Up and Running

AUGUST 19, 2014

I am impressed when the entrepreneur talks to me about solving a specific customer’s problem. If he/she really knows what the customer wants and is willing to pay for, I sit up and take notice.”. - Forget the stupid IRR (that’s internal rate of return) that they taught you in business school. Tweet This Tip.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Steve Blank

JUNE 11, 2013

. • Repeatable: Startups may get orders that come from board members’ customer relationships or heroic, single-shot efforts of the CEO. Does our product or service solve a customer problem (product-market fit)? How do we attract, keep and grow customers? These are great, but they are not repeatable by a sales organization.

Venture Capital 333

Venture Capital IRR Liquidity Event Business Model 333

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. They’re better than large companies at identifying customer needs/problems and finding product/market fit by pivoting rapidly. Startups are unencumbered by the status quo.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Both Sides of the Table

MAY 24, 2021

It’s a virtue of the laws of large numbers ($100 million in ARR ) plus strong growth compounding off of large numbers plus large customers relying on our products for 7+ years or longer. as measured by MOIC, TVPI and IRR and by sources that don’t reveal the underlying data and who themselves have to rely on incomplete datasets.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Startup Professionals Musings

FEBRUARY 5, 2018

Brand scaling is driven by customers, not by business, large or small. Thus it is imperative that you get to market quickly, adapt to your customer demands, and scale before the market changes, or new competitors appear. Investors measure their success by looking at the internal rate of return (IRR).

IRR 143

IRR Marketing Startup Angel Investor 143

Both Sides of the Table

OCTOBER 17, 2019

But like the company Kyriba, where we recently sold our position at above $1 billion, it took time until the revenue exceeded $100 million recurring and then the industry really competed to back this amazing company since it had scale, defensible technology and long-term, committed customers. Over the past 2.5 Why does that matter?

IP 223

IP Intellectual Property IRR Cofounder 223

Steve Blank

JUNE 11, 2013

. • Repeatable: Startups may get orders that come from board members’ customer relationships or heroic, single-shot efforts of the CEO. Does our product or service solve a customer problem (product-market fit)? How do we attract, keep and grow customers? These are great, but they are not repeatable by a sales organization.

Venture Capital 225

Venture Capital IRR Liquidity Event Business Model 225

Both Sides of the Table

MAY 19, 2018

Your historical trading information including financials and a “customer file” which shows the history of your transactions so that investors can run “cohort” analyses Customer reference, personal references, key team members, compensation, cap table, stock option plan, etc. But just putting a customer reference list in a data room?

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Tim Keane

JANUARY 12, 2010

If you look at the spreadsheet, you will see that the “Required Rate of Return” is expressed as an IRR.   Internal Rates of Return naturally compound, so a 50% IRR is 7.59   (If you plug in an IRR of 58.5%   Internal Rates of Return naturally compound, so a 50% IRR is 7.59 times at 5 years and 11.39

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

David Teten

MAY 8, 2012

As Steve Case has said, it’s ridiculous that anyone can gamble and be guaranteed to lose money, but there are strict regulations around who can invest in early-stage private companies and earn (in some cases) a 27% IRR on their capital. *. The Entrepreneurs Access to Capital Act helps to redress this. Start now! *

Securities and Exchange Commission 148

Securities and Exchange Commission IRR Entrepreneur Angel Investor 148

David Teten

NOVEMBER 17, 2011

I’m hopeful that they will change their minds soon enough after getting some external validation from potential customers!). By definition, IRR is calculated using amount invested, amount received at some point in the future, and time passed between the two cash flows.

Employee 155

Employee IRR Startup Mexico 155

David Teten

APRIL 8, 2013

Based on a range of sources, we believe that most funds with well-developed Portfolio Operator models have top-quartile returns (typically above 20% IRR in the relevant time periods).

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

Startup Professionals Musings

MAY 9, 2011

Luckily for me (and regardless of what anyone else says, there is a lot of luck involved in angel investing), I have since had significant positive exits to companies like Kodak, CBS and Facebook, and the current value of my portfolio is approaching the 30% IRR that rational angels target. David: Being an entrepreneur is tough.

New York 221

New York Accredited Investor Advisory Board IRR 221

K9 Ventures

DECEMBER 14, 2008

When it comes to helping portfolio companies grow, it is the people relationships that matter most — can you open doors to prospective customers, employees, partners, lawyers, accountants, bankers and of course other investors. Lets assume that Shylock Ventures is capable of producing a 20% IRR on a $100M fund.

IRR 99

IRR Bandwidth Venture Capital Early Stage 99

Hunter Walker

FEBRUARY 25, 2018

For Homebrew , we’ve optimized for a product offering that will appeal to our target customers (founders) and maximize spending our time being hands-on supporting startups. Our J Curve and early IRR may look worse than other funds. Of course we think this’ll be to our advantage but….

Product 82

Product IRR LP Seed Stage 82

VC Cafe

JULY 2, 2012

Lots of returns are being made these days, but the latest CalPers report shows dissapointing returns by Israeli VC firms , with an IRR of 3.5%-3.8% This month’s trend continues to be acquisitions of Israeli firms by large US corporates. to JVP and Carmel, the highest performing funds. . FACEBOOK BUYS FACE.COM FOR $100M. Facebook Inc.

Latvia 109

Latvia Lithuania Russia 109

Both Sides of the Table

MAY 25, 2013

The better way to think about VC returns is, do the firms consistently beat alternative asset clases on an IRR basis to adjust for the increased risk and lack of liquidity? You invest across many funds just as VCs invest across many companies. Here the data is not always kind to VCs. But the top 25% do consistently beat the alternatives.

LP 374

LP Later Stage IRR Term Sheet 374

Feld Thoughts

JULY 31, 2013

Our biggest customers are the wireless carriers and big content/Internet companies. Our equity IRR has averaged around 50% since inception. Our fiber is connected to nearly every significant colocation, hosting, and carrier hotel facility. We raised $2.7B of debt and $870M in equity in three rounds.

Bandwidth 147

Bandwidth Colorado Startup IRR 147

Steve Blank

AUGUST 5, 2014

But then, one our customers was Larry Ellison, with this little company that wasn’t even called Oracle at the time. I was on the way to my lifetime IRR of 90%. It wasn’t a great choice, but I was THERE. I loved the business, and I was good at it. But then, trouble.

Venture Capital 333

Venture Capital Silicon Valley Chicago Cofounder 333

Professor VC

MARCH 10, 2009

In other parts of the country, this is business as usual: Identify a customer need Build a product Sell the product In the valley, the knee jerk reaction is to start with the powerpoint deck and look for the venture capital drug. Jon Fisher purposely avoided raising venture capital in his ventures.

Bootstrapping 28

Bootstrapping San Jose Silicon Valley Software Review 28

crowdSPRING Blog

AUGUST 7, 2011

In addition, as long as investors can earn higher returns on T-notes, they will expect higher returns from alternative investments in equities and VC’s may follow suit for similar reasons and expect a higher IRR from their invest,ends in new ventures. Uncertainty may abate.

Small Business 86

Small Business IRR Government United States 86

The Next Web

DECEMBER 16, 2012

Income-based valuations consider aspects like CAPM (capital asset pricing model), IRR (internal rate of return), NPV (net present value), WACC (weighted average cost of capital), NCF (net cash flow), and GAAP (generally accepted accounting principles). Asset approach. At Flippa, we’ve found that this approach can undervalue a site.

Valuation 128

Valuation NPV Net Present Value IRR 128

Ben's Blog

AUGUST 17, 2020

If an investor could have identified Salesforce’s ability to maintain such prolonged growth upfront, invested in its 2004 IPO, and then held on through to today, they could have made ~70x returns: equivalent to ~30% IRRs over a 16 year period. Not too shabby!

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

Occam's Razor

OCTOBER 14, 2014

Any big changes in your marketing/customer acquisition strategy over the last time period (more money doing Search, less money in Email, elimination Facebook as it does not work, etc., Any big shifts in investment (marketing, customer experience, team sizes, tools). Outcomes of the conversations with your Finance team and Sr.

Analytics 133

Analytics Vertical Metrics Web 133