Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. If you’re an early stage company, that number may be zero. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. This math works in a normal market…. Laying off people?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

David Teten

SEPTEMBER 23, 2017

In venture capital in particular, early-stage companies are often operating in frontier industries, where the rules are unpredictable and conventional analytic frameworks may be misleading. The Pocket Negotiator is very early-stage attempt to aid in the negotiating process itself. . Accompany focuses on this use case.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Both Sides of the Table

JULY 27, 2014

We both agree that the later-stage valuations are being driven up to a point that feels irrationally priced [he uses b-round SaaS valuations as an example and I am willing to be even more broad based]. Most of those industries are fee-based and are competing on revenue growth. I don’t totally agree with that view.

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

The Next Web

SEPTEMBER 13, 2013

But the problem with this is that most VCs in the Valley, especially early stage ones, only like to invest in companies that are within driving distance from their offices. The rest of Asia is still developing with far more angel and early-stage investors than mid-to-later stage folks.

Asia 132

Asia Silicon Valley India Term Sheet 132

Both Sides of the Table

MARCH 1, 2016

Some LPs have privately speculated that later-stage VCs may have a field day in the next 18 months, buying up large positions in firms with strong revenue at attractive prices given the recent squeeze on funding. But of course, for every angle of the market where one person sees caution, another spots opportunities.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Both Sides of the Table

JUNE 5, 2011

The earlier you invest the higher the chances the company won’t work out and thus you pay a lower price than later-stage investors. million post-money valuation with no revenue. It was early 2000. So how exactly are prices determined? There is no great science to it. I raised my A round at a $31.5 That was market.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

View from Seed

APRIL 30, 2015

Especially in the early stages, so much about the company may change in how they think about product or go-to-market — and change multiple times — before raising an institutional round. NVV: Let’s talk about the seed stage specifically. Traction and revenue? Business model? Previous capital raised?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

K9 Ventures

FEBRUARY 8, 2020

.” IMHO this was why @cartainc had such a hard time raising in the early stages. 6/ You can only draw a straight line when you have clear signal, usually in the form of product-market-fit and user/revenue traction. This is what makes early-stage investing so much more fun and exciting for me.

Startup 118

Startup Early Stage Later Stage Revenue 118

Berkonomics

JUNE 16, 2022

We can invent lots of metrics to measure progress for a leader, including revenue, profit, employee satisfaction, cost containment, percentage of available market, and more. I prefer a financial goal, such as “achieve $20 million in revenue within five years.” What is your leadership end game goal?

Later Stage 62

Later Stage Early Stage Valuation Acquisition 62

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

Both Sides of the Table

FEBRUARY 15, 2016

If you raised $10 million at a $40 million pre-money on a company with limited revenue and if your investors are telling you that they’re concerned about your future because they doubt that outsiders will fund you at your current performance level then I would be more cautious with my burn rate – even if it means slashing costs.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Hippoland

OCTOBER 9, 2016

If you’re still in the early stages of your entrepreneur-education/journey, you may even think you need to protect your idea and not share it with anyone. revenue / traction / setting up infrastructure / etc) This can set you apart, because the vast majority of businesses I see at the seed stage are just ideas with no action.

Seed Stage 48

Seed Stage CTO Hire Email Later Stage 48

K9 Ventures

JUNE 5, 2015

I still wanted K9 to be the first institutional money in a company and work with “frighteningly early-stage” companies. As the check size increases, investors tend to look for more traction, established revenue models, proven unit-economics, and other metrics that were previously associated with later stage companies.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

OnlyOnce

MARCH 14, 2011

We all knew if the feature or function that the client was asking for was within the realm of the possible. • We were very, very focused on creating customers and revenue —We were a startup. If we drove revenue above costs, we got to take home a salary. They come in awfully handy in funding new initiatives.

Software Review 67

Software Review Development Team Review Later Stage Technical Review 67

Startup Professionals Musings

MARCH 18, 2016

Investors know that valuations at startup early stages are negotiable, but they do expect that smart entrepreneurs understand the top three elements of a startup valuation would include the following. First priority is real revenue, customers and contracts. Future revenue projections are not relevant at the pre-revenue stage.

Intellectual Property 120

Intellectual Property Valuation Pre-Money Valuation Startup 120

VC Adventure

MAY 5, 2022

BUT (and you knew there was a but here given the post title…) it’s a poor way to compare the relative performance of funds early, and even into the mid/later, stages of a fund’s life. Both were valued at greater than 50x revenue (one was, I think, 70x revenue). This is a mistake. Many will not.

IRR 116

IRR Metrics Valuation LP 116

Steve Blank

JUNE 15, 2010

Certain VC’s like the new class of Super-Angels and small VC funds specialize in the early stage of a startup where you are searching for a business model. And some larger funds that specialize in later stage deals may have a partner or two who likes to invest at this stage.

Founder 231

Founder Vesting Later Stage Early Stage 231

Both Sides of the Table

JUNE 19, 2017

Gross burn is your cost base and net burn is the difference between your revenue and costs. How Much Capital You Have Raised / Your Runway In general I recommend that in early-stage startups you try to raise at least 15-18 months of runway. If your revenue grows you can afford to increase your cost base.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

The Next Web

JULY 24, 2015

Venture capital firms are typically growth-oriented, early-stage investors looking for these proof-of-concept points before cutting a check. So, as an early-stage startup, why on earth should you consider reaching out to private equity investors, if you are not making progress with venture capital investors?

Private Equity 60

Private Equity Equity Venture Capital Early Stage 60

Startup Professionals Musings

FEBRUARY 5, 2012

You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages. Angel investors typically provide early-stage funding, while venture capital firms typically come in at later stages. Growth stage. Exit stage.

Investment Bankers 241

Investment Bankers Venture Capital Startup Initial Public Offering 241

Berkonomics

AUGUST 3, 2023

Accelerators: This relatively recent combination of coach and limited investor is available to some early-stage businesses, usually in major cities, and requires that the entrepreneurs spend from weeks to months being coached by the accelerator team. Often private equity investors will want control of the business as well.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

David Teten

SEPTEMBER 5, 2014

I’ve written on the expert network industry a fair amount in the past: see How to Earn More Consulting Revenue from Expert Networks and How Executives Can Work with Private Equity and Venture Capital Portfolio Companies. We’re not mainly for B2B companies or later stage companies or anything like that.

New York 114

New York Technical Review Networking Advisory Board 114

Berkonomics

MARCH 21, 2019

If you are a going business with a track record of revenues, then the importance of accurate current financial statements cannot be overstated. If there is no record of revenues, see the “The Berkus Method” available with any search query for valuing the business before revenues. Let’s start with the basics.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

The Equity Kicker

NOVEMBER 28, 2016

Different investors place different weights on the three elements but as a rule earlier stage investors place more emphasis on the team and later stage investors place more emphasis on the market. Some very early stage investors go as far as to say that for them team is everything.

Seed Stage 60

Seed Stage Later Stage Early Stage Partner 60

Steve Blank

JUNE 15, 2011

Today, the signs of the new bubble are the Linked-In initial public offering (IPO), Facebook’s stratospheric valuation and the rapid rise of early-stage startup valuation. Long before others, they saw that these applications could have hundreds of millions of users with “off the chart&# revenue and profits.

Silicon Valley 327

Silicon Valley Stealth Valuation Mississippi 327

View from Seed

JANUARY 26, 2016

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. Series A investors invested quite early, often before product/market fit. The entire funding progression of startups pushed out to the right.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Startup Professionals Musings

OCTOBER 13, 2010

You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages. Angel investors typically provide early-stage funding, while venture capital firms typically come in at later stages. Growth stage. Exit stage.

Investment Bankers 231

Investment Bankers Venture Capital Startup Initial Public Offering 231

cdixon.org

AUGUST 3, 2012

Some observations: - Thousands of early-stage consumer web/mobile companies were started and funded in last 24 months. A few breakout early-stage consumer hits (Instagram, Pinterest) have reached tens of millions of users in record time. Hence, many early-stage consumer startups are switching to transactional models. -

Bridge Financing 86

Bridge Financing Early Stage Valuation Later Stage 86

Growthink Blog

MAY 10, 2012

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. The five main stages include the following: 1. Early Stage Investment (Series A & B) 4. Pre-Seed Funding 2. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Gust

NOVEMBER 22, 2011

You also will find that the stage your startup is in dictates where you go to seek funding. Funding sources specialize in certain growth stages. Angel investors typically provide early-stage funding, while venture capital firms typically come in at later stages. Growth stage. Exit stage.

Venture Capital 171

Venture Capital Investment Bankers Angel Investor Initial Public Offering 171

Feld Thoughts

NOVEMBER 2, 2016

It continues to be highly dependent on company, stage, and location. At the early stages, raising the first $2m tends to be straightforward in most geographies that have meaningful startup communities. Since we are early stage investors, it simply doesn’t matter if we are a short term bull or bear.

Venture Capital 70

Venture Capital Private Equity Early Stage Valuation 70

Berkonomics

NOVEMBER 21, 2013

Early stage investors who take a chance on new businesses, often now plan their investments around the notion – or hope – that they can fund one or two rounds to lead the business to profitability. It’s entirely possible that Amazon could not be created and funded today with its planned seven years until profitability.

Later Stage 83

Later Stage Early Stage Email Revenue 83

Berkonomics

MARCH 31, 2016

We can invent lots of metrics to measure progress for a leader, including revenue, profit, employee satisfaction, cost containment, percentage of available market, and more. Email readers, continue here…] I prefer a financial goal, such as “achieve $20 million in revenue within five years.”

Later Stage 48

Later Stage Early Stage Valuation Acquisition 48

Software By Rob

JANUARY 8, 2019

Hundreds and hundreds of tweets, re-tweets, likes, Hacker News upvotes, email responses…it was immediately obvious that there is pent up demand for this kind of alternative early-stage startup funding. 2: We Focus on Early Stage SaaS. We’re a SaaS accelerator, and accelerators focus on early-stage companies.

Early Stage 46

Early Stage Valuation Seed Capital Revenue 46

ithacaVC

MARCH 11, 2016

And I think that early stage companies should take the risk and not use 409A valuations. As companies move to later stages and have meaningful revenues and profits then 409A valuations begin to make more sense. Here is the post, which focused mostly on how 409A valuations are used for stock option purposes.

Pre-Money Valuation 40

Pre-Money Valuation Stock Options Valuation Later Stage 40

View from Seed

JUNE 16, 2015

In my opinion, VCs shy away from directly answering the questions pertaining to “at what point a company is fundable” or give a generic answer regarding revenue. So, the bar will be different for each investor, and for very early stage fundraising, the goal is to find true believers more than convincing skeptics. (My

Boston 120

Boston Syndicate Syndication eCommerce 120

Rob Go

NOVEMBER 30, 2015

This is happening because many series A investors are not really investing in early stage companies any more. In fact, many of these investors are not just looking for early product/market fit, but for meaningful scale and growth. But, looking further downstream, the later stage funding landscape has been incredibly robust.

Later Stage 28

Later Stage Marketing Early Stage Ratchet 28