Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. Unprecedented revenue growth + companies staying private longer =. Where are we today? .” Lots of new entrants moving to capture this value =.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Both Sides of the Table

MARCH 21, 2013

I think it’s important for enterprise startups to layer in professional services into your revenue stream. deliver profitable revenue that while on gross margins of 50% vs. software at 85-95% it is still profits to help you cover fixed costs. Control Size of PS Revenue Relative to Software Business. rollout support.

Software Review 321

Software Review Software IP Technical Review 321

Both Sides of the Table

APRIL 18, 2019

The valuations were too high! 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. We are now in Act IV. they were highly visible.

South America 250

South America Global New York City Software Review 250

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. And for some that means that despite waiting they may see worse valuations in the future than now.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

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. Should VC’s really be impacted by public market valuations when the money that they’re investing today should be for returns in 7-10 years? Short answer – yes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

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. 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.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Both Sides of the Table

MARCH 1, 2016

LPs See The Over-Valuations and Don’t Like It. LPs have followed the recent press about the over-valuation and over-funding of the startup industry, and they experience these phenomena first hand. All isn’t completely rosy in the LP views of the venture industry. The Biggest Area of Concern is Late Stage Investments.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Both Sides of the Table

NOVEMBER 14, 2017

Throughout the first year we made many fixes and saw our revenue base in these markets accelerate so we felt we were ready to attack Los Angeles, amongst the most important storage markets in the country. An example of the systems companies build are pricing & revenue management tools to best help to optimize yield.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

APRIL 26, 2016

In SaaS (or any recurring revenue business) this is also a very difficult task. One big, beginners mistake people make in LTV is to measure revenue. If your economic case is built on increasing LTV over time or on retaining recurring revenue streams please remember to layer on “re-marketing or retention” costs into your equation.

Metrics 150

Metrics Cost Acquisition Startup 150

Both Sides of the Table

JULY 6, 2016

It is these stories that helps me bond more with the team because I’ve personally experienced just about every kind of setback at my first startup: Raising too much capital, too quickly & at too high of valuations Hiring too quickly and too senior Building too much functionality before market validation Charging too much, keeping prices too high (..)

South Korea 261

South Korea Silicon Valley Los Angeles Japan 261

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

FEBRUARY 16, 2017

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. We feel very proud about the success of Ring and our investment in Jamie Siminoff who is amongst the most talented tech leaders in LA or the country.

IPO 214

IPO Los Angeles Technical Review Silicon Valley 214

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

Both Sides of the Table

JULY 16, 2013

It goes like this, “If your next round investor can see how fast you’re scaling then you can raise money based on your user traction and your valuation can hit the sky. The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Both Sides of the Table

APRIL 14, 2012

Did raising money at a $500 million valuation help secure the $1 billion deal? “it’s smart to use an impending investment valuation to drive a higher acquisition valuation” I would like to amend her statement slightly to read, “it’s smart to use an impending investment valuation to drive an higher acquisition.”

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Both Sides of the Table

NOVEMBER 28, 2013

In the market we’ve seen the massive uptick of SaaS valuations in the public markets and commensurate attention on private market fundings and valuations. He joined when we were a small team with no revenue and shitty offices. eCommerce was battered this year. Thank you especially to Jason & Eric.

Valuation 288

Valuation eCommerce Revenue Social Network 288

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 talk about valuation 13. Let me give you an example. the most counter-intuitive fund-raising advice you’ll get 8. Confidence sells 10.

Revenue 236

Revenue Valuation Portfolio Restful 236

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. This has a tangible impact on the valuation of start-ups and the pace of investment.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

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. If your revenue grows you can afford to increase your cost base. Sometimes it means spending less on marketing or not adding new bodies so that revenue can catch up with expenses and thus reduce burn through revenue growth.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

NOVEMBER 9, 2009

But they didn’t have any revenue or enough traction to show for it. So we know that our valuation will be lower than others who would have already raised $4 million.&# He then went on to describe a phenomenal set of biz dev partnerships that they had signed and showed me a very cool product.

Venture Capital 264

Venture Capital Due Diligence Flash Strategic Investors 264

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.” Entrepreneurs literally started asking for billion-dollar valuations just because the market is talking about unicorns.

Valuation 150

Valuation Silicon Valley Non-Compete Software 150

Both Sides of the Table

SEPTEMBER 1, 2016

Scott Kupor of A16Z responded with a comprehensive overview of valuation methodology in a post that while accurate feels more targeted at sophisticated Limited Partners (LPs) who invest in funds. If a company has significant revenue you might value it based on some industry multiples but WhatsApp had very limited revenue.

LP 264

LP Jordan Cofounder Limited Partner 264

Both Sides of the Table

SEPTEMBER 28, 2013

Sure, our revenue is growing, but is that enough to raise an internal round? Dilution / valuation. I hate when companies publish too much information about the total stock option allocations, the company valuations, the dilution faced in every round, etc. .” “Buy a house? Are you kidding me?

Startup 417

Startup Dilution San Diego Stock Options 417

Both Sides of the Table

JULY 1, 2015

Startup companies continue to grow at unprecedented rates, raise enormous amounts of venture capital and achieve valuations that imply that they will continue to grow rapidly for the foreseeable future. I see another breed of startups who are dependent on startups for the majority of their revenue. We live in heady times.

Balance Sheet 150

Balance Sheet eCommerce Venture Capital Acquisition 150

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. Ventro was trading at $8 billion on sub $2 million of revenue. OK, you would own 0.25% of the stock. They raised $5 million in their B round.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Both Sides of the Table

APRIL 14, 2010

It’s frustrating because you did $4 million in revenue last year and have a $7 million run rate for this year and you’re struggling to get financed for even $5 million while other startups are out there with no revenue raising $10 million at a $40 million pre money valuation! But pass they will. Brain damage.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

JULY 17, 2018

" Revenue doesn't pay your bills, GM does  —  @msuster 2/ Founders obsess with revenue as a vanity metric. Some even grow "bad" revenue just to show growth. But if you want to add some in the comments section on Medium and I’ll make sure to read them.

Founder 242

Founder Dilution Software Review Later Stage 242

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. The opportunity to transact at the point of purchase increases the sheer number of revenue opportunities. Web businesses can now grow revenue before they can even afford sales people.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Be realistic on valuation. So here’s my take away. In my mind this simply means.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

Both Sides of the Table

MAY 24, 2021

It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales. Case in point, Procore just went public and is trading at an $11 billion valuation. Instagram selling to Facebook. Maker Studios?—?sold

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Both Sides of the Table

MARCH 11, 2010

I know the standard line, “I want to do a small round now and raise a larger round later when we get A,B,C deal done and I can raise at a higher valuation.&# If it works you’re a hero. Your revenue will take longer to ramp then you think. I’ve seen too many entrepreneurs try to do things on the cheap. add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Both Sides of the Table

APRIL 25, 2011

A great recent example of this was a successful group of entrepreneurs who had created a company that will do $10-12 million in revenue at their system integration business (read: services business) in 2011 after having done $5 million or so in 2010 and $2-3 million in 2009. Why Shouldn’t Service Businesses Become Product Businesses?

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

MARCH 1, 2011

Around 2003, Quigo was doing tens of millions of dollars in revenue with two main products: a ready-to-use, search engine marketing solution for advertisers called FeedPoint and a contextual advertising platform for publishers called AdSonar. Quigo Lands Overture as Client, Rejects Their Acquisition Offer. Contest details here :

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. Morgan Stanley had proposed a higher valuation to let them in. If it’s a biz deal you might care about IP protection, revenue share, investment commitments to joint marketing – whatever. million at a $15 million pre-money valuation. We ended up agreeing a term sheet for $16.5

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Both Sides of the Table

DECEMBER 9, 2013

Deal with company admin: 409a valuations, approve stock options, vote on key measures (15%). should we charge SaaS revenue, ad revenue or volumetric billing revenue? should we cut staff early since our revenue isn’t growing? Provide information / context (15%). Ineffecient Board Meeting.

Advisory Board 337

Advisory Board Valuation Stock Options Seed Money 337