Both Sides of the Table

DECEMBER 11, 2022

We had nascent revenues, ridiculous cost structures and unrealistic valuations. I was in it for the love of working with entrepreneurs on business problems and marveling at technology they had built. In stead of growing revenue and holding down costs and building great company cultures the market chased valuation validation.

Valuation 466

Valuation San Francisco Ratchet Liquidation Preference 466

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Steve Blank

MARCH 16, 2016

VC’s raise money from their investors (limited partners like pension funds) and then spread their risk by investing in a number of startups (called a portfolio). BTW, Angel investors do not have limited partners, and often invest for reasons other than just for financial gain (e.g., If so, how is the revenue measured?

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. But should they? Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Both Sides of the Table

APRIL 14, 2010

It’s meant to be a bit provocative but the reality is that I give this advice to entrepreneurs all the the time and I usually leave the “e&# off of the end. I normally offer this advice in the capacity of really wanting to help entrepreneurs so please bear with me. Let’s say the company had raised $15 million.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

K9 Ventures

JUNE 5, 2015

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. Moving up stream is a natural evolution of a venture fund, especially as you get more money and more partners. Implications for Founders.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Both Sides of the Table

NOVEMBER 4, 2009

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X&# or not. BTW, this ignores liquidation preferences which actually mean you’ll earn less. Ventro was trading at $8 billion on sub $2 million of revenue. Let’s face it.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418