ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. I call it drip-financing. Most entrepreneurs have no choice but to avail of this sort of financing along with the mentoring and the contacts that could come with it (doesn't always come along, though). Kir Devries.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

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. Instead of funding, you pay the investors a structured royalty, which is a portion of the sales. Reasons for funding. ? Royalty based investment. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

JUNE 5, 2011

Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. That’s the deal you get when you’re raising in a good market for startup financing. million post-money valuation with no revenue. That’s fine.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Austin Startup

FEBRUARY 4, 2019

L to R: Tiara Zolniez (Co-Founder & Sales), Dr. Roshawnna Novellus (Co-Founder & CEO), Alisha Griffey (COO) The Forrest Four-Cast: February 4, 2019 Fifty diverse startups will aim to impress a panel of judges and a live audience with their skills, creativity and innovation at SXSW Pitch Presented by Cyndx.

Startup 50

Startup Cofounder Technical Review Equity 50

David Teten

JANUARY 21, 2021

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? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

Hunter Walker

JANUARY 2, 2017

This keeps them aligned with their investors since a $250m exit with modest venture financing raised can be wonderful for all parties, but the same transaction can look awful if your last round was $60m on $300m pre! Next Level: Buying Customers/Revenue/Distribution. See Mint and Periscope as examples.

Technical Review 116

Technical Review Cap Table Acquisition Startup 116

Both Sides of the Table

SEPTEMBER 29, 2009

Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

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 international sales.

Finance 118

Finance Valuation Venture Capital Dilution 118

www.avc.com

SEPTEMBER 22, 2011

This "best value" can be the valuation on the last round of financing. Whatever approach you use, it should be the value of your company that you would sell or finance your business at right now. The other important data point is the number of fully diluted shares. Or it can be a public market comp analysis.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Hunter Walker

JANUARY 15, 2016

I wish I could claim I deftly foresaw this, but I was just seeking recurring revenue to to cover OneMatchFire’s office expenses. By the end of 2004 I had brought on two co-founders: John Vars – who is now the Chief Product Office at TaskRabbit, and Steven Reading took over Sales and Revenue.

Technical Review 48

Technical Review Startup Cofounder SMS 48

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

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? These are your candidates, because they are companies already absorbing much or all the marketing expense necessary to make sales of your invention. Does the average agreement call for advance payment of royalties?

IP 54

IP Intellectual Property Investment Bankers Product 54

Up and Running

NOVEMBER 5, 2018

Two essential lists: Startup costs normally include startup expenses and startup assets: Startup expenses: These are expenses that happen before you launch and start bringing in any revenue. If your cash balance drops below zero then you need to increase your financing or reduce expenses.

Cost 150

Cost Balance Sheet Startup Intellectual Property 150

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

Berkonomics

DECEMBER 20, 2018

Why are you so strongly sold on royalty licensing as the most effective way to finance a tech-based early stage company? These are your candidates, because they are companies already absorbing much or all the marketing expense necessary to make sales of your invention. Does the average agreement call for advance payment of royalties?

IP 48

IP Intellectual Property Investment Bankers Product 48

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. . Let’s start at the end.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Next Web

FEBRUARY 27, 2014

This is typically in conjunction with an upcoming financing or pending takeover offer. A competitive commodity business, or a “me too” story , will be less demanded, and hence, will require a lower valuation to close your financing. Freshman are a piece of paper to beta site (bootstrap financed—raise $50K to $500K).

Valuation 167

Valuation Forecast Seed Stage .Net 167

Up and Running

APRIL 18, 2013

Specialty finance structures have been around since the beginning of finance, but in the last several years, as bank lending remained frozen following the financial crisis, alternative financial product offerings have exploded. Equipment finance. Equipment finance is one of the most common forms of specialty finance.

Small Business 89

Small Business Finance Dilution Equity 89

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders.

Dilution 54

Dilution Equity Warrant Distribution 54

ReadWriteStart

APRIL 4, 2023

Bridget Reed, Co-founder and VP of Content, The Word Counter Yes, but Look for Restrictions Crowdfunding is an efficient and cost-effective way to raise money to finance the development of a startup. Many startup ideas can be unnecessarily set back in the eyes of other investors if the crowdfunding attempt goes sideways.

Startup 141

Startup Campaign Cofounder Venture Capital 141

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. If you are a turnaround, bankruptcy or private equity investor and have questions about the sale process, you can e-mail me at charlie@brooklynbridge.vc.

Bankruptcy 95

Bankruptcy Private Equity Seed Stage Dilution 95

Both Sides of the Table

APRIL 14, 2012

What I want to talk about today is one of the insider baseball discussions of our industry this past week: The odd fact of the $500 million financing round completed just before the company sold for a B. You just said, “nobody would take 1-2% dilution.” I am not saying all companies should be for sale. Hang on, Mark.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. Flippers financed by venture capitalists are more likely to hire executives having high level profiles and previous exit experience.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Both Sides of the Table

FEBRUARY 8, 2016

If you raised money in the past 2 years and have grown it is possible that your next round valuation might be flat (or lower) even though you have a higher revenue because investors may value your multiple differently. Optimize for a W more than % dilution in these circumstances. Founders hate them because they’re dilutive.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

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

Up and Running

APRIL 24, 2018

Of course, you will need a killer product—but, you will also need a competent growth strategy that will encompass comprehensive marketing, sales, research and development, technology, and beyond. That’s why having a revenue-minded focus from the early stages helps to secure funding.

SBIR 73

SBIR Startup Artificial Inteligence Intellectual Property 73

The Next Web

SEPTEMBER 29, 2013

You’re basically tinkering with everything at this stage – product, marketing, sales, partnerships, etc. You’re tinkering with your marketing and sales channels. It should never be the financing event that dictates whether to shift or not. You’re learning who your customers are and what they expect.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

epaley.com

MAY 6, 2013

Once financed, everyone at the startup should have a reasonable salary, but the real compensation for achieving the improbable is the equity that is typically shared between all employees proportional to the expected contribution of each person. Using revenue metric.s Instead they do $9MM in sales. Bonuses are toxic at startups.

Salary 41

Salary Startup Equity Forecast 41

ConversionXL

AUGUST 30, 2018

According to that same NNG research: Ecommerce sites can expect to double their sales. It’s likely to be related to improving revenues, reducing costs, increasing the number of new customers, increasing the sales from existing customers, or increasing shareholder value. Are sales up? What about user personas ?

Design 111

Design Framework Product Development Technical Review 111

Austin Startup

MARCH 26, 2019

You’ll usually get assigned a contact in the ad sales organization at Facebook or Google once you start spending big bucks. When is the right time to diversify your sales channel mix? Discounts too early can also have the adverse effect of diluting a brand when targeting a more affluent customer segment.

Technical Review 49

Technical Review Software Review China Acquisition 49

Business Plan Blog

OCTOBER 4, 2013

If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. Rather, give titles such as VP of Engineering, Product/Technology, Sales, Marketing, Finance, etc. Hire a diversified base of sales reps.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

blog.simeonov.com

FEBRUARY 22, 2010

If such individuals do not form a business entity to conduct business in the Field of Interest, but instead sell or assign their developments and technology in the Field of Interest to an unrelated party, I shall be entitled to [ this will vary based on the type of founder ] of the net consideration received by reason of such sale or assignment.

Founder 44

Founder Vesting Agile Startup 44

Both Sides of the Table

DECEMBER 18, 2009

We got their commitment and our existing investors bridged us until the new financing round could close. And for all of this we had no dilution and paid no money. That was our first year of sales. million in recurring revenue of which $600k came from Germany. million to see what would happen. We signed deals worth $1.2

Germany 298

Germany Entrepreneur Merger Los Angeles 298

Both Sides of the Table

MARCH 30, 2016

forward sales with some as high as 12x sales. Collectively we chose growth and the market was rewarding high growth rates over any other factor so we felt that we ought to bring in an experienced CEO who had taken companies public, who had led large, international sales organizations and who was poised to take Invoca to the next level.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. By the first quarter of 2016, the late-stage financing market had changed materially.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

maplebutter.com

JANUARY 8, 2013

I would focus on one product and set a goal to generate $1M in yearly revenue from it. Do that – nothing else but one product / company / focus and get to $1M in sales with atleast $15% net profit. 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

Occam's Razor

FEBRUARY 7, 2022

You can sign up here – I donate all revenues to charity. Oh, oh, oh, and our long-term favorite: Does online advertising on TikTok, Snap, and Hulu actually drive phone sales in AT&T, Verizon and T-Mobile stores in the real world? This blog post was originally published as an edition of my newsletter TMAI Premium. ONE BUTTON!

Analytics 101

Analytics Programming Global Campaign 101