ReadWriteStart

OCTOBER 7, 2010

As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I I know Silicon Valley and the MBA types look down upon lifestyle businesses.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Startup Professionals Musings

JUNE 26, 2013

Examples of some leaders in this space include Mike Maples in Silicon Valley and David S. It’s higher risk, but higher return, to pick the big winners early, before Angels have set unreasonable valuations and restrictive terms. Every early-stage startup should explore this new funding alternative.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

Both Sides of the Table

MARCH 1, 2016

And while there is a narrative that most LPs only want to invest in the long-standing Silicon Valley brands that have existed for the past 40 years, there is evidence that many LPs understand that it is possible for new entrants in our industry to stake out grounds of differentiation.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

The Next Web

SEPTEMBER 13, 2013

Thomas Clayton has started and run numerous high-tech startups in Silicon Valley. The process of raising money in Asia is very different from raising money in Silicon Valley and, frankly, it’s not nearly as easy. Set your expectations – VCs in Asia are different from the Valley.

Asia 132

Asia Silicon Valley India Term Sheet 132

Steve Blank

MARCH 12, 2014

We realized that past K-12 Entrepreneurial classes taught students “the lemonade stand” version of how to start a company: 1) come up with an idea, 2) execute the idea, 3) do the accounting (revenue, costs, etc.). We wanted to teach our students how to think like entrepreneurs not accountants.

Lean 334

Lean Customer Development Startup Silicon Valley 334

Gust

OCTOBER 16, 2012

This summer I conducted our third annual survey of the pre-money valuation of pre-revenue companies recently funded by angel groups in North America. Access to our 2010 and 2011 surveys can be found at 2011 Valuation Survey of North American Angel Investor Groups. Pre-revenue life Science, biotech and medical device deals.

Angel Groups 169

Angel Groups Valuation Pre-Money Valuation North Dakota 169

YoungUpstarts

JUNE 26, 2020

Here are three pieces of advice that are tossed around Silicon Valley as if they are gospel, but they are really Startup Myths. I don’t know exactly when it happened but at some point, Silicon Valley became obsessed with the word billion. Myth #3: Take the Highest Valuation You Can Get. I was wrong.

Finance 205

Finance Silicon Valley Valuation Startup 205

Both Sides of the Table

FEBRUARY 16, 2017

Are you beating up every Silicon Valley VC that didn’t do Facebook or Google or Uber early? We felt proud to be the lead investor in Maker Studios at a sub $5 million valuation. And we feel great about the many companies in LA that have now reached serious revenue growth.

IPO 214

IPO Los Angeles Technical Review Silicon Valley 214

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Agile VC

MAY 26, 2011

Silicon Valley is still emerging from the tech bubble and massive downturn of late 2000-2002. Online social networking is a concept still being evangelized even in Silicon Valley… Friendster is in private beta (wasn’t until Oct 2003 they received Google acquisition offer which they turned down for Kleiner/Benchmark round).

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

The Startup Toolkit

AUGUST 30, 2012

The valley only has about 4x more VC deals than London (although average valuations are admittedly 2x higher): The valley is not 1000x better. The vast majority of VC rounds go to revenue generating companies. 60% are for revenue generating companies with a sellable product. But check it. Everywhere.

Silicon Valley 52

Silicon Valley San Francisco New Jersey India 52

Feld Thoughts

AUGUST 25, 2015

Some were Silicon Valley early stage companies, such as Apple, Quantum, and Masstor Systems. while none of the non-Silicon Valley regional firms were long-term successful as regional firms. However, none were based in the Silicon Valley and are probably unfamiliar names to today’s practitioners.

Venture Capital 70

Venture Capital SBIC Technical Review Silicon Valley 70

Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. Silicon Valley.

Angel Groups 125

Angel Groups Valuation Pre-Money Valuation St. Louis 125

Steve Blank

FEBRUARY 10, 2016

Keen Home appeared on the TV show, Shark Tank , in 2012, landing one of the highest valuations in the show’s history. Steve : You mean in the community you’re in where the founder is an outlier, rather than at the core where you go to New York or you to go Silicon Valley and everybody’s a founder, including the waiters?

Silicon Valley 120

Silicon Valley Ohio Columbus Entrepreneur 120

Startup Professionals Musings

APRIL 24, 2011

Your friends and family are really the only answer until you have a significant revenue stream. Back to VCs, Silicon Valley venture capital firms are still the most active. Use friends, family, and angels, if possible, to get a product, revenue, and customers first before the VC connection.

Venture Capital 233

Venture Capital Revenue Elevator Pitch Silicon Valley 233

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

The Startup Magazine

JUNE 1, 2023

By Daniel Sokolovksy, Co-Founder and CEO, WARP and Troy Lester, Co-Founder and CRO, WARP The dissolution of Silicon Valley Bank (SVB) was more than just a bank collapse, it was a reality check for both startups and the VCs that fund them. We’re hitting record revenue months, weeks, and margins. That includes us.

Early Stage 112

Early Stage Los Angeles Silicon Valley Cofounder 112

Steve Blank

JUNE 15, 2011

A tech bubble is the rapid inflation in the valuation of public and private technology companies that exceeds their fundamental value by a large margin. Today, the signs of the new bubble are the Linked-In initial public offering (IPO), Facebook’s stratospheric valuation and the rapid rise of early-stage startup valuation.

Silicon Valley 327

Silicon Valley Stealth Valuation Mississippi 327

crowdSPRING Blog

NOVEMBER 30, 2012

… Checking In on Foursquare’s Valuation – [link]. In Silicon Valley, Technology Talent Gap Threatens G.O.P. Special Report: Silicon Valley’s dirty secret – age bias | Reuters – [link]. Red All Over: Newspaper Revenues Fall In Q3 – [link]. Want to create a new habit?

Social Media 100

Social Media Small Business Central African Republic Design 100

Austin Startup

OCTOBER 15, 2017

What seems to be the best way to create customers and revenue may result in a business model that is out of vogue with the investment world and shortchanges you on enterprise valuation. In the long ago I spent a brief period of time assisting Pertec, the San Fernando Valley company that bought MITS and its Altair product line.

Technical Review 48

Technical Review Software Review Nevada Silicon Valley 48

Both Sides of the Table

JULY 27, 2014

We both agree that the later-stage valuations are being driven up to a point that feels irrationally priced [he uses b-round SaaS valuations as an example and I am willing to be even more broad based]. Most of those industries are fee-based and are competing on revenue growth. I don’t totally agree with that view.

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

Both Sides of the Table

MAY 19, 2010

Founded in November 2007 in New York City by Alexis Maybank and Kevin Ryan (co-founder of DoubleClick); CEO is Susan Lyne (ex-CEO Marta Stewart Living Omnimedia) Revenue estimates: $50mm in 2008; $170mm in 2009 (versus budget of $150mm); $450mm forecasted for 2010. Note that these are “gross” revenue numbers. OTHER DEALS: 1.

Partner 240

Partner New York City Cofounder Syndicate 240

Berkonomics

NOVEMBER 4, 2016

There is a universal truth: fewer than one in a thousand start-ups meet or exceed their projected revenues in the periods planned. So how do you use financial projections as valuation metrics when you know the odds of those being accurate predictors of the future are so very unreliable? But a lot of time has passed since then.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

Lightspeed Venture Partners

OCTOBER 7, 2012

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. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. BACK 9 DIPS.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Austin Startup

MAY 10, 2021

but then going public and rising 23% on day one to… drumroll please… a $36B valuation ?—?a a full 60x trailing twelve month revenues. Companies have increasingly digitized operations, but in silos, said lead director Rich Wong, a partner at Silicon Valley venture-capital firm Accel, an early investor in UiPath.

Silicon Valley 113

Silicon Valley IPO Venture Capital Valuation 113

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. Valuations are rising to match. A typical seed round valuation may be $6M pre, raising $2M for an $8M post, or even as high as an $8M pre, raising $2M for a $10M post. In the 80s and 90s a company would go public when it hit $20M in revenue.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

ReadWriteStart

MARCH 24, 2011

Additional work in figuring out the precise go-to-market consumer, academic institution, or enterprise - each is a different business), and consequent business model and pricing model will help enhance the company's valuation. The game set retails online at $49.95, and about 2,000 unites have already been sold.

Illinois 114

Illinois Entrepreneur Silicon Valley Chicago 114

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

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. Because customer financing equals revenue, not equity. Why not go further, develop more valuation, customer experience, and really, deeply validate the business? You can get cash without diluting your ownership in the company.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

View from Seed

APRIL 30, 2015

Below, we talk to Glen Mello , Managing Director of Silicon Valley Bank’s accelerator team in Boston. Traction and revenue? Typically, the gross margins aren’t there compared to software, so revenue isn’t quite as important in the early stages of getting to market. Business model? Previous capital raised?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Early Growth Financial Services

OCTOBER 27, 2014

Outsourced financial services firm ranked in top 50 of fastest growing private companies in Silicon Valley. As Silicon Valley Business Journal notes, in Silicon Valley, “it takes explosive growth to get noticed.” billion in revenue for 2013, and company growth for 2012 to 2013 came in at 62.69%.

Silicon Valley 35

Silicon Valley San Jose Valuation Finance 35

Steve Blank

MARCH 18, 2011

The signals are loud and clear : seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble. With Netscape’s IPO , there was suddenly a public market for companies with limited revenue and no profit. Carpe Diem. Breathtaking Scale.

Internet 334

Internet IPO Silicon Valley Agile 334

crowdSPRING Blog

NOVEMBER 1, 2013

The Pricing Model That Increased Our Free Trial Signups by 358% (and Revenue by 25%) – crowdspring.co/1alarDV. Why the Midwest is better for startups than saturated Silicon Valley | VentureBeat - crowdspring.co/1akquBC. But a nearly $4 billion valuation? Perfect employees don’t exist. Nuts - crowdspring.co/1akpXj7.

Social Media 94

Social Media Small Business Design Media 94

Both Sides of the Table

MAY 14, 2015

THIS is how absurd things have gotten: “I have to raise at a billion-dollar valuation” “Why? You don’t have the revenue or profit to support that valuation.” Can it be that Silicon Valley (the HBO show) isn’t farcical enough? That is how absurd thing have gotten.

Valuation 150

Valuation Silicon Valley Non-Compete Software 150

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. million in revenue. The business is already profitable with $2.9

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Venture Chronicles

MAY 26, 2010

Back in March, Ben Horowitz of Andreessen Horowitz wrote a post called The Case For The Fat Startup, where he outlined some of the reasons why a fledging company might want to consider taking a large amount of funding — a strategy that contrasts with the ‘lean startup’ model that has become common in Silicon Valley.

Lean 40

Lean Early Stage Valuation Startup 40