Remove Cost Remove Revenue Remove Salary Remove Stock
article thumbnail

Flexible VC, a New Model for Companies Targeting Profitability

David Teten

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.

article thumbnail

Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. ” If you’re not profitable you’re purely a cost center to them. Simplifying: Revenue -. Operating Costs.

Startup 418
Insiders

Sign Up for our Newsletter

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

article thumbnail

Equity for Early Employees in Early Stage Startups

SoCal CTO

Paul Graham provides what is roughly the core formula for equity at any point in The Equity Equation : You can use the same formula when giving stock to employees, but it works in the other direction. Suppose further that he's going to cost $60k a year in salary and overhead, x 1.5 = $90k total. Stock vests for 4 years.

article thumbnail

30 Entrepreneurs Share How They Prepare for a Bad Economy

Hearpreneur

During such times a firm should take measures that have historically been thought to safeguard it, such as cutting costs, lowering goals, and keeping an eye on cash flow to weather the impending storm. Thanks to Abdul Saboor, The Stock Dork ! #2- If possible, settle debts before being subject to inflationary costs for your business.

article thumbnail

Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options. In tech startups stock options were here almost from the beginning, first offered to the founders in 1957 at Fairchild Semiconductor , the first chip startup in Silicon Valley. Here’s why. Why would they do that?

article thumbnail

Maximize Your Profits By Optimizing Your Expenditure

YoungUpstarts

To keep track of all your expenditure and the effect this is having on your profits, you need to have a plan that details every facet of your business and the costs each incurs. You should have included all your overheads and running costs in your original business plan, so revisit it and see how your predictions have turned out.

article thumbnail

8 Parameters To Bracket New Venture Funding Requests

Startup Professionals Musings

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. How much equity ownership are you willing to offer?