article thumbnail

Cram Down – A Test of Character for VCs and Founders

Steve Blank

For the common shareholders (employees, advisors, and previous investors), a cram down is a big middle finger, as it comes with reverse split – meaning your common shares are now worth 1/10th, 1/100th or even 1/1000th of their previous value. (A A cram down is different than a down round. Why do VCs Do This?

Cram Down 404
article thumbnail

Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

Funding might be a need in some cases — but it’s not an absolute necessity. ? The business should be self-sustainable. The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. Incubators and Accelerators.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Grow or Die – - Revenue growth must be the core strategy and drive all other strategies.

Scalable Startup

And by growth I mean revenue growth. Flat to negative revenue growth is a real red flag, especially for early stage companies. If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding. And protection form death.

Revenue 22
article thumbnail

On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

Ah, but today’s Internet companies have real revenue! New investors hate down rounds. Those with strong business models suddenly stand out when the tide goes out. I said that at the Founder Showcase, too. and profits! Sure, that makes them better companies than those of 12 years ago. That’s a fact.

article thumbnail

Sensitivity Analysis key in startup financial projections

NZ Entrepreneur

For example, “How will unit cost affect our capital requirements and how will product pricing affect revenue?” It isn’t good enough to just say ‘what does halving my revenue do to the business?’ This is more important to startups that are in the pre-revenue phase, when products are under development.

Startup 68
article thumbnail

How the pre-seed round made a comeback in 2024

VC Cafe

A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? We’d like to see that the relevant functions are covered (who’s writing code?

Valuation 186
article thumbnail

A Recently Exited Founder on Surviving the Contradictory Role of Startup CEO

View from Seed

Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. Think more about business models. I’ve seen many companies with great products die because a great product is not necessarily a great business. Keep at it. Be pragmatic.

Founder 120