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. Gross burn is the total amount of money you are spending per month.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

SoCal CTO

SEPTEMBER 27, 2011

I've talked about this topic before in How Investors Think About Valuation of Pre-Revenue Startups. The reality is that an early employee in a pre-funded startup that eventually raises a few rounds of capital will be diluted significantly, is down the line in preference, and will likely be locked up for a while to harvest it.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

This is going to be BIG.

JANUARY 18, 2024

They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. They may have just exited a business or maybe they’ve just been managing their own money, which isn’t a full-time job for most people. Can they lose this money?

.Net 88

.Net Cap Table Startup Technical Review 88

Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. It meant that the management teams hadn’t figured out a product / market fit for their own businesses. Many investors and management teams panic and get stranded without cash. Want to sell early?

Merger 276

Merger Technical Review Early Stage Dilution 276

ReadWriteStart

JANUARY 27, 2011

I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. Jeff has managed to keep his burn rate very low thus far, and a slow and steady crafting of the business is working nicely. million in revenue.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

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. These usually play a role in the very early stage of your business, primarily pre-revenue. Reasons for funding. ? Incubators and Accelerators. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Up and Running

JULY 1, 2020

Business owners and managers make optimistic assumptions about a project’s success when they are emotionally committed to an idea. For example, I was the Program Manager for a group of investment advisors at a financial institution that had banking branches in a rapidly growing region. Pausing to ensure profitability.

Business Plan 152

Business Plan Forecast Operations Dilution 152

Both Sides of the Table

JANUARY 4, 2014

I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. He felt the CEO was willing to “sell his soul” for revenue and wanted things to be more pure.

Founder 340

Founder Sacramento Cofounder Technical Review 340

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 26, 2019

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. Find and focus on one reliable distribution mechanism before diluting your time diversifying. If the business is young, this is inevitable.

Restful 202

Restful Founder Revenue Acquisition 202

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

YoungUpstarts

MAY 6, 2019

by Arsalan Sajid, startup community manager at Cloudways. How much revenue are you generating on an annual basis? If you are getting funded for the first time, which means that you have not diluted the shares of your company, you will be receiving Series A funding. These partnerships need to bring in more revenue.

Startup 113

Startup Technical Cofounder Merger Early Stage 113

YoungUpstarts

JUNE 13, 2011

years, and had reached an average revenue level of $60 million with the range being from $5 million to $350 million. Too much growth too quickly can create financial, quality, and reputational risks that if not properly managed can lead to the demise of the business. Managing cash flow. Growth is like Mother Nature.

Indianapolis 219

Indianapolis Minneapolis Kentucky Virginia 219

Gust

OCTOBER 18, 2011

It is one of the most useful methods for establishing the pre-money valuation of pre-revenue startup ventures. in the case of one investment round, no subsequent investment and therefore no dilution). Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in The Dave Berkus Method.

Valuation 174

Valuation Pre-Money Valuation Southern California Post-Money Valuation 174

View from Seed

APRIL 30, 2015

Below, we talk to Glen Mello , Managing Director of Silicon Valley Bank’s accelerator team in Boston. Traction and revenue? Typically, the gross margins aren’t there compared to software, so revenue isn’t quite as important in the early stages of getting to market. NVV: Is there any dilution? Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

JUNE 17, 2017

70–80% of the costs of most startups are employee costs so what you’re really talking about when a company is unprofitable is that they are growing their staff ahead of their revenue. Revenue When I look at an income statement I start by focusing on the revenue line. You need to understand the “quality” of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Hearpreneur

JANUARY 30, 2022

Thanks to Adam Wood, Revenue Geeks ! #7- The We Working system will eliminate the need for human managers to organize teams and monitor performance because it is powered by autonomy and trust among peers. . With rising costs due to inflation, more businesses are laser-focused on revenue than ever before. 7- Start outsourcing.

Entrepreneur 124

Entrepreneur Green Technical Review Social Media 124

The Startup Magazine

MARCH 30, 2022

Growth financing can also be described as revenue-based financing, which essentially allows you to upfront your annual recurring revenue (ARR) and make it available right now, rather than forcing you to wait weeks or months until your end-of-year earnings are accessible. A quick overview of growth financing. The advantages.

Finance 138

Finance Dilution Green Revenue 138

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

Ben's Blog

APRIL 1, 2011

By far the most difficult skill for me to learn as CEO was the ability to manage my own psychology. It’s like the fight club of management: The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown. No training as a manager, general manager or any other job actually prepares you to run a company.

Management 78

Management Cap Table Balance Sheet Bankruptcy 78

YoungUpstarts

OCTOBER 16, 2016

But entrepreneurs face other concerns that compete with this growth focus, including hiring, maintaining current revenue sources and distinguishing themselves from the competition. Manage cash flow. But take it from what a good friend and advisor once said to me: “Ego is dilutive to net worth.”. Hell or high water.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

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. VC’s fund their salaries and operations through management fees, which typically equal 2% per year.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. That's why, I advised Gio to keep going with further execution on his business and build more revenue traction.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

YoungUpstarts

SEPTEMBER 8, 2020

That value is diluted if there are strings attached. Her life coaching practice focuses on teaching active people how to have complete freedom and self control around food by helping them manage their minds and emotions. Realize that a Podcast is a Long-Term Play. Generally, podcasts are not a quick return kind of marketing tactic.

Dividend 195

Dividend Audience Dilution Incubator 195

The Startup Magazine

JULY 1, 2022

Production or service is the business’s core activity, which generates revenue. Finance is how you manage your finances, including budgeting, accounting, and bookkeeping. Equity financing can give you a lot of cash upfront, but it can also dilute your ownership stake in your company. How To Manage And Grow Your Company.

Technology 139

Technology Venture Capital Finance Startup 139

www.avc.com

SEPTEMBER 22, 2011

The other important data point is the number of fully diluted shares. The first bracket is the senior management team; the CFO, Chief Revenue Officer/VP Sales, Chief Marketing Officer/VP Marketing, Chief Product Officer/VP Product, CTO, VP Eng, Chief People Officer/VP HR, General Counsel, and anyone else on the senior team.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Berkonomics

APRIL 26, 2018

Any disruption to the tedium of daily activity from weather, disaster, revenues slowdown or product problems will stress the company infrastructure if there is not a cushion to use during such times. Stress of this type always forces you or senior management to lose focus upon strategic issues and drop into day-to-day tactical mode.

Dilution 90

Dilution Acquisition Early Stage Book Value 90

ReadWriteStart

APRIL 4, 2023

Too many lenders to keep track of makes it hard to manage the various people who have a stake in your venture and their different expectations. Lorien Strydom , Executive Country Manager, Financer.com No, Beware the Double-Edged Sword Crowdfunding is a double-edged sword because of its public nature. However, they are time-consuming.

Startup 141

Startup Campaign Cofounder Venture Capital 141

Duct Tape Marketing

OCTOBER 11, 2023

But what the dilution, if you bring it down to it that even creator entertainers and educators have in common is it's this human element. So they've got a secondary line of revenue and they're driving customer loyalty, customer education within the product, but the actual users, end users of their product. So it's this twofold.

B2B 80

B2B Marketing B2C Community 80

Startup Professionals Musings

JULY 20, 2018

He speaks from years of experience as director of an advanced management program for global executives. The results in a dilution of their focus, doing many things poorly, and losing sight of key markets and key competitors. Leverage seismic shifts in the market or economy.

Dilution 149

Dilution Global Technology Leadership 149

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. For VCs working for funds that have a lot of money under management, the incentive is to encourage companies to grow quickly. The VC focus on quick growth is not without reason.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. For VCs working for funds that have a lot of money under management, the incentive is to encourage companies to grow quickly. The VC focus on quick growth is not without reason.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

APRIL 14, 2012

Is your crappy little 12-person company really worth they and their shareholders diluting by 2% given more than a decade they’ve put in building one of the Internet’s most solid business social networks? You just said, “nobody would take 1-2% dilution.” They’re worth $11 billion as of today. Hang on, Mark.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Austin Startup

NOVEMBER 12, 2017

Is third-year revenue of $10M good or bad? Large deals take the same management time and attention as smaller ones and are a better use of partner resources. Those milestones may be revenue, profit, product release, signed partner agreements, key hires, or any other steps that show a venture is achieving liftoff and is ready to scale.

Term Sheet 48

Term Sheet Technical Review Due Diligence Merger 48

ConversionXL

NOVEMBER 6, 2017

What works for first-time customers might have less of an effect on (and be diluted by) people who are returning to buy again. Because if you can’t implement (or it is prohibitive to do so), then testing a context-specific treatment is useful intelligence, but not revenue-positive.”. Conclusion.

Chad 112

Chad Mobile Technical Review Aggregator 112

Berkonomics

JUNE 5, 2014

Yet, at the pre-revenue stage of development, angel investors price both companies at a pre-money valuation of $1.5 But, the working capital and management team necessary to grow a company quickly to sufficient revenues to justify a $200 million valuation will require raising lots more capital. It doesn’t seem right, huh?

Pre-Money Valuation 92

Pre-Money Valuation Valuation Angel Investor Dilution 92

Tim Keane

JANUARY 12, 2010

Good investors use the valuation discussions to gauge the business savvy of the management team and to understand their ability to appreciate and deal with economic market forces that set values.   For individual angels and others investing their own money, this may be more fluid than for someone with responsibility for a managed fund.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Magazine

JULY 4, 2018

Every business owner wants to grow their revenue, but scaling up your business can be a major challenge. A strategy that can make marketing more manageable is to deploy a marketing automation platform. Scaling up as your business grows can be challenging, but technology tools can help make the task more manageable.

Artificial Inteligence 70

Artificial Inteligence Azure Cloud Campaign 70