A Smart Bear: Startups and Marketing for Geeks

AUGUST 18, 2015

They have everything: money, brand, momentum, existing customers, press, product teams, distribution channels, expertise, market insight, analysts, sales offices, product features, and, by definition, a working business model. The insight is: The profitable revenue stream is a prison. Not anymore. That’s a young company’s game.

Technical Review 120

Technical Review Valuation Flash Revenue 120

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

DECEMBER 1, 2017

Every business needs to develop a revenue model even before a product. The alternatives range from giving the product away for free (revenue from ads), to pricing based on costs, to charging what the market will bear (premium pricing). Price based on product costs plus margin.

Revenue 166

Revenue Affiliate Advertising Retention 166

Steve Blank

MARCH 12, 2014

We realized that past K-12 Entrepreneurial classes taught students “the lemonade stand” version of how to start a company: 1) come up with an idea, 2) execute the idea, 3) do the accounting (revenue, costs, etc.). We wanted to teach our students how to think like entrepreneurs not accountants.

Lean 334

Lean Customer Development Startup Silicon Valley 334

Startup Professionals Musings

JUNE 26, 2013

It’s higher risk, but higher return, to pick the big winners early, before Angels have set unreasonable valuations and restrictive terms. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

Startup Professionals Musings

SEPTEMBER 30, 2013

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Startup Professionals Musings

AUGUST 10, 2014

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. A business only achieved critical mass by becoming cash-flow positive.

Revenue 246

Revenue Entrepreneur Valuation Viral 246

Startup Professionals Musings

DECEMBER 11, 2022

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Startup Professionals Musings

JUNE 26, 2016

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. A business only achieved critical mass by becoming cash-flow positive. Both have worked.

Revenue 145

Revenue Valuation Startup Viral 145

Startup Professionals Musings

AUGUST 31, 2012

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Startup Professionals Musings

OCTOBER 20, 2017

The question every entrepreneur and business executive should be asking is what are the drivers of the digital transformation, and how can you make them opportunities rather than costs. Think about the up-and-comers during the past decade that have either created new business models or stolen share from established players.

Technical Review 136

Technical Review Demand Valuation Business Model 136

www.forentrepreneurs.com

FEBRUARY 2, 2010

Blog About Log in Register Startup Killer: the Cost of Customer Acquisition In the many thousands of articles advising entrepreneurs on what they have to focus on to build successful startups, much has been written about three key factors: team, product and market, with particular focus on the importance of product/market fit.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

Steve Blank

MARCH 31, 2014

Companies horde cash and squeeze the most revenue and margin from the money they use. Look at the valuations of companies like Tesla, Illumina, and Twitter. The first will be commodity businesses that are valued for their ability to execute their current business model.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Startup Professionals Musings

OCTOBER 7, 2022

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. Here is where projections of cost, pricing, volumes and cash flow are critical. Be prepared to explain your business model.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

JUNE 17, 2011

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Startup Professionals Musings

MARCH 14, 2020

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

Startup Professionals Musings

SEPTEMBER 9, 2010

It’s higher risk, but higher return, to pick the big winners early, before angels have set unreasonable valuations and restrictive terms. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

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

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

OCTOBER 19, 2015

Outside investors are most interested in scaling a proven business model, not research and development. Thus it’s a waste of time for most entrepreneurs to be looking for investors until they have a product and some customer revenue. The best technologies are barely invisible and low cost.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

JANUARY 4, 2020

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. Here is where projections of cost, pricing, volumes and cash flow are critical. Be prepared to explain your business model.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

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 deliver exactly the same results at the same net cost to the customer via a SaaS product, you may get a tech multiple 10X higher.

Technical Review 48

Technical Review Software Review Nevada Silicon Valley 48

Startup Professionals Musings

MAY 22, 2010

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. A great business often starts with one person, but it doesn’t end there. Get a real customer and real revenue. It doesn’t prove your business model of pricing, distribution, and support.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

ReadWriteStart

JULY 17, 2023

In the financial year ending in March this year, the startup generated a revenue of $18.5 Furlenco’s innovative business model has disrupted the traditional furniture industry in India. On the other hand, Sheela Foam will benefit from Furlenco’s innovative business model and expertise in the furniture rental space.

India 104

India Acquisition Merger Curation 104

Startup Professionals Musings

NOVEMBER 4, 2011

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. Like the business plan, a financial model is required as much for your own use as to impress angel investors. This is called “validating the business model.”

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

The Startup Magazine

JUNE 1, 2023

We’re hitting record revenue months, weeks, and margins. There are currently tons of “zombie” startups that have runway, but growth has slowed and they have valuations that they won’t be able to grow into. Be honest with yourself VCs are now going to be looking closer at margins, cost structures and true sales, and product market fit.

Early Stage 109

Early Stage Los Angeles Silicon Valley Cofounder 109

The Startup Magazine

APRIL 24, 2020

Whether you’re interested in selling a website you built from scratch, or want to sell your Amazon-based B2C brand, there are many different baseline factors that go into determining an appropriate website valuation number. While it’s true that valuations can get quite technical, the basics are relatively easy to understand.

eCommerce 91

eCommerce Valuation B2C Revenue 91

Version One Ventures

OCTOBER 15, 2020

In order to achieve such feats, Strike uses (at least initially) a trusted or custodial model that hedges any BTC risk with their own trading desks and infrastructure. Other businesses are pushing mainstream Lightning adoption for shopping. And >40% of that revenue is coming from in-game purchases.

Networking 168

Networking Global OTC Security 168

Cracking the Code

OCTOBER 1, 2020

The company’s success has been largely driven by its developer-led freemium model, going from Series A funding to a valuation of $2.6B Once we had the user (developer) and the buyer (security team) on board, the freemium model really accelerated and made it quite resilient to this crisis. in just 30 months.

Early Stage 62

Early Stage Open Source Development Team Review Security 62

Startup Professionals Musings

SEPTEMBER 23, 2010

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. Finalize your financial model. Like the business plan, a financial model is required as much for your own use as to impress angel investors. This is called “validating the business model.”

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224

View from Seed

APRIL 30, 2015

It can be lower cost and can either buy more time or accelerate growth. It’s generally got a lower cost compared to equity capital and can help support growth. Traction and revenue? Business model? But the costs are definitely there. What is it, and how should founders think about it?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

MARCH 18, 2016

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” First priority is real revenue, customers and contracts.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

Austin Startup

FEBRUARY 13, 2019

Not necessarily the entire business, but at some point, something will fail and you’ll either learn from it and grow or it will be the beginning of the end. Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

YoungUpstarts

JANUARY 6, 2014

Instead of the old “throw-money-at-a-good-idea” approach, I based our strategy on the belief that the best startups are the ones that can become revenue-positive shortly after takeoff with as little upfront investment as possible. Digital marketing is my expertise, and is the common thread throughout all our investments.

San Francisco 154

San Francisco Business Model Silicon Valley Coder 154

Lightspeed Venture Partners

OCTOBER 7, 2012

They won a design award at a trade show, but have no revenue and no orders. As he said, “Great innovations solve problems or reduce costs. That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. Kevin questioned the use case since bowls are ubiquitous.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Seeing Both Sides

JULY 21, 2014

But many years later, I began to appreciate that one of our core flaws was our business model. As a result, the full revenue for each deal was recognized in that quarter as soon as the software was shipped. This allowed our revenue to skyrocket from $1.8 This allowed our revenue to skyrocket from $1.8

Revenue 54

Revenue Valuation Churn Rate Portfolio 54