Startup Professionals Musings

JUNE 25, 2012

Just don’t quit your day job before your new company is producing revenue. If you don't know any “high net worth” individuals, use your advisors to find them. Venture capital. An investment from a venture capital firm is usually expensive, in equity and control. Friends and family.

Technical Review 257

Technical Review Bootstrapping Venture Capital Incubator 257

Startup Professionals Musings

DECEMBER 2, 2022

The most common failures are solutions looking for a problem, lack of a defined market, or an inadequate revenue model. The value proposition must clearly define the target customer, the customer’s problem and pain, your unique solution, and the net benefit of this solution from the customer's perspective. Revenue model.

Business Model 256

Business Model Distribution Viral Green 256

Startup Professionals Musings

MARCH 16, 2011

Just don’t quit your day job before your new company is producing revenue. If you don't know any “high net worth” individuals, use your advisors to find them. Venture capital. An investment from a venture capital firm is usually expensive, in equity and control. Friends and family.

Technical Review 233

Technical Review Bootstrapping Startup Venture Capital 233

Startup Professionals Musings

JANUARY 27, 2021

Most entrepreneurs have found by now one or more of the many popular crowdfunding sites , and have the name and contact information for at least one of the big venture capital firms. Each has met legal securities minimums for net worth and professionalism, to reduce the risk to entrepreneurs.

Search 317

Search Accredited Investor Angel Investor Venture Capital 317

Up and Running

JUNE 23, 2022

Pre-Tax Return on Net Worth. This ratio is not applicable if the subject company’s net worth for the period being analyzed has a negative value. As mentioned before, angel investment and venture capital, and even peer-to-peer lending are also great options. Pre-Tax Return on Assets.

SBA 163

SBA Finance Balance Sheet Technical Review 163

Gust

JUNE 17, 2012

Just don’t quit your day job before your new company is producing revenue. If you don’t know any “high net worth” individuals, use your advisors to find them. Venture capital. An investment from a venture capital firm is usually expensive, in equity and control. Friends and family.

Technical Review 164

Technical Review Bootstrapping Venture Capital Incubator 164

Feld Thoughts

JANUARY 2, 2014

When people ask me how they can become a VC, I point them to my partner Seth Levine’s excellent blog posts How to become a venture capitalist and How to get a job in venture capital (revisited). The post My First Experience As A Venture Capitalist appeared first on Feld Thoughts. An accidental one.

San Francisco 159

San Francisco Boston Venture Capital Angel Investor 159

David Teten

NOVEMBER 26, 2019

Howell, Professor of Business Administration at Tuck, writes that you should turn your budgeting process upside down by “reformat[ting] planning and budgeting templates to highlight cash rather than accounting net income.”. Disclosure: Graphite Financial is a spinoff of ff Venture Capital , where I was formerly a Partner.

Agile 60

Agile Management Forecast Silicon Valley 60

Startup Professionals Musings

MARCH 1, 2010

Just don’t quit your day job before your new company is producing revenue. If you don't know any “high net worth” individuals, use your advisors to find them. Venture capital. An investment from a venture capital firm is usually expensive, in equity and control. Friends and family.

Technical Review 149

Technical Review Bootstrapping Startup Venture Capital 149

This is going to be BIG.

JULY 8, 2013

I probably get around a dozen e-mails a week asking me how to get into venture capital. On top of that, anytime I talk to anyone who wants to get involved in startups but isn''t sure what they want to do, inevitably, I hear, "And then I was thinking maybe I should look into venture capital, too.". Know thy self.

Venture Capital 167

Venture Capital Early Stage Portfolio Private Equity 167

David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. But should they? Aligned incentives.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Both Sides of the Table

JUNE 19, 2017

The Basics The starting point — the 101 — is knowing the difference between gross burn and net burn. Gross burn is your cost base and net burn is the difference between your revenue and costs. GAAP Net Income, which at times isn’t a good reflection of cash burn). You start from the basics, which is if you raise $2.5

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

VC Cafe

NOVEMBER 30, 2022

Together, we mapped 89 companies, that collectively raised over £2 billion in venture capital across consumer experiences, enabling technologies and infrastructure. billion in revenue in 2022. The pandemic was generally viewed to have been a net positive for the industry. UK XR startups generated over $1.4

Startup 122

Startup Generative AI Venture Capital Valuation 122

Steve Blank

MARCH 31, 2014

As the venture capital business has come roaring back in the last 5 years, startups are awash in available capital. Companies horde cash and squeeze the most revenue and margin from the money they use. Instead of measuring success in dollars of profit, …firms focus on measuring capital efficiency.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

David Teten

DECEMBER 16, 2015

The most common financial metrics ffVC asks companies to compare vs. budget are: Gross Revenue. Net Income (Loss). Monthly Recurring Revenue (MRR). Net MRR Churn %. Average Revenue Per Account. ff Venture Capital portfolio company. So how do you do it? Identify the metrics that matter. Gross Profit.

Metrics 60

Metrics Analytics Balance Sheet .Net 60

Both Sides of the Table

JUNE 17, 2017

70–80% of the costs of most startups are employee costs so what you’re really talking about when a company is unprofitable is that they are growing their staff ahead of their revenue. Revenue When I look at an income statement I start by focusing on the revenue line. You need to understand the “quality” of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Austin Startup

MAY 10, 2021

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. For context, UiPath’s revenue last year was reported at $607 million and grew 81% over the prior year?—?so

Silicon Valley 113

Silicon Valley IPO Venture Capital Valuation 113

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. The Valley has obsessed with a quick up-and-to-right momentum story because we were thought to live in “winner take most” markets.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Berkonomics

AUGUST 3, 2023

However, most often, these funds are solicited by a well-meaning entrepreneur from investors who are not qualified as accredited investors under the law (currently requiring a proved income of $200,000 a year or $1 million in net worth for an individual investor). Professional angels: This is the arena where I work and play.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Both Sides of the Table

JULY 16, 2010

LP’s who invest in funds are typically university endowments, public & private pension funds, insurance companies, large corporations and very high net worth individuals called “family offices.&# To give you an indication of how bad, for example, university endowments are suffering check out this chart.

LP 311

LP Technical Review Early Stage Silicon Valley 311

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. If you bill for your technology services on a percentage of ad spend, you are guaranteed to look like an agency that deserves a revenue multiple of 1–2X.

Technical Review 48

Technical Review Software Review Nevada Silicon Valley 48

Austin Startup

MAY 22, 2020

I pointed out to their pitchman that they had lower unit revenue and far higher unit cost than their competitors. Blitzscaling is taking in large amounts of venture capital for massive customer acquisition growth in a short period of time. In short, the net profit selling each unit accrues faster than your expenses.

Venture Capital 99

Venture Capital Acquisition Valuation .Net 99

Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. All your assumptions about customers, sales cycle and most importantly, revenue, burn rate and runway are no longer true.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Gust

NOVEMBER 15, 2011

The Risk Factor Summation Method the fifth methodology for estimating the pre-money valuation of pre-revenue companies we have described in recent posts. The Risk Factor Summation Method, described by the Ohio TechAngels, considers a much broader set of factors in determining the pre-money valuation of pre-revenue companies.

Valuation 102

Valuation Pre-Money Valuation Ohio Early Stage 102

Austin Startup

NOVEMBER 6, 2017

The main drivers, from our viewpoint, are: Many tech entrepreneurs no longer view venture capital as an inevitability in their growth path, and have grown skeptical of the traditional “growth at all costs” mindset found in many startup circles; and An increasing number of VCs are growing comfortable with LLCs.

Delaware 48

Delaware LLC Startup Silicon Valley 48

The Next Web

FEBRUARY 27, 2014

As an example, a new restaurant may get valued at 3-4x EBITDA (earnings before interest, taxes, depreciation, and amortization) and a hot dot com business with meteoric traffic growth could get valued at 5-10x revenues. revenue, cash flow or net income multiples from recent M&A transactions in your industry.

Valuation 167

Valuation Forecast Seed Stage .Net 167

David Teten

AUGUST 6, 2015

My colleague Paul Bianco serves as interim CFO for a number of ff Venture Capital ’s portfolio companies, and has built and reviewed hundreds of financial models. A more mature organization may project future revenues based on their actual sales pipeline, with a probability adjusted percentage based on stage.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Version One Ventures

JULY 22, 2014

First, there will be a consolidation in the accelerator space, with the net effect of reducing the number of available spaces for start-ups. You need to assess early on if your business is venture-fundable. If not, revenue from your customers will be your best source of financing. Is your opportunity at least $100M?

Finance 167

Finance Seed Money Bootstrapping Angel Investor 167

David Teten

JANUARY 28, 2019

My former Partner John Frankel of ff Venture Capital observes that 20 years ago, the defining movie of the generation was “Wall Street”. These will inevitably have tighter ties with the university than the private, for-profit similar initiatives, e.g., those backed by Alumni Ventures Group. “CEO is the new Analyst.”.

Affiliate 60

Affiliate Connecticut Programming Community 60

Both Sides of the Table

MAY 4, 2010

We discussed whether investing in the second largest player in a category makes sense given that Groupon is 10x the revenue, 3.5x But LivingSocial is reportedly doing around $180,000 per day in gross revenue. If this figure is accurate – it’s certainly a very large business even when you look at net revenues.

IPO 236

IPO .Net Venture Capital Strategic Investors 236

Cracking the Code

JANUARY 22, 2009

While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3% of Year One Revenue Sounds high, but is that considered a reasonable package?

Software Review 91

Software Review Clawback Sales Salary 91

Startup Professionals Musings

FEBRUARY 16, 2015

Most entrepreneurs have found by now one or more of the many popular crowdfunding sites , and have the name and contact information for at least one of the big venture capital firms. Each has met legal securities minimums for net worth and professionalism, to reduce the risk to entrepreneurs.

Angel Investor 120

Angel Investor Accredited Investor Venture Capital Startup 120

Startup Professionals Musings

MAY 14, 2012

There are dozens of sources to help you construct your business model, and a good example is a recent book by venture capital investor Elizabeth Edwards, simply named “ Startup ,” which is really designed as a handbook for launching a company for less. Revenue model. What is the need you fill or problem you solve? Target market.

Business Model 242

Business Model Distribution Viral Green 242

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. Intel under their last two CEOs delivered more revenue and profit than any ever before. Risk capital has provided financing for new ideas in the form of startups.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Startup Professionals Musings

JANUARY 29, 2011

There are dozens of sources to help you construct your business model, and a good example is a recent book by venture capital investor Elizabeth Edwards, simply named “ Startup ,” which is really designed as a handbook for launching a company for less. Revenue model. What is the need you fill or problem you solve? Target market.

Business Model 246

Business Model Distribution Viral Green 246

This is going to be BIG.

FEBRUARY 17, 2020

7) Does such a model get you to a long term size that makes sense for venture capital investors (north of $100mm in revenues)? I don’t know the answer to that—but I know a lot of people have been spending a ton of time on things that I think at best would only net them 2-3 points. (Because no one is going to fund a fix.)

Startup 110

Startup Viral Venture Capital .Net 110

abovethecrowd.com

NOVEMBER 13, 2012

Wow” moments lead to word-of-mouth viral growth and high net promoter scores. The supplier not only looks to you as a provider of revenue, but they receive that revenue “net of the fee.” When this experience delta is great enough, it creates “wow” moments for new users. Economic Advantages vs. the Status Quo.

Aggregator 101

Aggregator Marketing Software Review North America 101