us, new great things often start out looking like toys, and Gen-Y knows their toys. In startups these days, governments are incenting health and alternative energy solutions, to intentionally create a bubble.

Demand 362

Demand Government Venture Capital Valuation 362

Both Sides of the Table

SEPTEMBER 29, 2009

They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. The rest of this post series deals with the reasons why VC froze up in the first place, why investments have heated up recently and why the future of VC funding at the current pace is not certain.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Feld Thoughts

JANUARY 7, 2015

Companies were being bought (and valued) at 10x forward revenue only to be valued at between 0.5x revenue several years later. We were bought for a more reasonable 1x revenue (and about 4x pre-tax income) when the value of the AmeriData stock, options, and cash we took out were factored in. I’d argue the 0.5x

Stock Options 70

Stock Options Cofounder Revenue Hosting 70

Both Sides of the Table

APRIL 26, 2016

In SaaS (or any recurring revenue business) this is also a very difficult task. So measuring LTV requires that you look at cohorts of data over time to see how they perform and then make assumptions for the rest of the data set. One big, beginners mistake people make in LTV is to measure revenue.

Metrics 150

Metrics Cost Acquisition Startup 150

Hearpreneur

JANUARY 22, 2023

Positive experiences create emotional value, which keeps customers coming back and makes small businesses stand out from the rest. In recent years, eCommerce companies have begun to increase revenue by selling products directly via social media networks. Every year, social media coverage expands.

Artificial Inteligence 122

Artificial Inteligence Technical Review Entrepreneur Social Media 122

Lightspeed Venture Partners

OCTOBER 29, 2012

I’m posting my analysis of the most interesting story of Shark Tank season 4 episode 7 over there, and reviewing the rest of the pitches here. The company sought to raise $125,000 for 25% of the comapny, implying a $375,000 pre money valuation. The entrepreneurs dithered for a moment at the valuation.

Pre-Money Valuation 97

Pre-Money Valuation Offshore Valuation Cofounder 97

View from Seed

SEPTEMBER 23, 2019

You can read the rest of the posts in the series by clicking here *. To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. What not to include is directly stating valuation expectations.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. In India, the leading firms are slightly more concentrated with Sequoia India , Accel Partners , and Nexus Venture Partners being a cut above the rest. Finally, don’t over-optimize on valuation.

Asia 132

Asia Silicon Valley India Term Sheet 132

Berkonomics

AUGUST 3, 2023

When the need is high… For the rest of us, desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. For those of you who fit that description, nice work.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Up and Running

JULY 23, 2014

And the rest of us, starting, running, and growing a business, but not looking for outside investors, will probably need an exit eventually; but there’s probably no rush. That usually ends up as something like “[this similar company] was purchased by [that company] in [that year] for [that amount], which was [that multiple] of its revenues.”

Exit Strategy 131

Exit Strategy Software Review Angel Investor Startup 131

Lightspeed Venture Partners

OCTOBER 7, 2012

They won a design award at a trade show, but have no revenue and no orders. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Hippoland

JULY 24, 2016

Valuation is a nebulous topic amongst early stage startups, so I thought I’d really spell it out in detail. In short: Valuations for seed stage companies are fairly arbitrary and driven solely by supply and demand. Your startup’s valuation is not based on a proforma of your revenue.

Seed Stage 48

Seed Stage Valuation Vertical Demand 48

Both Sides of the Table

MAY 6, 2018

Let’s say you have built a SaaS company where a large part of the early revenue comes from a few big customers or a large part of the revenue is services based vs. software based. How to get your Series A mojo back The rest of the outline I’ll write as a series to come back to this blog if you want to read more. …

Revenue 236

Revenue Valuation Portfolio Restful 236

Berkonomics

FEBRUARY 9, 2023

The rest of the purchase price was concocted from a brew of zero-coupon bonds (where the face value is many times the invested amount until the reduced cost bonds mature thirty years later), and borrowing using the target company’s accounts receivable and other assets as collateral for a loan to purchase the company.

Naming 62

Naming Warrant Private Equity Valuation 62

Agile VC

MAY 26, 2011

LinkedIn’s product had only been live for a couple months, we only had tens of thousands of registered users, and wouldn’t start generating revenue for more than a year after this point. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. It was a $4.7M Author howerl.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Steve Blank

SEPTEMBER 14, 2009

Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. There was now a public market for companies with no revenue, no profit and big claims.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

View from Seed

SEPTEMBER 25, 2019

You can read the rest of the posts in the series by clicking here *. Something standard like a SaaS company where the exits scenarios and valuations are well-understood may not need a slide here, but the more non-traditional or unique the venture is, the more information which a Founder can fill in the blanks of “what could be” are helpful.

Seed Stage 166

Seed Stage Retention Restful Valuation 166

Startup Professionals Musings

AUGUST 1, 2016

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Austin Startup

AUGUST 20, 2017

Keep the valuations consistent with company progress. The bottom line is that the pedigree of your investors will have much to do with your ultimate valuation and with your enjoyment of the startup experience. Does the rest of your team measure progress the way you are? The rest will take care of itself.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Babbling VC

AUGUST 10, 2011

For the rest of you, let's get back to business. It's about to get rough out there and I am not even alluding to valuations. Make your customers happy, especially the ones generating the majority of your revenues. No matter what, stay focussed on generating revenues. . What is the reality now? Keep your employees happy.

Germany 76

Germany Stock IPO Valuation 76

Startup Professionals Musings

SEPTEMBER 7, 2015

I recently saw a startup projecting $50 million in revenue for the first year. I recommend five-year projections, to show the evolution of revenues and expenses and funding and profitability expectations over time. My rule of thumb is that startup-revenue projections in the fifth year better be between $20 million and $100 million.

Liquidity Event 120

Liquidity Event Startup Initial Public Offering Equity 120

Agile VC

OCTOBER 1, 2013

Facebook’s IPO was obviously a debacle, and in the private investment sphere valuations from the seed through late stage have declined for the most part from their peaks in late 2011 through early 2012. This is not ’98-99 when pre-revenue companies were IPO’ing.

IPO 147

IPO Cloud Valuation Mobile 147

Startup Professionals Musings

AUGUST 13, 2012

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Funding requirements.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

David Teten

AUGUST 6, 2015

One common option is a dedicated assumptions tab that flows into the rest of the model, and then outputs key pieces of data right at the bottom of the assumptions tab, so that the key inputs and outputs are in one place. financial statement summaries, valuation analysis, ratio analysis, etc.) 11) Separate out your model output.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Startup Professionals Musings

MARCH 20, 2013

High valuation, low profit. The focus should always be on execution, revenue, and profits. To the rest of us, new great things often start out looking like toys, and Gen-Y knows their toys. In startups these days, governments are incenting green and alternative energy solutions, to intentionally create a bubble.

Demand 224

Demand Green Finance Government 224

Up and Running

JUNE 14, 2017

But when I ran the numbers, the revenue from just the first three months from the 150 who were interested in premium would cover the investment and more. What happened to the rest? I built out the premium version, launched it, and emailed those who said they were interested in that version. Guess what? I went back to them and asked.

Technical Review 96

Technical Review Distribution Redemption Demand 96

Startup Professionals Musings

MAY 13, 2011

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Funding requirements.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Gust

JULY 10, 2012

Go back into your plan and find the core components that drive the rest. Narrow the market, narrow the business offering, and shorten the time from zero to revenue. Lower your valuation. Prove it to yourself and the rest of the world by starting a subset and making it work. . Partner up. Watch your costs.

Bootstrapping 165

Bootstrapping Valuation Restful Sales 165

Berkonomics

JUNE 8, 2017

For the rest of us desiring to build large, valuable enterprises quickly, the need for outside capital is high on our list of requirements and even the source for some sleepless nights as we worry over the availability and cost of capital. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Startup Professionals Musings

MARCH 25, 2011

High valuation, low profit. The focus should always be on execution, revenue, and profits. To the rest of us, new great things often start out looking like toys, and Gen-Y knows their toys. In startups these days, governments are incenting green and alternative energy solutions, to intentionally create a bubble.

Startup 225

Startup Demand Green Government 225

This is going to be BIG.

NOVEMBER 7, 2011

Valuations. There are a ton of companies being funded at $500+ million valuations--seriously limiting exit opportunities. Facebook is doing billions in revenues. LinkedIn has great revenue growth. Are their valuations justified? The have actual revenues that are growing. stock market."

Angel Investor 104

Angel Investor Valuation Startup Revenue 104

Gust

AUGUST 5, 2012

Clearly define the customer, channel, and revenue model associated with this solution. In this section, you need to be passionate about revenue, profit, and volume growth. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Funding requirements.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Feld Thoughts

NOVEMBER 2, 2016

The existential freakout that occurred in January and February seemed like the distant past with the lingering hangover being a clearer focus on valuation and overall funding needs from new investors. What other “macro” trends do you see affecting the rest of 2016 and 2017? For everything in between, good luck and be flexible.

Venture Capital 70

Venture Capital Private Equity Early Stage Valuation 70

Steve Blank

MAY 13, 2010

After a bit more discussion, I discovered the “problem in getting traction” meant revenue was zero. The rest of his story was mostly a blur. (In In reality, once you think you found the right model, most startups will go through multiple iterations on optimizing revenue and their business model.)

Founder 199

Founder Cofounder Business Model Customer Development 199

ReadWriteStart

SEPTEMBER 6, 2019

While most companies focus on revenue and profitability, Silicon Valley leaders tend to view valuation as a success barometer. Like any new technology, the success or failure of blockchain’s adoption rests in its applications. They can be limited to only those who need to know certain information.

Silicon Valley 103

Silicon Valley Artificial Inteligence Database SQL 103