Startup Professionals Musings

JUNE 21, 2020

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 $1 trillion. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Revenue 434

Revenue Valuation Viral Retention 434

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. CAC is often measured incorrectly and doesn’t often doesn’t capture the true costs of acquisition. The first input is CAC.

Metrics 150

Metrics Cost Acquisition Startup 150

Startup Professionals Musings

NOVEMBER 28, 2020

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? The cost of social media done well is low. Later cleanup can double your costs and risks. Marty Zwilling.

Intellectual Property 404

Intellectual Property Startup Angel Groups Social Media 404

View from Seed

NOVEMBER 18, 2020

You can read various articles out there which will give you the cursory facts about Airbnb like their overall revenue or profitability or how their business has faired here in 2020 in the COVID environment. But ops & customer support is another 17-20% of revenue and arguably you couldn’t run the business if you took that away.

North America 401

North America IPO Prospectus Europe 401

Both Sides of the Table

SEPTEMBER 28, 2014

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. But those of us with longer memories remember that the revenue line can move south very quickly when the market overall turns south. Net burn is the amount of money you are losing per month.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Startup Professionals Musings

AUGUST 19, 2020

Things will cost more than you expect. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Cash flow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 310

Burn Rate Hockey Stick Salary Angel Investor 310

YoungUpstarts

NOVEMBER 2, 2020

REASON 2: You Need to Gain the Efficiencies to Be Cost-Competitive. REASON 4: Digitally Driven Companies Have Greater Revenue Growth. Digitally advanced” companies create 9 percent more revenue than their industry competitors, as reported in a study conducted by MIT. REASON 6: Digitally Driven Companies Have Higher Valuations.

Valuation 264

Valuation Technical Review Revenue Operations 264

Austin Startup

APRIL 25, 2017

Revenue needs to grow 20x, and margins must expand dramatically. I won’t dive into cost structure in this blog post, but let’s think through how Snap could grow revenue 20x. I won’t dive into cost structure in this blog post, but let’s think through how Snap could grow revenue 20x. Let’s look at each figure.

Valuation 48

Valuation Technical Review Forecast Social Network 48

The Startup Magazine

FEBRUARY 21, 2024

As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. Are there new revenue streams you can tap into? It is also the time to take a hard look at your business model.

Technical Review 134

Technical Review Due Diligence Bankruptcy Intellectual Property 134

VC Cafe

SEPTEMBER 26, 2022

The press took notice, especially since just a few months later startups were laying off employees en-masse to cut costs. Sustainable growth: Prioritise sales efficiency over growth at all costs. ValuatIon should be a function of value, not ego. 2022 VC Market Update Median valuations January through April Pre-seed: $7M ? $9M

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

VC Cafe

JANUARY 10, 2024

billion in annualised revenue , an a myriad of new companies were born, from open source LLMs to application layer startups that were able to move fast and do much more with less. As Viola points out, there are 5 main barriers to adoption: Security, privacy, intellectual property, performance, and cost.

Generative AI 109

Generative AI Artificial Inteligence Open Source 109

Steve Blank

SEPTEMBER 5, 2018

Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits. Almost overnight the floodgates opened, and risk capital was available at scale from venture capital investors who rushed their startups toward public offerings.

Lean 335

Lean Burn Rate Startup IPO 335

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

Feld Thoughts

JULY 9, 2019

This was before the IPO Summer of 2019 when all conventional valuation metrics have entered the land of “suspension of disbelief” which is short-term good and long-term well-we-will-see-…-eventually. We ended up talking about using Gross Profit, instead of Revenue, to do valuation analysis.

Revenue 179

Revenue Valuation .Net IPO 179

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

ReadWriteStart

JANUARY 28, 2022

This article will assist you in gaining a fundamental understanding of equity valuation, kinds of equity, and other related topics. The market regards equity as an ownership “share” in a corporation’s income revenue stream. Importance of equity valuation. Select an appropriate valuation method.

Valuation 108

Valuation Equity Warrant Common Stock 108

Startup Professionals Musings

SEPTEMBER 29, 2018

Things will cost more than you expect. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Cash flow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

Steve Blank

JUNE 27, 2017

Its employees and investors don’t depend on an existing revenue stream. Uber – current valuation >$70 billion – knew the day they started that their ridesharing service violated the law in most jurisdictions. Airbnb – current valuation $31 billion – allows people to rent out their homes, rooms or apartments to visitors.

Startup 275

Startup New York City Valuation Distribution 275

Startup Professionals Musings

MARCH 25, 2023

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 $1 trillion. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Valuation 235

Valuation Revenue Viral Retention 235

Berkonomics

JANUARY 3, 2013

Most every business can take advantage of continuing, recurring revenues from its customer base. Sometimes, products are designed to make all of their profit upon the recurring revenues from supplies or support. Usually that amount exceeds 50% of total revenues, and is often much more.

Revenue 79

Revenue Software Review Vertical Valuation 79

VC Cafe

JULY 13, 2022

There is a a lag of 2-3 months between public markets valuation changes and private markets reported investments. billion in revenue in 2021, 5% of global industry revenues in 2021 ($175 billion) ? billion in revenue in 2021. Initial signs of change can be seen in the decrease in round sizes. Some of the highlights: ?

Technical Review 158

Technical Review Early Stage Merger 158

Steve Blank

APRIL 1, 2020

Any place with a fixed cost that relies on foot traffic will come under pressure. Your revenue plans are no longer valid. What’s your monthly cash burn at your new low revenue level? Cut costs to stay alive for 24 months. Payroll costs/other variable costs. Others are cutting their valuations.

South Korea 333

South Korea Salary Business Model China 333

Startup Professionals Musings

AUGUST 25, 2018

The cost of rolling out a business has never been lower – it only takes a few hundred dollars to incorporate a Limited Liability Corp (LLC) online, create your own website, use social media to get attention, and you are in business. In the early Internet days, it would cost a million dollars to get this far.

Technical Cofounder 184

Technical Cofounder Intellectual Property Silicon Valley LLC 184

VC Cafe

AUGUST 2, 2022

billion valuation) to invest in the Metaverse and build the future of digital entertainment Epic owns Fortnite, one of the most popular multiplayer games, enabling users to interact with each other online in an immersive way to play, socialise, attend to virtual concerts. billion revenue in 2021 for Epic Games and was played by 83.3

IP 206

IP Cofounder Valuation Acquisition 206

Both Sides of the Table

SEPTEMBER 22, 2012

He also nails the reason why venture capital is still necessary to grow large businesses quickly in a world where the costs of running startups have fallen dramatically. After all, growth equals high valuations and loads of venture capital! In revenue terms our first two years of sales were $2.1 Growth, again. And headlines.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

ReadWriteStart

JUNE 1, 2020

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. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. Incubators and Accelerators.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Steve Blank

APRIL 23, 2014

buy out an entire company for its revenue and profits. VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup. However, these nosebleed valuations make it even more important in getting the acquired company integrated correctly.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

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

YoungUpstarts

JUNE 29, 2020

Medical industry manufacturers and suppliers can benefit from the injection molding manufacturing process because of its cost-efficiency. estimates in their recent report that medical products will have a very high global market valuation, crossing 30 billion US dollars by 2026. Check here for more details on injectiion molding.

Demand 173

Demand Product Artificial Inteligence Software Review 173

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). It’s naïve to think you can sell below costs, and make it up by attracting more customers.

Revenue 166

Revenue Affiliate Advertising Retention 166

Startup Professionals Musings

FEBRUARY 15, 2023

It’s more possible to bootstrap today than a few years ago, as the cost of entry continues to go down. Most new teams are geographically dispersed these days anyway, so paying rent for an office should be differed to later stages when revenue is plentiful. Favor profitability over revenue and user growth.

Equity 349

Equity Hockey Stick Bootstrapping Sweat Equity 349

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. Long-term stability requires revenue growth and profit.

Revenue 246

Revenue Entrepreneur Valuation Viral 246

Startup Professionals Musings

OCTOBER 5, 2014

Things will cost more than you expect. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Cashflow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

ReadWriteStart

OCTOBER 7, 2010

As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I As long as the deals cover his infrastructure costs, he should not be worried.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Both Sides of the Table

APRIL 18, 2019

The valuations were too high! The company started the year with no revenue and at it’s peak had a run rate well in excessive of $100 million / year. The key is being able to dial back variable costs during these period. Their time is free and there is no “driver COGS” (costs of goods sold). We are now in Act IV.

South America 250

South America Global New York City Software Review 250

ReadWriteStart

MAY 30, 2022

The cost of the money you receive may be more than you’re willing to give. Stacking costs early in your entrepreneurial career makes you vulnerable to failure. Will your market-driven valuation still achieve your exit goals once everyone (including the taxman) takes home their slice? You might even ask for it.

Bootstrapping 147

Bootstrapping Startup Equity Silicon Valley 147