Both Sides of the Table

MARCH 25, 2016

Many startup businesses – tech or otherwise – fail. Trying outrageous new things or even trying mundane things but in new ways but with extreme quality & innovation is what fuels the tech startup industry. And there’s this other thing called “gross margin,” which shows the quality of your revenue.

Startup 150

Startup Seed Money DC Software Review 150

Both Sides of the Table

APRIL 26, 2016

There has been a lot of public debate over the past several weeks about whether it’s a good thing to be “gross margin positive” or not and commentary always reminds me that some people at startups don’t quite understand financial metrics or even how to think about which ones are healthy. I’m guessing much of this was 101 to many readers.

Metrics 150

Metrics Cost Acquisition Startup 150

Both Sides of the Table

JULY 6, 2016

I even prefer to fund entrepreneurs who have experience some level of set-backs in their careers or startups because I think it brings a humility to decision-making that I find healthy. I talk about failure a lot because I think it can be tremendously instructive and I think that success without failure often masks underlying lessons.

South Korea 261

South Korea Silicon Valley Los Angeles Japan 261

Both Sides of the Table

APRIL 4, 2011

It’s a very important concept for me because in a startup you are constantly under pressure and have way too many distractions. Commitment & urgency are key drivers of success in startup businesses. I was recently talking with a startup company who wanted me to try their product. Revenue Metrics. On measurement.

Metrics 346

Metrics Startup Acquisition SEM 346

Both Sides of the Table

SEPTEMBER 17, 2011

I recently wrote a post about why I didn’t think early-stage startups should have COOs. What a luxury in a startup to have the number one person in the business get to focus on just strategy? I expected it to be controversial and it was. I’ve had several COOs at companies in which I’ve invested. I find them strange.

Operations 292

Operations CTO Hire Startup Early Stage 292

Both Sides of the Table

SEPTEMBER 13, 2011

It’s very common for startup companies to have COO’s. But … Startups don’t need – shouldn’t have – COOs. I have this conversation with every startup that comes to see me and has a CEO & a COO. I think usually a COO title at a startup is an ego thing. CEO’s run things.

Technical Review 325

Technical Review Startup Cofounder Due Diligence 325

Both Sides of the Table

JULY 13, 2013

One of my favorite events last year was attending Startup Grind where I got to interview Clayton Christensen, author of The Innovator’s Dilemma. And of course we talked about many of my views of building startups. You didn’t join startups then. You joined a startup if you couldn’t get a real job.

Cofounder 337

Cofounder Technical Cofounder San Diego Startup 337

Both Sides of the Table

MARCH 21, 2013

I recently wrote a blog post in which I pointed out that many investors & advisors discourage enterprise startups from having a professional services (PS) business and I think this is a big mistake. I think it’s important for enterprise startups to layer in professional services into your revenue stream.

Software Review 321

Software Review Software IP Technical Review 321

Both Sides of the Table

SEPTEMBER 15, 2022

At our mid-year offsite our partnership at Upfront Ventures was discussing what the future of venture capital and the startup ecosystem looked like. Should SaaS companies trade at a 24x Enterprise Value (EV) to Next Twelve Month (NTM) Revenue multiple as they did in November 2021? And it WILL be deployed, that’s what investors do.

Technical Review 416

Technical Review Pre-Money Valuation San Francisco Valuation 416

Both Sides of the Table

NOVEMBER 16, 2014

One of the vivid memories I have from being a startup CEO is the feeling that most people in your company have a look in their eyes that like they can do your job as well as you. But if you level up , raise capital and grow customers, revenue and staff – life changes. Startup life. How hard could it be? What do you do?

CTO Hire 385

CTO Hire Entrepreneur Technical Review Leadership 385

Both Sides of the Table

MARCH 17, 2011

When you hire somebody too early who has already “done it” you often find somebody that is less motivated in tough times, less willing to be scrappy (as many startups need to be), more “needy” and less mentally flexible / willing to change their way of thinking. I might be grooming them for when I have more money or more revenue.

Hiring 399

Hiring Startup Global Revenue 399

Both Sides of the Table

APRIL 20, 2017

So how did a company that provides storage grow so fast (we’ll exit 2017 with 10’s of millions in recurring revenue), why is it so defensible and is it really a tech startup? If you buy that Amazon is a tech startup then essentially you’ve already answered the question. In short — how the hell did we raise $30 million?

Technical Review 268

Technical Review Los Angeles Software Review Artificial Inteligence 268

Both Sides of the Table

JUNE 5, 2011

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. That’s the deal you get when you’re raising in a good market for startup financing.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

SEPTEMBER 17, 2013

The main thrust of the post is that with YouTube taking a 45% of revenue and talent taking 70% of the remaining revenue, YouTube Networks didn’t have sustainable businesses unless they invested heavily in technology as a tool to increase margin and provide defensibility. Yet many of the startups I see are very US centric.

Video 339

Video Technical Review Distribution Aggregator 339

Both Sides of the Table

JUNE 28, 2018

While this reaction to such a valuation is understandable, to anybody who has seen the meteoric rise in consumer demand and actual revenue the valuation is much less surprising and may turn out to be quite conservative. I think it’s quite possible that Bird could be the fastest growing company to reach a billion dollars in run rate revenue.

San Francisco 256

San Francisco Valuation Technical Review Los Angeles 256

Both Sides of the Table

MAY 27, 2013

In his tenure as CEO of DataSift we have never missed a monthly revenue figure. He has grown our US operations from 1 employee (him) to a global organization of 75 employees that will finish the year with 8-digit revenues (90+% recurring) and more than 350% year-over-year growth. Startup Advice'

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Both Sides of the Table

MAY 20, 2020

It was only about 10–15% of their actual total revenue per month so for many it wasn’t a battle worth fighting?—?they At Upfront we always took the approach that we wanted to back startups that enabled merchants to own the customer relationship and to increase profits by becoming excellent at marketing and serving ones most loyal customers.

Technical Review 242

Technical Review Software Review Australia Aggregator 242

Both Sides of the Table

NOVEMBER 3, 2009

This is part of my ongoing series of posts and I need to file this one under both Raising Venture Capital and Startup Advice. The last couple of years has also seen the huge initial success of Ycombinator, the Lean Startup and many other product driven approaches to going to market. Let’s take your revenue line.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Both Sides of the Table

JUNE 17, 2017

There are certain topics that even some of the smartest people I talk with who aren’t startup oriented can’t fully grok. It’s common cocktail party chatter to hear people confidently pronounce that some well known startup is sure to blow up because, “How could they succeed when they’re not even profitable!”

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Both Sides of the Table

OCTOBER 1, 2009

Consumer spending is 70% of the economy and will continue to be stretched – We can look all we want at tech innovation, VC funding cycles and hot M&A deals, but ultimately growth and therefore investment must be underpinned by revenue. Tags: Pitching VCs Start-up Advice VC Industry startup technology vc venture capital.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

Both Sides of the Table

APRIL 20, 2010

I recently did a post for startups on understanding sales people. A few people have asked me to try and define the perfect startup organization chart. But I do have more insight into understanding your startup team. Often I’m asked by startup CEO’s about how to best build an engineering team.

Fractional CTO 400

Fractional CTO CTO Hire Fractional VPE Part-Time VPE 400

Both Sides of the Table

AUGUST 8, 2009

Your friends and advisers tell you that this means you need revenue because in this economy VC’s will only fund businesses with revenue. So if it’s not necessarily revenue that’s preventing an investment, then WTF is traction? Tags: Pitching VCs Start-up Advice startup technology vc venture capital.

Technical Review 309

Technical Review Term Sheet Venture Capital Revenue 309

Both Sides of the Table

JULY 16, 2010

Revenue must come from a primary source (as opposed to advertising or other third party sources). Importantly, what does this all mean for startups? As I argue in the same video above – startups are better off by the “right sizing&# of the VC industry. He has a set of clearly defined criteria in order to invest.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JUNE 19, 2017

Gross burn is your cost base and net burn is the difference between your revenue and costs. How Much Capital You Have Raised / Your Runway In general I recommend that in early-stage startups you try to raise at least 15-18 months of runway. If your revenue grows you can afford to increase your cost base.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Both Sides of the Table

AUGUST 11, 2021

Photo by Vanna Phon on Unsplash Customer acquisition is the lifeblood of many startups from e-commerce to gaming to marketplace companies, among others. Most of these startups spend the lion’s share of their marketing budget in today’s social media channels: Facebook, Twitter, Reddit, Snap, TikTok and so on because?—?no no surprise?—?that’s

Founder 424

Founder Product Cofounder Acquisition 424

Both Sides of the Table

MAY 19, 2013

My internal compass has always steered me strongly toward the belief that founders who can scale with their startup companies are better to back that founders who eventually need to hire a CEO. Jonathan Strauss took this issue head on in a blog post that I believe every startup founder should read on “ Replacing Oneself as CEO.”

Technical Review 303

Technical Review Cofounder Analytics Founder 303

Both Sides of the Table

MAY 28, 2018

There are many things a VC is looking for in reviewing your business plan but beyond things the like the quality of revenue, margins, OPEX and CAPEX there’s a really simple rule I call, “Cash In, Cash Out, Milestones Achieved.” Conversely many VCs believe that constraining cash can often lead to increases in creative solutions at a startup.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

FEBRUARY 15, 2016

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. There are two other factors you may consider. One is how reasonable your last round valuation was.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

JUNE 18, 2015

I rarely talk to any startup entrepreneur or VC who doesn’t feel it and somehow long for simpler times despite the benefits we all enjoy from increased enthusiasm for our sector. And even this can’t stop their employees from fleeing after two years of vesting to move on to the next hot startup. Easier said than done.

Software Review 150

Software Review Turkey Portfolio Syndicate 150

Both Sides of the Table

SEPTEMBER 28, 2013

So as a startup CEO you constantly have to suspend disbelief. ” A startup CEO’s job is to absorb stress so the team doesn’t have to. Startups have to be optimists because no rational person would actually believe you could build Uber into the amazing company that it is today. We just need your $500,000!!”

Startup 417

Startup Dilution San Diego Stock Options 417

Both Sides of the Table

NOVEMBER 9, 2012

Startup Exits: A Primer from msuster. I speak privately a lot about getting an exit at a startup. We also are going to talk a lot about startups getting exits and ultimately: Companies are bought, not sold. You need to understand motives of buyer (talent, product, revenue, strategic purchase) and where you fit in.

Technology 323

Technology PR Startup IPO 323

Both Sides of the Table

JANUARY 6, 2014

Over time you start to figure out who you customers are and how to sell to them or how to get them to adopt your products if you’re a consumer-oriented startup. And I’ve also been convinced that it can be quite useful to have another startup company CEO on your board. Startup Advice' As You Start to Mature.

Technical Review 325

Technical Review Early Stage Software Review Los Angeles 325

Both Sides of the Table

FEBRUARY 9, 2013

My partner Steven Dietz is an expert on cars (and auto startups having funded DealerTrack , TrueCar , Digital Airstrike , Uparts and others) and I called him and he said, “Decline everything. The people who really are working hard at their startups with no money to pay real salaries and sharing a cramped office. ” Anyway.

Software Review 398

Software Review Technical Review China Mexico 398

Both Sides of the Table

OCTOBER 11, 2016

We then help surround founders with other talent who want to join important causes but don’t have the startup idea themselves. It’s rare to find extraordinarily talented individuals who are natural leaders and who are driven to succeed and who have a passion for startups so when you do you work hard to find opportunities for them.

Venture Capital 150

Venture Capital Fractional CTO Cofounder Early Stage 150

Both Sides of the Table

JANUARY 11, 2014

The father of “Growth Hacking” appears to be Sean Ellis who wrote this widely read post, “ Find a Growth Hacker for your Startup. For starters it brings a mindset to startups that not all of them have innately. If your startup isn’t committed to growth hacking you’ll never find extra-ordinary growth.

Technical Review 384

Technical Review Hockey Stick SEM Channel 384

Both Sides of the Table

APRIL 18, 2019

The company started the year with no revenue and at it’s peak had a run rate well in excessive of $100 million / year. We’re at a new watermark because there are now global assets deployed and as the sun peeks out so to do the riders and the revenue. They were new, they were strange, they were ridden mostly by young people?—?they

South America 250

South America Global New York City Software Review 250

Both Sides of the Table

JANUARY 26, 2013

Understanding “The Funding Angle” I sit at enough board meetings to hear conflicting advice given to entrepreneurs about how to handle PR and announcements at startups. When many of us advisors / investors did our first startups there were very few purely tech media outlets. Should I Bundle it With More Juicy News?

Startup 355

Startup PR Dividend Merger 355