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

Gust

NOVEMBER 1, 2011

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI.

Venture Capital 161

Venture Capital Valuation Pre-Money Valuation Post-Money Valuation 161

Startup Professionals Musings

OCTOBER 13, 2021

It’s easy to say “yes” to one more feature request after another, until the potential for real impact gets diluted. Obsessive sales – must meet revenue goals. Otherwise, your most innovative and disruptive product thinking will be diluted and lost, killing your dream of a better world.

Dilution 334

Dilution Metrics Acquisition Revenue 334

Both Sides of the Table

SEPTEMBER 17, 2011

Still, I’ll bet that functionally you divide areas of competence like sales & marketing, product, engineering, biz dev, etc. I usually encourage people to think about titles like, “Founder & CTO&# or “Founder & VP Marketing.&#. .&# The company that wrote me this told me they were doing $4 million in sales.

Operations 292

Operations CTO Hire Startup Early Stage 292

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 Dilution Balance Sheet 150

Both Sides of the Table

NOVEMBER 14, 2017

Throughout the first year we made many fixes and saw our revenue base in these markets accelerate so we felt we were ready to attack Los Angeles, amongst the most important storage markets in the country. An example of the systems companies build are pricing & revenue management tools to best help to optimize yield.

Operations 286

Operations New York City Technical Review Startup 286

A Smart Bear: Startups and Marketing for Geeks

MARCH 1, 2010

What would a sales call look like, starting with your 30-second pitch, then dealing with skeptical questions, trying to earn this potential customer's interest, respect, and eventually money, all with only one advantage? You should go through this exercise because this skill is valuable in every sales call. Don't dilute your message.

Open Source 239

Open Source Dilution Software Developers Software Development 239

Steve Blank

APRIL 10, 2019

We slept under the tables, and pulled all-nighters to get to first customer ship, man the booths at trade shows or ship products to make quarterly revenue – all because it was “our” company. There are four problems: First, as the company raises more money, the value of your initial stock option grant gets diluted by the new money in.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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 is best not to buy your competitors – they’ll always want an unreasonable price and think of the sale as failure. It has awesome features that my main competitor doesn’t have.

Merger 276

Merger Technical Review Early Stage Dilution 276

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. Sales” is not a dirty word.

Restful 202

Restful Founder Revenue Acquisition 202

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. 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.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Startup Professionals Musings

OCTOBER 16, 2021

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. This allowed him to learn enough from all his early mistakes to hit it big ($10 million revenue) with a global beauty tools company called Tweezerman. Do you love antiquing?

Entrepreneur 304

Entrepreneur United States Dilution .Net 304

Hearpreneur

JANUARY 30, 2022

Face-to-face engagement is important, especially at vital points in the sales cycle or while creating relationships. Thanks to Adam Wood, Revenue Geeks ! #7- 21- Make more money from sales. In 2022, every business that adapted and survived the pandemic will realize the importance of increasing revenue through online sales.

Entrepreneur 119

Entrepreneur Green Technical Review Social Media 119

Up and Running

JULY 1, 2020

You may grow to tap new markets or increase sales in your current markets. It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling. Will marketing for the expansion dilute marketing of your brand or other products?

Business Plan 152

Business Plan Forecast Operations Dilution 152

YoungUpstarts

SEPTEMBER 16, 2015

Raise too much capital at any given stage and suffer more dilution than is necessary – obviously not ideal. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation. It’s part art, part science. Set Quantifiable Goals.

Valuation 100

Valuation Dilution Chicago Technical Review 100

Both Sides of the Table

JANUARY 4, 2014

– while the other might want a quick sale and pocket some bucks while the tech market is hot. It either needed to get more aggressive in pricing, pivot to a new business or business model or raise more capital (and take the dilution) in order to have more time to figure things out. Those are the easy cases.

Founder 340

Founder Cofounder Sacramento Technical Review 340

Both Sides of the Table

JUNE 17, 2017

The most obvious way to explain this is with sales people. If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. The Nature of Revenue Matters Of course revenue alone won’t tell you enough.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Both Sides of the Table

APRIL 27, 2010

But in our first year of sales (and those were really shitty years to be selling software) we sold $2.1 and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue. I learned about revenue recognition. I learned how to establish sales targets and how to manage a sales pipeline.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

YoungUpstarts

MAY 31, 2016

The single biggest reason that the average company struggles or even fails is due to their lack of focus and dilution of their greatest resource, which are people. He has helped grow Medtronic’s Surgical Technologies ENT/NT division from $100 million to approximately $2 billion in annual revenues over fourteen years.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

Both Sides of the Table

MAY 7, 2016

The founders and team develop a huge confidence level that appropriately increases risk-taking, output, expansion, deals, revenue, press and everything that is a consequence of initial successes. Or some teams who start driving revenue paper over the fact that they aren’t acquiring customers profitably. Everything seems possible.

Churn Rate 150

Churn Rate Vesting Dilution Europe 150

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

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

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. Traction and revenue? NVV: Is there any dilution? Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

YoungUpstarts

MAY 6, 2019

What market are you targeting and how are you going to get sales? 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 101

Startup Technical Cofounder Merger Early Stage 101

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. You’ll be inundated with sales pitches, lame template emails, unsolicited voicemails and more. Know when to say “no.”.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

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. million post-money valuation with no revenue. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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. And lately we've seen some of that fall off as brands have pulled back a little bit because they're seeing that, yeah, it's great for eyeballs, but maybe it's not always driving the sales they want to see.

B2B 79

B2B Marketing B2C Community 79

Startup Professionals Musings

DECEMBER 12, 2018

These are usually characterized as owner-operated, with five employees or less, and less than $250,000 in sales. This allowed him to learn enough from all his early mistakes to hit it big ($10 million revenue) with a global beauty tools company called Tweezerman. Do you love antiquing?

United States 244

United States Dilution .Net Small Business 244

Both Sides of the Table

JULY 16, 2013

Because at least while the VC spigot is open and flowing for high-potential individuals that fit a pattern that some VCs seem to favor they can access cheap capital that isn’t terribly dilutive and can use the to fund development and swing for the fences with limited focus on monetization. And the dilution that goes with it.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

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 Bootstrapping Incubator 115

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Production or service is the business’s core activity, which generates revenue. Marketing and sales are how you reach and sell to your target market. A business is an organization that produces goods or services for profit.

Technology 132

Technology Venture Capital Finance Startup 132

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

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

Both Sides of the Table

DECEMBER 18, 2009

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. We signed deals worth $1.2 million over 2 years that made us profitable in Germany from day 1. Any customer not willing to commit we didn’t sign. But we did $2.1

Germany 298

Germany Entrepreneur Merger Los Angeles 298

Hunter Walker

JANUARY 2, 2017

Next Level: Buying Customers/Revenue/Distribution. For example, you would say “oh, sure this startup spends 5x LTV to acquire a new customer but once we plug them into our sales channel, it’ll drop to.25x It could lower earnings because of continued investment and share dilution. See Mint and Periscope as examples.

Technical Review 115

Technical Review Cap Table Acquisition Startup 115

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