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. The deal was done in late 2007.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

APRIL 26, 2016

profitable and companies like Amazon who chose to focus on growth > profitability were not losing money on each book sale (ie they were gross margin positive). But often this doesn’t tell the whole story because often companies are also spending money on PR and other marketing activities in order to support the sales process.

Metrics 150

Metrics Cost Acquisition Startup 150

Both Sides of the Table

JANUARY 22, 2014

Of course it is super helpful if a VC can drop you in to important people for business development, recruiting, PR, sales and eventually M&A. To be clear – I’m not saying huge successes make a VC less likely to be helpful to you – I’m just saying it’s not a guaranteed predictor. Connections?

Portfolio 364

Portfolio Chicago Sales Incubator 364

Both Sides of the Table

OCTOBER 11, 2009

But if you approach them with a very fair valuation and ask for a small check (say $10k, which should be nothing to someone in this position) I believe you’ll have a reasonable shot at it provided that you actually have an interesting company. At a $2 million valuation this is 0.5% of the company – about right.

Advisory Board 306

Advisory Board Startup Equity Valuation 306

Both Sides of the Table

AUGUST 14, 2009

There are more sales oriented tools like JigSaw that tech savvy people hate but sales savvy people love. If you’re three s -hot kids from Stanford, Caltech or MIT you might be able to push valuation higher. Your angels are happy when you do the VC round because it is a “step up&# in valuation if possible.

Silicon Valley 291

Silicon Valley Ireland Technical Review Valuation 291

Both Sides of the Table

AUGUST 14, 2017

The administrative work we actually do at board meetings?

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

NOVEMBER 9, 2009

I was looking for a person to head up my UK sales team. But he also used to opportunity to emphasize that he is full of stamina, works late and hard and had always performed well in his previous sales leadership roles for which he’s be happy to provide pay slips as proof. One of the people who came to see me was named Nick.

Venture Capital 264

Venture Capital Due Diligence Flash Strategic Investors 264

Both Sides of the Table

NOVEMBER 14, 2017

It wasn’t just front-end processes like sales tools, marketing funnels, dynamic pricing, driver routes and so forth but we also had to build comprehensive systems to manage numerous warehouses across four different cities. Summary Startups are fun and exhilarating and filled with challenging problems to solve.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

MAY 19, 2010

The “private sale” market phenomenon was started in France by Vente-Privee (literally means “private sale”) and was replicated in Germany by BrandsforFriends. Gilt Group is currently the largest private sale web site in US. To be fair to Ben Horowitz – I think he thinks this as well. Time will tell.

Partner 240

Partner New York City Cofounder Syndicate 240

Both Sides of the Table

JULY 25, 2010

Because I built two SaaS companies and sold my second one to Salesforce.com (where I then took on the role of VP Products) I am often asked to look at SaaS and/or sales-oriented deals for others.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

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

SEPTEMBER 6, 2010

We set our sites on our IPO price and then worked back to our current valuation and showed potential employees what we thought they could earn (with all legal caveats) if the company was successful. If Ventro was worth $8 billion on $2 million of sales surely a paltry $1 billion would suffice. rounds and still be competitive.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Both Sides of the Table

MARCH 6, 2010

I have no quarterly sales targets for the first time in a decade – For anybody who’s ever been in a company with sales targets you can attest to what a fire drill the ends of March, June, September and December can be. But let’s face it, as a VC you spend time with whichever companies you want. Not any more for me.

Technical Review 312

Technical Review Due Diligence Spain Warrant 312

Both Sides of the Table

FEBRUARY 17, 2011

A year ago I blogged about one of my most common mantras that applies to sales, biz dev & fund raising alike: “ Time is the Enemy of all Deals.&#. When times are really good for fund raising many teams delay to maximize their valuation. 5 million raised at a $9 million pre-money valuation or 35.7% 25% dilution).

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

MARCH 2, 2011

And look at the valuation creep across the board in the past year. I like customer service but I also need to do sales, marketing, finance & operations. Whatever the situation is – it’s now clear that even if they WANTED to collude they couldn’t. They don’t have market power.

Email 287

Email Bankruptcy Equity Technical Review 287

Both Sides of the Table

JUNE 19, 2017

That is, how much should your company be willing to lose in cash every month as you make investments in staff and equipment that funds technology, sales, marketing and management. One of the hardest decisions entrepreneurs make when they start a company and raise outside capital is figuring out what an acceptable “burn rate” is.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Both Sides of the Table

MAY 6, 2018

“I know that our repeat purchase rate is lower than the industry average now, but …” “I know that our margins are lower than VCs like to see, but …” “I know our revenue decelerated in the last 2 quarters of 2017, but …” Remember that fund raising is a sales process. How to talk about valuation 13. Why “no” is ok in fund raising 9.

Revenue 236

Revenue Valuation Portfolio Restful 236

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. I understand the logic. The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.”

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

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. Rolf Winkler wrote a piece in the WSJ about A16Z’s returns in which he says they “lag behind Sequoia, Benchmark and Founders Fund.”

LP 264

LP Jordan Cofounder Limited Partner 264

Both Sides of the Table

SEPTEMBER 5, 2012

What the entrepreneurs were really saying is, “I don’t want to take a lower valuation now, while I don’t have customers or a full team. They can occur legitimately in a company whose valuation skyrockets unexpectedly as in, “your last round was at $50 million and you want to raise 9 months later at $750 million.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

JUNE 1, 2011

If you take a snapshot during an extraordinary surge in valuations, M&A activity, IPOs and thus wealth creation you’d echo John Doerr’s famous quote from 1999 that, “The Internet is the greatest legal creation of wealth in history.&# Just like a sales person at the end of a quarter. I did that? Back to zero.

IPO 391

IPO Finance Valuation Naming 391

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

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’m not saying don’t hire sales staff or market your products aggressively. We live in heady times.

Balance Sheet 150

Balance Sheet eCommerce Venture Capital Acquisition 150

Both Sides of the Table

APRIL 25, 2011

Early in a services business there is usually no profits as the company reinvests in hiring people to grow, but by $20 million in sales the company should at least be pulling in 10% profits (if not more) depending on how much is reinvested. Who are your competitors – how much do they charge?&#. It’s pure irony. interest?

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

FEBRUARY 27, 2019

The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. This can include: Fund raising, product development choices, sales, marketing effectiveness, competition, business development, M&A … whatever. The meeting starts. But what are the KEY ISSUES management is grappling with.

Stock Options 226

Stock Options Metrics Stock Valuation 226

Both Sides of the Table

AUGUST 20, 2015

We’ve had just one market since then and it could confuse one into thinking: every deal finds downstream investors, every company good or bad finds a home, you know anything at all about brazil, india, china or even saas sales, ecommerce or analytics (you know all these in a bull market). We’ll see. What do I know about venture?

Churn Rate 150

Churn Rate Silicon Valley Brazil Valuation 150

Both Sides of the Table

OCTOBER 1, 2009

More tellingly was the sale of Mint.com to Intuit for $170+ million because it showed VCs that a well-executed investment can still garner a quick, solid results (the company was sold around 3 years after its foundation). VC’s are working hand-in-glove with the investment bankers to prepare for IPOs or create auction-style trade sales.

IPO 255

IPO Investment Bankers Venture Capital Marketing 255

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

JULY 17, 2018

Be sure you can grow into your valuation by next fund-raising or your last raise could become existential or extremely dilutive  —  @msuster 7/ If you know an employee is a negative energy in the office don't delay parting ways. But if you raise at too high a price you make it harder to raise next round.

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. Mobile devices deliver “bottom of funnel” sales opportunities that deliver real & immediate economic results. Bottom of the sales funnel. Morning in VC.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Both Sides of the Table

OCTOBER 15, 2009

This includes writing product specs, going on sales calls, handling customer complaints, building the financial model and a host of other activities that will ultimately owned by functional experts. I did all of the sales myself. I always encourage young entrepreneurs now to flip burgers for as long as they can.

Founder 299

Founder Technical Review Startup Venture Capital 299

Both Sides of the Table

MAY 23, 2010

.&# This means that the investment does not have a valuation placed on it. If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

MARCH 1, 2011

After rejuvenating from the exhausting sale of Quigo, Mike started a ‘boring site’ called Tracked.com that he thought would be a better version of Yahoo! The secret to the software sales process. With an early, high valuation, eventually you will have to raise extra money because you will need time to grow into your valuation.

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. VC, sales, biz dev, M&A or otherwise. million at a $15 million pre-money valuation. Morgan Stanley had proposed a higher valuation to let them in. VC, sales, biz dev, M&A or otherwise.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Both Sides of the Table

JANUARY 31, 2011

Mostly you read about fundings, product releases, big valuations, and M&A. My SVP of Sales & Marketing quit 30 minutes before an important board meeting. And for ones that do get sold often most of the employees don’t really make huge upside gains. So readers of tech journals gain a bias of the chances of success.

Entrepreneur 384

Entrepreneur Startup Salary Egypt 384

Both Sides of the Table

NOVEMBER 8, 2010

They monetize via high-priced advertisements during the prime-time airing on TV, via syndication to international audiences or less-watched channels after the original series has run and via DVD sales in retail channels. Of course it’s their right to do so and there is so much money involved you can hardly blame them.

Video 292

Video Technical Review Advertising Distribution 292

Both Sides of the Table

OCTOBER 25, 2014

But as I like to tell entrepreneurs, great PR could add $10 million to your valuation or increase your chances of closing a round 2x and either case is a reason to make sure you have good press. Enterprise Sales – The very first thing a potential customer does when you email or call to set up a meeting is Google you.

PR 415

PR Early Stage Dividend Acquisition 415