VC Cafe

SEPTEMBER 26, 2022

Many startups that raised money in 2021 on inflated valuations that were detached from their actual value, are struggling to raise up-rounds and face difficult choices these days: down rounds, early sellout or failing altogether. A good way to think about valuation in seed/pre-seed is to reverse engineer the next round.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

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

VC Cafe

MAY 29, 2022

Snap’s stock plunged 40% last week after Evan Spigel announced the company will miss revenue targets, which raises questions about other ‘advertising powered’ social networks. Beyond growth momentum and compelling KPIs, this is where investors will search for true strategic differentiation and a path to profitability.

Venture Capital 183

Venture Capital Early Stage Valuation Startup 183

Both Sides of the Table

FEBRUARY 14, 2016

In the case of venture funding that shift was massive amounts of non-VC capital in search of higher returns and emulating the successes of Facebook, LinkedIn, Twitter plus the expectation of huge returns at Uber, Airbnb, Dropbox, etc. forward revenue for SaaS businesses when in the years before it had been less than 5x.

Valuation 150

Valuation Down Round Startup Later Stage 150

Reid Hoffman

JUNE 8, 2021

But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. We couldn’t make them whole. So we’re going to do debt.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

View from Seed

FEBRUARY 19, 2015

I called the recruiter running the search and told him I was going to step down and hire a CEO. Rob,” he said, “no offense, but you aren’t going to get a world class, been-there-done-that CEO into a company with less than $1 million in revenue. His response changed the way I thought about the CEO role for the next five years.

Founder 120

Founder Startup Cofounder Business Model 120

Reid Hoffman

JUNE 8, 2021

But now our hosts are really angry, and they have a huge revenue shortfall. And I made a decision not to do an equity round, because I thought it would be a down round. And I said, I think it’s going to be a down round, because people are scared. We couldn’t make them whole. So we’re going to do debt.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36