Revenue Recognition’s Effect On M&A


There has been a lot of chatter regarding changes in revenue recognition criteria lately, but the effects it will have on the evaluation of companies planning an exit is just beginning to emerge. Recognize revenue when performance obligations are met (good(s) or service(s) have been provided).

5 Reasons Startups Need Revenue As Well As Users

Startup Professionals Musings

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $400B. Long-term stability requires revenue growth and profit.

Trending Sources

Corporate Acquisitions of Startups: Why Do They Fail?

Steve Blank

More often than not the results of these acquisitions are disappointing. buy out an entire company for its revenue and profits. The goal is to get a corporate investment or an outright acquisition of the startup. Is the Potential Acquisition Searching or Executing?

Creative ways to scale SMB customer acquisition


The bigger you get, the higher your customer acquisition costs go. Their path to being a public company with $100M of revenue was built through direct mail. Hubspot : Hubspot is a great example of several powerful customer acquisition tactics.

Should Entrepreneurs Grow Revenue Or User Count?

Startup Professionals Musings

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Both have worked.Google reached $1 billion in revenue within five years of incorporation, and now has a market capitalization of over $400 billion.

Notes on the acquisition process

Chris Dixon

Comparatively little, however, has been written about the important transaction at the other end many startups’ life, acquisitions. Here are some things I’ve learned about the acquisition process over the years. But for product and tech acquisitions especially, it is often about getting the attention of the right people at the acquirer. Don’t use a banker unless your company is late stage and you are selling based on a multiple of profits or revenues.

Acquisition success depends on founders

Don Dodge on The Next Big Thing

But, sadly, most acquisitions don't play out as expected. Revenues grow, headcounts grow, loyal customers attract new customers, and momentum propels the startup to new heights. The liquidity event - Acquisition or IPO is the financial reward every startup is working towards.

How To Boost eCommerce Revenues With Upselling


According to Forrester research analyst Sucharita Mulpuru , product recommendations are responsible for an average of 10-30% of eCommerce site revenues. . Way back in 2006, Amazon reported that 35% of it’s revenues were as a direct result of it’s cross sales and upselling efforts.

Snapchat and that old no revenues debate

Fred Destin

Not because of the reported $4 billion offer but because of the explosion of age-old arguments about how scandalous it is for a company with no revenues to be valued that highly. Here''s a selection: "why do investors think a silly app with no clear revenue model is worth so much money?"

Three types of acquisition – view from a public company CEO

The Equity Kicker

At a conference last week Autodesk CEO Carl Bass said that he thinks about acquisitions in three buckets: companies that are really people who have a technology that Autodesk wants to build up (acquihires). large scale acquisitions. He wants to make lots of acquisitions in the first category, a handful in the second, and only rarely in the third. Also very important to note is that the number of acquisitions declines precipitously as the valuation rises.

Startup Killer: the Cost of Customer Acquisition | For Entrepreneurs

In pure web businesses where the headcount doesn’t need to grow as customer acquisition scales, it is also very useful to look customer acquisition costs without the headcount costs.) It appears that LTV should be about 3 x CAC for a viable SaaS or other form of recurring revenue model.

Saas Math: Customer vs. Revenue Churn


As I’ve mentioned many times before: churn (the rate at which customers cancel their subscription) is the most important metric for any recurring revenue business. Revenue churn is revenue you lost from those customers.

Why Facebook Clearly Belongs in the 10X Revenue Club

Brief disclosure, Benchmark Capital has a minority position in Facebook as a result of the acquisition of FriendFeed, a company that was incubated in our offices. Attached are my thoughts on the Facebook S-1 along with some quick stabs at valuation. I thought it would be useful to look at Facebook using the scorecard from our [.]. Facebook Internet IPO Uncategorized Venture Capital Web/Tech

The economic logic behind tech and talent acquisitions

Chris Dixon

Suppose you are a large company generating $1B in revenue, and you have a market cap of $5B. You want to build an important new product that your CTO estimates will increase your revenue 10%. At a 5-1 price-to-revenue ratio, a 10% boost in revenue means a $500M boost in market cap. You therefore need to estimate the cost of delay (delaying the 10% increase in revenue) and failure.

Preparing For An Acquisition


In the current economic landscape, it’s common for startups and businesses to seek a buyout or acquisition — in fact, it’s frequently the goal from the start. Watch out for complex areas such as accounting for revenue, inventory, contingencies, equity instruments and consolidation.

Personalization: How to Build a Revenue Boosting Program from Scratch


Acquisition segments. Acquisition segments. It is about focusing your marketing efforts on a few select companies that could represent huge revenue streams. The post Personalization: How to Build a Revenue Boosting Program from Scratch appeared first on CXL.

FullContact Continues Its Journey To Solve The Contact Management Problem

Feld Thoughts

They followed this up with two acquisitions – first Conspire and then Profoundis. I love using a targeted acquisition approach in conjunction with a business that has a clear strategy and strong organic growth.

How founders get paid: non-strategic acquisitions, dividends, and private islands

The Startup Toolkit

The company becomes valuable and someone buys the whole thing (acquisition). You’re making solid revenue (e.g. 5mm/year) and someone buys you to add that revenue to their portfolio (revenue-based acquisition). all your revenue comes from one big customer).

How we built €20,000 in recurring revenue within 90 days of launch

The Next Web

We launched Ruby & Duke on 15th February and in less than 90 days we have hit €20,000 in monthly recurring revenue so I thought it might be useful to explain how we’ve done that. When I build startups I like to share as much information as possible.

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7 lessons from the Dollar Shave Club Acquisition


revenue. forward revenue in this sale. The post 7 lessons from the Dollar Shave Club Acquisition appeared first on StartupCFO : Mark MacLeod. The big news in the e-commerce World this week is Unilever’s purchase of Dollar Shave Club (DSC) for a cool $1B (cue the Dr. Evil laugh ). The simplest of ideas has gone from start to $1B in 5 years. This at a time when e-commerce has been going through ups and downs. E-commerce is one of our three focus areas at SurePath.

Five Thoughts About the Instagram Acquisition

This is going to be BIG.

That didn't quite work out--while Zynga does represent over 10% of Facebook's revenue, Zynga continued to grew, went public at a multi-billion dollar valuation, and just bought a significant mobile foothold with OMGPOP. Price : If you're looking at the billion, you're looking at the wrong number. It's the 1%--because of Facebook is valued at $100 billion, they just paid 1% of their market cap to acquire the only thing that looks remotely competitive to their core offering in the market.

Can Paid Customer Acquisition Work With Freemium?

Software By Rob

I received the following question from a reader: I was wondering if you had any thoughts on cost of customer acquisition for freemium businesses. quite hard, but I don’t think paid acquisition could possibly work here. Have you seen paid acquisition work for freemium businesses?

The Inside Story of a Small Startup Acquisition (Part 1)

Software By Rob

And the funds came from revenue generated by my portfolio of web applications and websites that I’ve built over the past several years. This acquisition is a long story, but if you have a few minutes let me tell you the best parts. Photo by psiaki.

How to design a recurring revenue model that will attract capital

The Next Web

One of the first things that a venture capitalist looks for in assessing an investment opportunity is the revenue model of the business. More specifically, they are looking for the frequency of that revenue stream, and whether or not it is recurring and easily predictable.

Making Sense of Yahoo's Puzzling Acquisition Strategy

Inc Startups

Marissa Mayer is on the verge of completing 14 Yahoo acquisitions in just six months. With Marissa Mayer at the helm, Yahoo is on an acquisition tear. billion in cash on hand --even after the Tumblr acquisition--she has room for several more big purchases before 2014. "We''re

The Cost of Customer Acquisition: How Much Can You Spend to Earn New Business?

Duct Tape Marketing

The Cost of Customer Acquisition: How Much Can You Spend to Earn New Business? Is it revenue or is it bookings? Once you understand the lifetime value of a customer, you can determine how much you’re willing to pay in new customer acquisition costs.

Drive your recurring revenues.


I have a positive fetish for recurring revenue. In the virtual world, a much higher percentage of incremental revenue falls straight to the bottom line. With the right recurring revenue model, top line growth can really shoot the lights out.

How to Position Your Business to Be Acquired

Up and Running

The sad reality is that many business acquisitions do not work out as hoped. An ROCG study of 502 business owners with revenues between $1 million and $100 million found that only 40 percent successfully transitioned their business and only 9 percent had a formal, written succession plan.

YouTube revenues forecast to hit $5.6bn this year

The Equity Kicker

eMarketer are predicting that YouTube revenues will hit $5.6bn this year, 50% up on last year (reported in the Guarian ). Here are some other relevant facts: Projections of YouTube’s revenues are increasing over time – in May Morgan Stanley were predicting $4bn.

The Inside Story of a Small Startup Acquisition (Part 3)

Software By Rob

This is final installment of a 3-part series covering my acquisition of HitTail. Could you talk a bit about the diligence you did during the acquisition? I asked for all of the following information: Monthly revenue. I would love more information about the acquisition process.

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How to Use Growth Hacking to Increase Revenue 20x in Just 12 Months

Up and Running

Between January 2015 and January 2016, we grew our platform Slidebean from $1K to $20K in monthly recurring revenue. Getting the first tracks of revenue is one of the toughest processes of building a startup.

Refining your Customer Acquisition Cost (CAC) Ratio

Cracking the Code

This metric measures the ratio of the annualized additional recurring revenue generated by your sales and marketing investments. The simple ratio based on GAAP revenue should be used primarily for benchmarking public companies as it is fairly inaccurate. Happy new year 2014!

7 Easy and Effective Customer Segments to Target in Facebook Ads


A customer survey conducted by BigCommerce revealed that 51% of SMBs expect social advertising channels (specifically Facebook Ads) will play a major role in accelerating revenue throughout 2017 and beyond. Blog beginner customer acquisition Facebook advertising segmentation

A Billion Dollars, Through Acquisitions & Perseverance

Inc Startups

The company has since grown to 500 employees, and with the acquisitions of Ketera Network and, was valued at $1 billion in September 2011. Our two most recent acquisitions were Ketera Network, a Kleiner Perkins-backed company, and daily deals company

A Roadmap of Yahoo's Acquisition Targets

Inc Startups

Marissa Mayer made her first official acquisition last week with Stamped. In September 2012, Yahoo's yearly revenue growth clocked in at negative 1%, which was, sadly, a substantial improvement over its previous year's negative growth rate of 24%.

How To Make Money Like Facebook With Online Ads

Startup Professionals Musings

One of the most popular and least successful models I see in new business plans for startups is the so-called Facebook model, providing free services to users while collecting revenue from ads to offset costs and grow the business. Share of revenue from ad action initiated by your visitors.

Acquisition Planning Process: 6 Questions to Answer Right Now

Growthink Blog

Google made 25 acquisitions in 2011; buying companies including Clever Sense, RightsFlow, Apture, Katango, SocialGrapple and more. But Google's acquisitions weren't even a blip on the entire radar screen of acquisitions. What will be the date of that acquisition?

How one founder’s $5 million risk paid off

The Next Web

million in venture capital, and over $5 million in revenue. Entrepreneur Insider Acquisition business transparencyJust last month, Nathan Latka took a risk: A public, five million dollar, business-defining risk. At 26, Nathan is already a bonafide startup icon.

Who's Next on Twitter's Acquisition List: 4 Predictions

Inc Startups

Here are a few areas in which Twitter has the most opportunity to grow by acquisition: Television Twitter has already made a number of acquisitions in its quest to be the real-time news feed for TV addicts and to attract TV advertising dollars.

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Marketplace KPI Dashboard

Version One Ventures

Given that GMV is one of the most important marketplace KPIs, founders should track its growth rate on a monthly and yearly basis, and understand its makeup by customer acquisition channel. Revenue is the income that the company receives from facilitating connections in the marketplace.