Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. Most existing investors (those still in business) hoarded their money and stopped doing follow-on rounds until the rubble had cleared. Why do VCs Do This?

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Up and Running

APRIL 30, 2020

Each scenario combines the key numbers in the hypothetical case and explores the impact on the bottom line, and helps you define your cash burn rate and runway. Simply put it’s a better method of accurately looking forward and business owners know better than mathematicians. The main benefit is the scenario is not set in stone.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) The Revenue Plan – The Third Fatal Assumption. Notice that the traditional product introduction model leads to a product launch and the execution of a revenue plan. that make up a business model.

Burn Rate 247

Burn Rate Management Business Model Customer Development 247

Steve Blank

FEBRUARY 22, 2010

Startups that are searching for a business model need to keep score differently than large companies that are executing a known business model. Yet most entrepreneurs and their VC’s make startups use financial models and spreadsheets that actually hinder their success. Managing the Business. Here’s why.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Steve Blank

AUGUST 27, 2012

Tossing their agile development process and at times their entire business model in the air, the company would go into fire-drill mode and engineering would start working on whatever his latest insight was. ” “A pivot is a substantive change to one or more of components to your business model.

Founder 316

Founder Cofounder Advisory Board Burn Rate 316

Startup Professionals Musings

DECEMBER 15, 2014

At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier.

Bootstrapping 276

Bootstrapping Entrepreneur Startup Burn Rate 276

Startup Professionals Musings

AUGUST 27, 2012

Investors like $1B markets with double-digit growth rates. Business model. In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Project both revenues and expense totals for next five years, and past three years. Implicit in this is the go-to-market strategy.

Elevator Pitch 247

Elevator Pitch Exit Strategy Burn Rate Merger 247

Startup Professionals Musings

AUGUST 7, 2015

How the solution and business model work to fund the business. Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. Investors will impatiently expect a winning business model, customer segment definitions and volume projections.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

ReadWriteStart

JANUARY 27, 2011

I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. Persistent is breaking out of the mold of labor arbitrage, and looking at new and exciting business models. million in revenue.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Startup Professionals Musings

JUNE 10, 2011

Investors like $1B markets with double-digit growth rates. Business model. In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Project both revenues and expense totals for next five years, and past three years. Implicit in this is the go-to-market strategy.

Elevator Pitch 234

Elevator Pitch Exit Strategy Burn Rate Merger 234

Startup Professionals Musings

JUNE 28, 2013

At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier.

Startup 264

Startup Burn Rate Bootstrapping Valuation 264

Startup Professionals Musings

AUGUST 14, 2015

Even non-profits require money to operate, so every startup needs a business model with plans to bring in income. This means delegating tasks and not micro-managing, as well as more time spent working on the business, rather than in the business. Calculate and manage your financials.

Elevator Pitch 120

Elevator Pitch Burn Rate Startup Metrics 120

Startup Professionals Musings

MAY 19, 2010

Investors like $1B markets with double-digit growth rates. Business model. In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Project both revenues and expense totals for next five years, and past three years. Implicit in this is the go-to-market strategy.

Elevator Pitch 235

Elevator Pitch Exit Strategy Burn Rate Merger 235

Gust

DECEMBER 7, 2014

At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier.

Bootstrapping 191

Bootstrapping Entrepreneur Startup Burn Rate 191

Gust

AUGUST 19, 2012

Investors like $1B markets with double-digit growth rates. Business model. In this section, you need to be passionate about recurring revenue, profit margin, and volume growth. Project both revenues and expense totals for next five years, and past three years. Implicit in this is the go-to-market strategy.

Elevator Pitch 146

Elevator Pitch Exit Strategy Burn Rate Merger 146

VC Cafe

NOVEMBER 2, 2019

Benchmarks are typically specific to stage/business model/geo. In Rob Go’s words: For seed and Series A deals, investors will also need to see a high-potential team with founder/market fit , a large and attractive market opportunity , and a business model with increasing returns to scale. Consumer apps and services.

B2C 141

B2C Technical Review Startup Retention 141

Professor VC

JULY 31, 2008

This whole process got me thinking about the textbook business model. Similar to the textbook business, the music business BN (before Napster) was controlled by the labels. The artists received very little of album sales, but kept concert and merchandise revenue. Labels: business models , Grateful Dead , textbook.

San Jose 28

San Jose Software Review Angel Investor Silicon Valley 28

Startup Professionals Musings

JUNE 9, 2012

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. For even more value, you should develop a financial model. Check industry average statistics to make sure you are in the right range.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

JULY 15, 2013

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. For even more value, you should develop a financial model. Check industry average statistics to make sure you are in the right range.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

MARCH 22, 2011

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. For even more value, you should develop a financial model. Check industry average statistics to make sure you are in the right range.

Forecast 230

Forecast Burn Rate Startup .Net 230

Professor VC

AUGUST 26, 2011

To that last one, there is certainly some truth as the standard time vs. revenue chart in most business plans looks like this: Im not teaching Entrepreneurial Finance this semester for the first time since Fall 2007. Is the model consistent with the business plan? Does the business model make sense?

Silicon Valley 35

Silicon Valley San Jose Hockey Stick Venture Capital 35

Startup Professionals Musings

MARCH 25, 2010

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. For even more value, you should develop a financial model. Check industry average statistics to make sure you are in the right range.

Forecast 151

Forecast Startup Burn Rate .Net 151

Professor VC

JUNE 20, 2011

I took a look back at our original financial model we presented to VCs in 2004. The business model (OEM through broadband and home security companies for mass distribution) if not specific product functionality has remained largely the same. Can Entrepreneurship Be Taught? ► October. (1). Watch Out for the Red W(h)ine.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

BeyondVC

OCTOBER 6, 2003

It feels like 1999 again when the ASP (application service provider) business model was all the rage. Siebel’s enterprise license revenue model is coming under real pressure as large enterprises are getting tired of spending millions of dollars upfront with no real ROI. Could this be the return of the ASP model?

Burn Rate 60

Burn Rate Business Model Hosting Revenue 60

abovethecrowd.com

FEBRUARY 24, 2015

As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. You must subtract it from your top-line revenue. You should not pay a net revenue multiple for a gross revenue disclosure.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Professor VC

JULY 2, 2010

I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. Can Entrepreneurship Be Taught? ► October. (1). Watch Out for the Red W(h)ine. ► September. (1). Survey says VC's invest on Gut Instinct. ► July. (1). ► May. (1).

San Jose 28

San Jose Silicon Valley Venture Capital Angel Investor 28

Up and Running

MAY 22, 2018

Every successful small business goes through four stages during its entire existence: Existence : expanding from pilot production to broad-scale production. Survival : generating enough cash flow to stay in business. Success : business model works and is stable, but there is still untapped potential. Nerdy Term: Margin.

Exit Strategy 90

Exit Strategy Angel Investor Search Elevator Pitch 90

www.chubbybrain.com

SEPTEMBER 28, 2011

spent $20 million to get back to the same revenue that I had when I was CEO. created a vastly higher cost structure; I had 80 people mostly on base salaries under $100,000 and was bringing in revenue at the rate of $20 million annually. .”). We had the wrong business model. During this year they.

Software Review 79

Software Review Startup Technical Review Vesting 79

Both Sides of the Table

FEBRUARY 14, 2016

Huge funding increases lead to massive wage inflation, rent inflation and thus higher burn rates. forward revenue for SaaS businesses when in the years before it had been less than 5x. Just as with the late 90s there is no new “business model” that defies the laws of gravity.

Valuation 150

Valuation Down Round Startup Later Stage 150

VC Cafe

JULY 6, 2010

VC Cafe: What is you business model? How are you planning ramp up the revenue? Also, the nice thing about these revenue streams is that they actually help the Libox user. Our burn rate is very low and the technology is very scalable. I want to connect my camera and my Libox should automatically recognize it.

Media 84

Media Management API HTML 84