YoungUpstarts

SEPTEMBER 16, 2015

What’s critical for entrepreneurs to understand is that valuations for startups do not increase at a linear rate; they increase geometrically based on achieving the right milestones. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation.

Valuation 100

Valuation Dilution Chicago Technical Review 100

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. What are the new financial metrics? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

The Next Web

SEPTEMBER 13, 2013

Many Asian entrepreneurs tell me that they want to raise funds from Silicon Valley firms because they perceive the valuations to be higher. 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.

Asia 132

Asia Silicon Valley India Term Sheet 132

David Teten

SEPTEMBER 23, 2017

An investor had few hard metrics other than the actual financials, and little technology to make the process scaleable. Over the past few decades, better metrics became available, and investors could take a more analytical, data-driven approach. ” Historically, investing was a manual, artisan process.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Version One Ventures

JULY 20, 2015

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. Our rule of thumb is that marketplaces at scale are valued at roughly 1x annualized GMV (typically about 6-8x annual revenue). Our assumptions for this valuation: Scale: > $1b GMV. YoY growth of at least 30%.

Valuation 60

Valuation Early Stage IPO eCommerce 60

Gust

JULY 23, 2014

So even if my own mother asked me to meet with you, and you were pitching me a biotech opportunity for a $10 million investment at a $90 million valuation, I might take the meeting, but it wouldn’t be particularly useful for either of us. Now comes the really tricky part: getting me to review all that stuff you just neatly uploaded.

Angel Investor 153

Angel Investor Elevator Pitch Pre-Money Valuation Technical Review 153

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

K9 Ventures

JUNE 5, 2015

There were massive late stage rounds because all the big funds wanted companies which already had traction. Low supply of companies with traction drove the valuations and deal sizes up. Seed stage was super tough. Valuations are rising to match. Your early stage investment portfolio may no longer really be early stage.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 16, 2014

Still… Now Slack has been valued at over a billion dollars, less than a year after launch, every month adding more than a million dollars of annual recurring revenue. What does it actually mean that metric X is better than average and metric Y is below? “It’s not fair,” we all said to ourselves.

Metrics 246

Metrics Early Stage Retention Revenue 246

Agile VC

MAY 26, 2011

In another we decended into a debate about our 5 year forecasts (I built the models so fielded most of these questions), and it became clear they probably weren’t the best fit for our Series A round (this group is no longer in the early-stage VC business). It was a pretty good valuation for the time. It was a $4.7M

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

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

Both Sides of the Table

SEPTEMBER 18, 2014

There were no metrics. Him: On metrics. Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. People seem concerned about valuation.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Berkonomics

NOVEMBER 4, 2016

Originally created in the mid 1990’s to help with the imprecise problem of how to value early stage companies, especially those in technology, I developed what soon became known as “The Berkus Method” when published in the popular book, “Winning Angels” by Harvard’s Amis and Stevenson with my permission in 2001.

Valuation 48

Valuation North Carolina Oklahoma City Silicon Valley 48

Reid Hoffman

MARCH 23, 2021

The metrics from the dashboard are the key inputs for collective decisions. You can always instrument your business and gather metrics, but that doesn’t mean the data you gather will be useful. Just track metrics that help you improve the product. The problem was that Groupon’s revenue growth was a false positive.

Venture Capital 46

Venture Capital Metrics Investment Bankers Framework 46

The Equity Kicker

JANUARY 10, 2020

Nic Brisbourne is Managing Partner at Forward Partners, the UK’s leading early-stage VC, currently supporting the UK’s next generation of AI, e-commerce and marketplace businesses. I think we differ a little from the rest of the industry, though, particularly with our focus on early stage companies.

Partner 68

Partner Early Stage Portfolio Metrics 68

Up and Running

JULY 22, 2019

A telling success factor for new businesses looking to make an impact in their industries is whether they can attract investment at an early stage of development. . Attracting investors in the early stages helps bring in new partners that are committed to your business. Start early.

Canada 78

Canada Early Stage Valuation Finance 78

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

Gust

SEPTEMBER 17, 2014

There were no metrics. Him: On metrics. Revenue multiple? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If we priced it based on any metrics your company would likely be worth less than 7 figures at your A round. People seem concerned about valuation.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

David Teten

NOVEMBER 10, 2011

This is designed to be a simple end-to-end financial model for an early-stage startup. The model outputs standard financial statements and key operating metrics based on a wide range of user inputs, and is highly customizable and entirely transparent. Download the template financial model in Excel here.

Balance Sheet 154

Balance Sheet Startup Equity Valuation 154

K9 Ventures

APRIL 9, 2014

Massive late stage rounds The late stage (Series B and Series C) investors are hunting for breakout companies that have serious traction. The low supply and high demand is driving up the valuations and deal sizes. Threshold for an IPO is higher Ten years ago, if you had $20M in revenue you were ready to go public.

Mezzanine 134

Mezzanine Seed Stage Early Stage IPO 134

www.forentrepreneurs.com

FEBRUARY 2, 2010

Business model viability, in the majority of startups, will come down to balancing two variables: Cost to Acquire Customers (CAC) The ability to monetize those customers, or LTV (which stands for Lifetime Value of a Customer) Successful web businesses have long understood these metrics as they have such an easy way to measure them.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

David Teten

DECEMBER 3, 2019

Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. Lean Case provides standard business models & metrics, so you can apply a standard approach to business planning, modeling, and profitability tracking. If you have one, please contact me. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

David Teten

FEBRUARY 9, 2015

I’ve listed below the points I recommend you cover when pitching your business to early-stage investors, including but definitely not limited to ff Venture Capital. If you are testing the market to see what terms you can get, just say, “We are targeting to raise $X at pre-money valuation of $Y.”

Venture Capital 60

Venture Capital Pre-Money Valuation Prospectus Early Stage 60

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

This is going to be BIG.

MARCH 23, 2015

So whereas seed rounds five years ago may have been less than a million dollars on a pre-money valuation of three or four million, today''s seed is up and over a million and usually closer to two million, with post money valuations nearing $10 million. You''re ending up at a post-money valuation of $10mm versus $5mm.

Post-Money Valuation 60

Post-Money Valuation Valuation Pre-Money Valuation Seed Money 60

View from Seed

JUNE 30, 2015

As a founder, I think it’s easier to talk to potential investors about where they invest across the lifecycle of a company (whether it’s truly early-stage/early lifecycle, for instance), versus round stages like seed, series A, etc. Almost all VCs actually invest across this spectrum.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. The opportunity to transact at the point of purchase increases the sheer number of revenue opportunities. Web businesses can now grow revenue before they can even afford sales people.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Up and Running

FEBRUARY 19, 2015

Use the top-left drop-down box to view different metrics, which include: % New Sessions —find out if you’ve managed to successfully target a new demographic. Again, you will see the option to use the metrics listed above (% New, Avg. It’s still in the early stages and it is the first real attempt at “social search.”

Customer 60

Customer Analytics Search API 60

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Not all startups need outside investment to grow.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Rob Go

FEBRUARY 5, 2012

Usually financial metrics are pretty sparse at early stages and investors have a hard time giving companies “credit” for steady, linear progress. Small but accelerating revenue growth (often in the $50K-$100K range monthly). 3-5 major partnerships or enterprise customers. I’m sure there are others.

Business Model 65

Business Model Seed Stage Valuation Vertical 65

Steve Blank

NOVEMBER 5, 2009

Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. What are Early Stage VC’s Really Asking? Good if you have your own money, better if the cash comes from investors, but best if it’s revenues from customers.

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

reidhoffman.org

NOVEMBER 12, 2013

Friendster’s valuation set the tone for the entire social networking space. we had no revenue. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue. And remember, LinkedIn was a consumer internet play with moderate consumer traction and without a dime of revenue.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Professor VC

AUGUST 26, 2011

To that last one, there is certainly some truth as the standard time vs. revenue chart in most business plans looks like this: Im not teaching Entrepreneurial Finance this semester for the first time since Fall 2007. What are the key drivers and metrics? Does a complicated sales build model make sense for a pre-revenue SaaS company?

Silicon Valley 35

Silicon Valley San Jose Hockey Stick Venture Capital 35

trada.com

APRIL 7, 2010

He noted that Chris Dixon ( @cdixon ) of Hunch tweeted, “New early-stage start up trend: get big quietly, so you don’t tip off potential competitors.&# Once you’re doing this you’re not optimizing your own strategy anymore, you’re optimizing against the market’s current valuation of the strategies it sees.

Stealth 40

Stealth PPC Advertising Conversion 40

Austin Startup

MAY 19, 2018

 —  @birsic So without further ado, here are my thoughts on some dos and don’ts for early stage investors. Disclose intentions early It’s not a big deal if you’re doing diligence on a competitor. Don’t boomerang founders If you have specific metrics you look for in early stage companies.

Founder 75

Founder Early Stage Software Review Deal Flow 75

Both Sides of the Table

DECEMBER 9, 2013

If you’re a venture-backed tech company or even an early-stage business fueled by angel or seed money I assume you have a good group of board members or advisors who will give you time to be helpful and they want to be helpful. Deal with company admin: 409a valuations, approve stock options, vote on key measures (15%).

Advisory Board 337

Advisory Board Valuation Stock Options Seed Money 337