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

JULY 20, 2015

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. The main multiple we like to use for marketplace businesses is GMV (Gross Merchandise Volume…the total volume of goods sold on the marketplace). Our assumptions for this valuation: Scale: > $1b GMV. for 2015 GMV.

Valuation 60

Valuation Early Stage IPO eCommerce 60

crowdSPRING Blog

NOVEMBER 1, 2013

Why Small Businesses Are Building Remote Workforces | Business Insider - crowdspring.co/1aHHoaf. Good whitepaper on advertising measurement metrics | by Ben Kunz – crowdspring.co/HsVIMR. Qualities Of Truly Great Employees | Business Insider by Dharmesh Shah - crowdspring.co/1h0QmFY. GrowthHackers - crowdspring.co/1akvc2y.

Social Media 94

Social Media Small Business Design Media 94

Steve Blank

SEPTEMBER 14, 2009

Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. There was now a public market for companies with no revenue, no profit and big claims.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

www.forentrepreneurs.com

FEBRUARY 2, 2010

Business Model I would like to propose that in addition to team, product, and market, there is actually a fourth, equally important, core element of startups, which is the need for a viable business model. However there is a lot of value in looking at these same metrics for all other businesses.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

Startup Professionals Musings

AUGUST 13, 2012

People ask me if they really need ANY business plan, unless they are looking for an outside investor. In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Clearly define the customer, channel, and revenue model associated with this solution.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

VC Cafe

OCTOBER 23, 2022

The CEO shared the revenue target for the year at X, and the revenue target for next year at 3X. One of the board members asked a simple question: “Why is revenue our North Star KPI? One of the board members asked a simple question: “Why is revenue our North Star KPI?”

Metrics 179

Metrics Revenue B2C Portfolio 179

Startup Professionals Musings

AUGUST 8, 2016

Remember you can’t sustain a business or social cause with no revenue or profit. Validate your business model on real customers. Giving free beta copies of your solution to customers to elicit testimonials does not validate a business model. Every business requires spending money to make money.

Intellectual Property 120

Intellectual Property Entrepreneur Elevator Pitch Exit Strategy 120

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

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. multiple fell down to ~2.2x

Software Review 48

Software Review Technical Review Valuation Portfolio 48

David Teten

AUGUST 6, 2015

Some model users will want to stress-test assumptions and explore the detailed calculations throughout a model, but many important decision makers will only want to look at selected outputs (e.g. financial statement summaries, valuation analysis, ratio analysis, etc.) once a model has been finalized. 16) Cash is king.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Startup Professionals Musings

MAY 13, 2011

People ask me if they really need ANY business plan, unless they are looking for an outside investor. In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Clearly define the customer, channel, and revenue model associated with this solution.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

A Smart Bear: Startups and Marketing for Geeks

MARCH 21, 2017

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. Even for startups, it takes years for a new product to become good enough to demand many millions of dollars in revenue.). Yet mobile advertising revenues were paltry.

Balance Sheet 242

Balance Sheet Vertical Acquisition Revenue 242

Ben's Blog

AUGUST 17, 2020

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?” How valuation multiples work Why did multiples become a shortcut-heuristic for estimating valuations in the first place?

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

Gust

AUGUST 5, 2012

People ask me if they really need ANY business plan, unless they are looking for an outside investor. In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Clearly define the customer, channel, and revenue model associated with this solution.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Up and Running

JULY 22, 2019

Early investors will also be looking for insight into the growth potential of your business. Be sure to demonstrate its potential by clearly documenting key performance indicators, highlighting key customers, and demonstrating realistic revenue projections. Ask for what you need in order to prove that your business model works.

Canada 78

Canada Early Stage Valuation Finance 78

Startup Professionals Musings

APRIL 22, 2010

People ask me if they really need ANY business plan, unless they are looking for an outside investor. In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Clearly define the customer, channel, and revenue model associated with this solution.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

cdixon.org

AUGUST 3, 2012

Some consequences: - For consumer startups with non-transactional models (ad-based or unknown business models), you need something closer to 10 million users versus 1 million users to get Series A funded. - Hence, many early-stage consumer startups are switching to transactional models. -

Bridge Financing 86

Bridge Financing Early Stage Valuation Later Stage 86

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue. Board Control.

Founder 245

Founder Technical Review CTO Hire IPO 245

The Equity Kicker

OCTOBER 8, 2012

According to Paul most startups should look at revenue growth, but active users is a good proxy for companies that aren’t charging their customers (yet). Many of those milestones will be growth oriented, but they often centre on hitting round numbers – e.g. $10k or $100k per month in revenues or 1m active users.

Silicon Valley 149

Silicon Valley IPO eCommerce Valuation 149

Startup Professionals Musings

NOVEMBER 2, 2018

Employs a profitable business model with customer traction. A winning business model, like Zappos, often benefits social needs as well as business needs. But business models need to be validated by paying customers (beyond free trials) before they are credible.

Intellectual Property 48

Intellectual Property Initial Public Offering Merger Acquisition 48

David Teten

FEBRUARY 9, 2015

The cover note should include: name, website, location, revenues (if any), detailed financing history (if any), and precise terms on which you are seeking to raise capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.” Business Model.

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60

David Teten

DECEMBER 3, 2019

Technographics vendors such as Builtwith , Datanyze , HG Data , Stackshare, and Stacklist help CEOs identify the right tech platform on which to build their business; they’re also helpful for investors to due diligence a company’s tech stack choices. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Team, Product, Traction, Business Model and Market.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Austin Startup

SEPTEMBER 17, 2017

A business model must be created out of whole cloth, and generally it’s a compilation of assumptions piled on top of other assumptions. Every model has a happy outcome when a founder is trying to convince himself or herself, a team, an investor, or even a spouse that the venture ahead is a good idea.

Valuation 48

Valuation Forecast Seed Money Business Model 48

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. The opportunity to transact at the point of purchase increases the sheer number of revenue opportunities. Businesses are also one-click from advertising through Google and now Facebook.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Rob Go

FEBRUARY 5, 2012

Usually financial metrics are pretty sparse at early stages and investors have a hard time giving companies “credit” for steady, linear progress. Small but accelerating revenue growth (often in the $50K-$100K range monthly). You should start testing some low-hanging fruit for revenue to prove willingness to pay.

Business Model 65

Business Model Seed Stage Valuation Vertical 65

Cracking the Code

DECEMBER 16, 2006

It is true that the SaaS model faces some challenges like service reliability, data privacy, lower level of customization, integration with existing applications, vendor viability concerns. whereas traditional software companies of this size have a growth rate of less than 10% and revenue multiples of 2-2.5x. SaaS 13 Index Valuation.

Software Review 48

Software Review Silicon Valley Technical Review Software 48

crowdSPRING Blog

MAY 8, 2015

What is the ideal size and make-up of a team for a pre-revenue SaaS startup? The Angel VC: Key Revenue Metrics for SaaS companies – buff.ly/1INSu29. Valuation As A Scorecard – buff.ly/1F0CUyC. Online Courses Accelerate Any Business Model bit.ly/1InOB3Z. – buff.ly/1EY9ktL. 1beNtlI.

Small Business 48

Small Business Design Social Media Startup 48

reidhoffman.org

NOVEMBER 12, 2013

Friendster’s valuation set the tone for the entire social networking space. Press and analysts characterized LinkedIn in one of two ways: “LinkedIn is an interesting niche that might be worth paying attention to” or “LinkedIn is the Friendster for business”. we had no revenue. Investors see a lot of pitches.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

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. What are the key drivers and metrics? Is the model consistent with the business plan?

Silicon Valley 35

Silicon Valley San Jose Hockey Stick Venture Capital 35

Hearpreneur

AUGUST 5, 2020

The global automakers and suppliers will be adapting their business models accordingly, forming new partnerships and investing in new technologies. These businesses have had to completely reimagine their business models and will likely be pivoting for a long time to come. 10- Virtual field trips for kids.

Technical Review 155

Technical Review Software Review Entrepreneur China 155

Steve Blank

NOVEMBER 5, 2009

Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. Is there a profitable business model? The Traditional VC Pitch Entrepreneurs who pursue the traditional product development model don’t have customer data to answer these questions. Can it scale?”

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

Up and Running

OCTOBER 3, 2018

Financial Summary: Explain your business model, startup costs, revenues, and liabilities to the company. Milestones and metrics that you’ll need to hit to be viable. People in the business predict technology will develop to generate more data-driven insights about which spaces give the best value to residents.

El Paso 61

El Paso Business Plan Technical Review Forecast 61

Up and Running

MARCH 21, 2016

It’s tempting to focus on yourself and your business model, but ultimately, investors want to know what’s in it for them. Get them to agree that the metrics make sense and then hit them. Share user engagement and metrics. See Also: 7 Key Metrics Every Business Owner Should Monitor. His advice?

Cofounder 60

Cofounder Metrics Angel Investor Silicon Valley 60

Up and Running

FEBRUARY 17, 2016

There’s no one model—or one business plan—for breweries. Each brewery will have its own unique model and plan. Prospective brewers have to figure out the right business model for their plans, location, interests, startup resources, and long-term vision. Metrics: Know your numbers.

Oregon 60

Oregon Jordan SBA Cofounder 60

crowdSPRING Blog

MAY 4, 2011

Must read article for all startup entrepreneurs about valuation – [link]. Interesting perspective by @msuster on product vs. service startup business models – [link]. Negotiation Tips For Small Businesses, Entrepreneurs and Freelancers – [link]. agency revenues – [link]. – [link].

Social Media 92

Social Media Small Business Design Media 92