Both Sides of the Table

SEPTEMBER 28, 2014

Gross burn is the total amount of money you are spending per month. Net burn is the amount of money you are losing per month. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Both Sides of the Table

FEBRUARY 15, 2016

Some companies may be able to become “cockroaches” or “ramen profitable” but cutting costs and staff substantially and getting to a burn rate that last 2 years. They may push you to cut costs. Again, I know this sounds very obvious but in practice it isn’t always.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

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. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? Your A round? Him: On metrics.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Lightspeed Venture Partners

SEPTEMBER 21, 2013

The smartphone app that enables this is free but it costs $2.49 to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. This is a company that has failed to find product market fit over the last 21 months and after spending almost $2M (capital raised plus revenue).

Pre-Money Valuation 167

Pre-Money Valuation Valuation Dilution Distribution 167

Gust

SEPTEMBER 17, 2014

Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? How will you price the next round?

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153