article thumbnail

Lean Startups aren't Cheap Startups

Steve Blank

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 250
article thumbnail

Advice for startups in a downturn (May 2022 Edition)

VC Cafe

Down rounds are coming. David Sacks offers a few benchmarks on growth rates (revenue), gross margins, CAC payback and burn. When looking at high growth public software companies, you’ll want to compare your ARR valuation multiple to their revenue valuation multiples because of its availability as a GAAP accounting metric.