David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Both Sides of the Table

SEPTEMBER 29, 2009

Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. As a personal story, I sat on the board of one company with a very unhealthy burn rate relative to revenue or expected growth. They also make M&A activity more difficult and with lower outcomes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

David Teten

JANUARY 21, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

The Equity Kicker

MAY 14, 2012

Twice in the last week I found myself coaching founders on how to build a financing plan around value creation milestones so I thought I would share what I said here. achieving first revenues. breaking through revenue thresholds – e.g. run-rates of £1m, £5m, £20m and so on. achieving first revenues.

Finance 118

Finance Valuation Venture Capital Dilution 118

Startup Professionals Musings

SEPTEMBER 5, 2016

Don’t quit your day job until the revenue is flowing. Keep later critical financing needs viable. The most critical need for financing will come as you scale initial success, when you need money to cover new inventory, delayed receivables, and location expansion. Don’t let early funding increase risk and dilute your potential.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

The Next Web

FEBRUARY 27, 2014

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. This is typically in conjunction with an upcoming financing or pending takeover offer. This is typically in conjunction with an upcoming financing or pending takeover offer.

Valuation 167

Valuation Forecast Seed Stage .Net 167

This is going to be BIG.

MARCH 16, 2020

Some key existings who didn’t want to see their prior money get lost wouldn’t budge on a dilutive financing, despite the fact that they knew where we were headed. This is what happens when you deal with investors that aren’t professionals. The answer, unfortunately, was to declare bankruptcy.

Bankruptcy 95

Bankruptcy Private Equity Seed Stage Dilution 95

Both Sides of the Table

APRIL 25, 2011

It’s nearly impossible to get a services company financed by VCs. They have created two internal technology “products&# and wanted to figure out how they could turn their services business into a product business that could be financed. You’re a small fish. This team is talented. They wanted advice.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. A founder asked me what makes a $2M round “pre-seed”? Pre-seed tends to be about developing an MVP and generating early traction.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

David Teten

NOVEMBER 17, 2011

I’ve often found it helpful to have on hand a simple model showing the impact of each financing stages on all team members, suitable for sharing with everyone in the company. In particular, this model is designed to help all team members understand the impact of dilution on their options.

Employee 155

Employee IRR Startup Mexico 155

Up and Running

AUGUST 28, 2013

Having fights with partners in the first year. Worrying about dilution. Rejecting a cash offer for your company when you have almost no revenues. When you have a billion in revenues, staying focused. When you have zero revenues, staying unfocused and coming up with new ideas every day. ” He says: .

NDA 70

NDA Dallas Dilution Revenue 70

Startup Company Lawyer

MAY 4, 2009

If a founder’s company raises more than $50,000 in debt or equity financing, excluding funds from the founder, within 18 months of formation, then the founder must pay a tuition fee of $4,500, which is used to cover the Institute’s expenses in providing the program. June 23rd, 2009: Create a revenue model for your business.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Ben's Blog

AUGUST 17, 2020

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?” Multiples are not only used to value companies today but also to value companies several years down the line.

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

Both Sides of the Table

APRIL 14, 2010

Or you find out that management has been through a few rounds of dilution such that the management team only has 10-15% of the total equity of the company and as a new investor you know a priori that management is either going to quit soon after your investment or are going to ask you for a big increase in their equity package.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

MARCH 11, 2011

I thing I’ve learned over the years is that technology purists hate advertising even when it is that revenue stream that truthfully drives much of our industry. Too many entrepreneurs focus on dilution. But over-optimizing for dilution is a bad attribute relative to focusing on creating a big & winning company.

Product 350

Product Tuvalu Dilution Incubator 350

Austin Startup

MARCH 26, 2019

These strategies can be useful in increasing initial conversions from your ads and website traffic, but offering large discounts too early in the life of the company will lower your gross margins and CAC, both of which will affect your unit economics and future financing conversations. These add up very quickly.

Technical Review 49

Technical Review Software Review China Acquisition 49

BeyondVC

JUNE 11, 2007

In the last six months, we have augmented some of our existing venture financing with venture debt as the market has become quite competitive which means pricing and terms are getting more attractive for all of us. The trick for entrepreneurs is to look at bringing on debt concurrent or soon after your close of equity financing.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60

Both Sides of the Table

DECEMBER 18, 2009

The first came from the CEO of iScraper telling me that they would not be able to complete the deal – their investor, Apax Partners, had decided not to proceed despite verbal assurances that they would. I then flew from London to Los Angeles to meet with the partners of GRP. And then I got a few disturbing calls. But we did $2.1

Germany 298

Germany Entrepreneur Merger Los Angeles 298

blog.simeonov.com

FEBRUARY 22, 2010

Most partners, be they lawyers or VCs, tend to tweak the standard with their own language. However, founder agreements are not set in stone and it is common for them to be tweaked by a little or a lot during the first financing by professional investors. of the fully-diluted capitalization of the company. more details ].

Founder 44

Founder Vesting Agile Startup 44

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

MARCH 30, 2016

Mark dutifully went to partner meetings, back-channel references began, firms started calling existing VCs to “test prices” and we started debating whom our best partner would be. Here are some stats to give you a sense: • Year over year revenue grew 51% in 2015 and we’re forecasting the same again for 2016.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

maplebutter.com

JANUARY 8, 2013

What is the best advice you can give for finding a business partner? Don’t quickly choose any business partner. I would focus on one product and set a goal to generate $1M in yearly revenue from it. Outsourcing is something a big company, with a known customer / problem (that has revenue & traction) does to save cost.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

crowdSPRING Blog

DECEMBER 13, 2018

But if you want to accelerate growth and improve your revenues and profits, you need to up your game. It is a key factor in the success and prosperity of all businesses and nonprofits, regardless of their revenues. If your brand tries to be too many things at once, the message becomes scattered and the brand grows diluted.

Marketing 162

Marketing Charlotte Naming Design 162

Growthink Blog

DECEMBER 9, 2011

Josh is the CEO and Managing Partner of Detroit Venture Partners. Josh's post, entitled, "Five Disaster Moves to Botch Your Pitch" discusses 5 key blunders that he sees entrepreneurs making everyday, both when pitching him and pitching to partners and customers. Here are Josh's 5 "disaster moves" along with my commentary.

Venture Capital 102

Venture Capital Detroit Dilution Partner 102

Both Sides of the Table

FEBRUARY 14, 2016

Many experienced partners are funds have 7-10 boards and most of these will need more capital. forward revenue for SaaS businesses when in the years before it had been less than 5x. Why Financing in Falling Markets is So Damn Difficult. Plus, down rounds trigger anti-dilution provisions. This is how VCs feel.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

One Million by One Million is a global initiative that aims to nurture a million entrepreneurs reach a million dollars each in annual revenue and beyond by 2020, thereby creating a trillion dollars in global GDP and ten million jobs. This, of course, doesn’t mean that we discourage entrepreneurs to seek financing.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116

Up and Running

JULY 14, 2015

They never worked with the startup who had needed to raise multiple rounds of financing. Bigger than that was we had an operating agreement that had a non dilution clause for him and I don’t want to get into the weeds of that. What are those five levers that if they move up or down they change your revenue or your expenses?

Incubator 60

Incubator Email Startup Oregon 60

Lightspeed Venture Partners

SEPTEMBER 23, 2012

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. it also means less dilution, something that entrepreneurs should be very mindful of. It is marketed as an app for cheaters to help them hide their cheating from their partners.

Pre-Money Valuation 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

Ben's Blog

MAY 24, 2021

Editor’s Note: This testimony was delivered by a16z managing partner Scott Kupor to the U.S. By way of background, I am the Managing Partner for Andreessen Horowitz, a $16.5 Among the findings are: SPAC dilution amounts to roughly 50% of the cash ultimately delivered to the companies brought public. IPO market.

SEC 36

SEC Accredited Investor IPO Technical Review 36

Seeing Both Sides

JANUARY 13, 2015

My boss and mentor from Open Market, Gary Eichhorn , made the entire management team read it in the 1990s to hammer home its important lessons as we stumbled through the chasm on our way to scaling from zero to nearly $100 million in revenue in a few years. Financing: holy crap - we are running out of money in 6 months!

Mezzanine 20

Mezzanine IPO Finance Business Model 20