Both Sides of the Table

JUNE 5, 2011

So in 2011 as a startup company if you can generate lots of demand you can definitely raise an A round of capital (say $3 million) at a $7 or 8 million pre-money valuation or slightly higher whereas just two years ago you would have struggled. I raised my A round at a $31.5 million post-money valuation with no revenue.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

JULY 29, 2010

The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

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. In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

NZ Entrepreneur

SEPTEMBER 16, 2020

For example, “How will unit cost affect our capital requirements and how will product pricing affect revenue?” It isn’t good enough to just say ‘what does halving my revenue do to the business?’ To identify sensitivities here, you need to comprehensively challenge your assumptions about demand, sales cycles, etc.

Startup 69

Startup Sales Cycle Down Round Revenue 69

Berkonomics

MARCH 5, 2020

If there are high barriers to entry with such protections as patents, long development time already spent or contracts with the major potential customers, then the risk of a competitor with more resources jumping into the frothy pool and taking advantage of the demand created by the company is minimized. And fifth: Competitive risk. .

Valuation 62

Valuation Down Round Early Stage Demand 62

ithacaVC

NOVEMBER 14, 2014

Funding lets you invest in growing your company faster than revenue growth would normally allow. Revenue is how traditional businesses get valued. Early stage companies often don’t have revenue or have revenue so low, it’s not a real indicator of future potential. This works for revenue or active users.

Valuation 69

Valuation Startup Down Round Early Stage 69

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing.

Lean 244

Lean Silicon Valley Startup RSS 244