Startup Professionals Musings

JULY 16, 2012

A while back I heard a talk by Dave McClure, a long-time angel investor, who also proclaims to be one of the “new breed” of venture capitalists in Silicon Valley, as CEO of 500Startups , which is either a micro-VC seed fund, or a startup incubator, or both. For VCs, early-stage means customer revenue is less than $10M.

Early Stage 253

Early Stage Finance Seed Stage Entrepreneur 253

Steve Blank

SEPTEMBER 14, 2009

3) invest in and take equity stakes in exchange for capital. Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability.

Silicon Valley 223

Silicon Valley IPO Technical Review Venture Capital 223

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. Whether it is credit or equity, funding is very, very tight. I call it drip-financing. In 1M/1M, our preferred financing strategy is customers. Because customer financing equals revenue, not equity.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

The Equity Kicker

MAY 9, 2016

It’s a great romp through the history of entrepreneurial ventures and how they were financed – starting with loan deals brokered in coffee shops and ending with the PC boom which established venture capital as an asset class in 1970s and 1980s. We focus on ecommerce and marketplaces.

Silicon Valley 60

Silicon Valley Venture Capital eCommerce Startup 60

Startup Professionals Musings

SEPTEMBER 27, 2013

Many entrepreneurs are convinced that banks are not worth the effort for startups, especially early-stage ones that still don’t have a revenue stream, or collateral to back up their financing needs. This question gets to the heart of what bank financing is and isn''t supposed to accomplish. Bankers do not contribute equity.

Silicon Valley 187

Silicon Valley Equity Entrepreneur Finance 187

Austin Startup

NOVEMBER 6, 2017

C-Corp largely because (i) VCs have historically favored C-Corps for nuanced tax and other reasons, and (ii) virtually all of the standardized legal infrastructure around startup finance and equity compensation assumes a C-Corp. However, times are changing. But not all VCs think that way. It requires real financial, tax, legal, etc.

Delaware 48

Delaware LLC Startup Silicon Valley 48

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. million in revenue. The business is already profitable with $2.9

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Gust

JULY 8, 2012

A while back I heard a talk by Dave McClure, a long-time angel investor, who also proclaims to be one of the “new breed” of venture capitalists in Silicon Valley, as CEO of 500Startups , which is either a micro-VC seed fund, or a startup incubator, or both. For VCs, early-stage means customer revenue is less than $10M.

Early Stage 177

Early Stage Finance Seed Stage Entrepreneur 177

Startup Professionals Musings

SEPTEMBER 30, 2010

Many entrepreneurs are convinced that banks are not worth the effort for startups, especially early-stage ones that still don’t have a revenue stream, or collateral to back up their financing needs. This question gets to the heart of what bank financing is and isn't supposed to accomplish. Bankers do not contribute equity.

Silicon Valley 201

Silicon Valley Early Stage Startup Equity 201

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. And there absolutely are more investors than there are good deals.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. And there absolutely are more investors than there are good deals.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

APRIL 25, 2011

There’s a line of thinking in Silicon Valley that you should build product businesses rather than services businesses. It’s nearly impossible to get a services company financed by VCs. It’s how things are done across the country outside of Silicon Valley. You’re a small fish.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Startup Lessons Learned

JUNE 22, 2020

The Economic Antidote to COVID-19 Eric Ries & Ryan Beck In 2001, Apple's revenue fell by 33% in the depths of the dotcom bust. As revenue contracts, orders slow, and capital markets freeze, conventional wisdom drives business leaders to cut costs and shy away from new projects. The rest is history. That isn’t a coincidence.

Silicon Valley 60

Silicon Valley Equity Stock Finance 60

Startup Professionals Musings

MAY 1, 2011

Recently I heard a talk by Dave McClure, a long-time angel investor, who also proclaims to be one of the “new breed” of venture capitalists in Silicon Valley, as CEO of 500Startups , which is either a micro-VC seed fund, or a startup incubator, or both. For VCs, early-stage means customer revenue is less than $10M. Super Angels.

Early Stage 231

Early Stage Seed Stage Angel Investor Silicon Valley 231

www.lanceglasser.com

MAY 13, 2012

Finance and budgeting. Customer Equity. Silicon Valley melting pot. The CFO is not responsible for making revenue every quarter, but if there is a big surprise, fire him. Business Essays, Blogs, and Musings. A Model for Return on Engineering Expenses. Growth, Profitability, and the Stock Price. Let the Games Begin!

CTO 40

CTO CTO Hire Technical Review Architecture 40

Austin Startup

AUGUST 20, 2017

They’re looking to be paid properly in the context of the overall salary structure, including cash, benefits, and equity, and to be paid commensurate with performance. Messy cap tables can come back to haunt you when you do a financing or sell the company. That will keep the Silicon Valley wags buzzing for some time to come.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Both Sides of the Table

MARCH 11, 2010

I’ve even heard people repeat this bullsh*t Silicon Valley mantra about “failing fast&# which is horse puckey. Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. Your revenue will take longer to ramp then you think. add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

ReadWriteStart

DECEMBER 16, 2010

Jimmy already has about 65 customers and about a million dollars in annual revenue. The company is profitable and has so far raised only $400,000 in friends and family and angel financing. Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. You can register for the next roundtable here.

Senegal 117

Senegal Nevada Bootstrapping Silicon Valley 117

ReadWriteStart

APRIL 7, 2011

This is our first major partnership with an incubator whereby MAD will adopt the 1M/1M methodology to foster Silicon Valley-style technopreneurship in Malaysia. Also, the business is primarily on CD-ROMs right now, but the good news is that the CD-ROM product is selling and generating revenue.

Malaysia 114

Malaysia Incubator Silicon Valley Entrepreneur 114

Austin Startup

JUNE 1, 2018

million in convertible notes from our prior round which converted into equity alongside this new $2.5 How most SaaS Companies should be funded Earlier this year, I considered raising a typical Silicon Valley series A. It was clear that Silicon Valley VCs are looking to invest in rocketships. million round.

Silicon Valley 48

Silicon Valley SEC Venture Capital Angel Investor 48

Agile VC

FEBRUARY 2, 2012

I’ll focus for now on the business itself, there’s plenty of other info on the web if you care to understand the equity ownership or financing history of Facebook and frankly this has been fairly well known for awhile. ==. Financial Snapshot : 2011 Revenue: $3.71 2011 YoY Revenue Growth: 88%. Facebook, Inc.

IPO 100

IPO South Korea Venezuela Revenue 100

ReadWriteStart

OCTOBER 14, 2010

At today's roundtable we had some intensive discussions around market sizing and its impact on financing. These are areas that may be gaps in the portfolio of large companies, and are perfect for M&A deals in three to five years after building enough validation and $10-$20 million in revenue.

Bootstrapping 114

Bootstrapping Marketing Angel Investor Silicon Valley 114

www.mint.com

MARCH 9, 2010

If the answer to the question centers around “We will achieve revenue soon so our net will improve and give us more runway,” it means the company is in trouble because no product ever ships on time nor achieves the company’s “conservative forecast.” These days revenue is the best source of capital. Who is on your board of directors?

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

ReadWriteStart

MAY 26, 2011

Finally, we had a discussion on Adam's proposal to sell 20% of his equity for $50,000, which I thought was preposterous. Adam needs a crash course on financing and should go digest the 1M/1M curriculum module on that topic ASAP. Of course, this needs to be validated. That's like selling your prized assets for nothing in a flea market.

Affiliate 117

Affiliate India Nevada Silicon Valley 117

Lightspeed Venture Partners

DECEMBER 10, 2012

Revenue is driven by children’s parties, which cost $600-$4,000 for a two hour party for 15 kids, which apparently is the market price for kids parties in LA. The space can host 6-9 parties per weekend, and they generated $350,000 in revenue last year. As O’Leary said, this isn’t an equity investment.

Covenant 162

Covenant Warrant Southern California Los Angeles 162

Duct Tape Marketing

JUNE 20, 2023

12:22] Would you look at the value derived by digital technologies differently than by producing customer value or revenue? [14:23] And that really is like the guide for corporate finance executives on how to value a company. 16:32] Are there organizations that are significantly behind in this rewiring ? They were the same mm-hmm. ,

Technical Review 66

Technical Review Silicon Valley Generative AI Arizona 66

Eric Friedman

AUGUST 18, 2021

[They talk about] businesses which are not contractually recurring revenue in the parlance of recurring revenue run rates. They conflate flow businesses or they conflate usage-based businesses with contractual, recurring revenue businesses, and so on. On Leaving Silicon Valley Bank. That scares me.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

www.readwriteweb.com

OCTOBER 18, 2010

These are areas that may be gaps in the portfolio of large companies, and are perfect for M&A deals in three to five years after building enough validation and $10-$20 million in revenue. So, please note the TAM Analysis is a vitally important aspect of building any financing strategy.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52

www.readwriteweb.com

OCTOBER 18, 2010

These are areas that may be gaps in the portfolio of large companies, and are perfect for M&A deals in three to five years after building enough validation and $10-$20 million in revenue. So, please note the TAM Analysis is a vitally important aspect of building any financing strategy.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52

Professor VC

JUNE 20, 2011

The last blogger in Silicon Valley. Financing, that is.I One truth of start-up financing is that it generally takes twice as long and twice as much money to accomplish your milestones. Most companies dont come close to their rose colored financial models prepared when going out for Series A financing. ProfessorVC.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

Austin Startup

JUNE 26, 2019

I recruited a top-flight engineer and serial entrepreneur to build our MVP, on equity?—?and Our venture was selected for competitive accelerator spots & recognition from media and mentors from Austin, Chicago and Silicon Valley to work on this problem and capture the value its solution provided. It was a compliment.)

Silicon Valley 54

Silicon Valley Startup B2C Sweat Equity 54

SoCal CTO

DECEMBER 1, 2010

Equity-Only CTO and Equity-Only Developers - SoCal CTO , November 1, 2010 I had a recent email dialog with the founder of a company looking for a CTO for their startup. Finance, IT, Legal). The Proof Is In The Revenue. Build Your Own Silicon Valley? It may be that all the doomsayers are right. So what gives?

Technical Review 175

Technical Review Technology Product CTO Hire 175

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

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. Ironically, Carreyou is not a Silicon Valley-focused reporter, and the success of the piece served as a wake-up call for other journalists who may have been struck by Unicorn fever. The typical Silicon Valley term sheet does not include such terms.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Up and Running

MAY 23, 2016

In fact, SaaS industry revenue is projected to grow from $49 billion in 2015 to $67 billion in 2018, a compound annual growth rate of approximately eight percent. At this stage, simply list your primary revenue streams and your key expenses. At this stage, simply list your primary revenue streams and your key expenses.

Software Review 74

Software Review Software Delaware Forecast 74

maplebutter.com

JANUARY 8, 2013

I would focus on one product and set a goal to generate $1M in yearly revenue from it. Outsourcing is something a big company, with a known customer / problem (that has revenue & traction) does to save cost. If you believe in it – then finance whatever you can yourself. Once you’ve done that – then. do something else.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Startup Lessons Learned

AUGUST 10, 2020

And then you fast forward a couple of weeks, I live here in Santa Clara County in Silicon Valley, which actually I think had one of the first cases or one of the- Eric Ries : Of community spread, yeah. But then by my second year, I had a real interest in finance. You’ve got to build equity value." We were based in Boston.

California 60

California Silicon Valley Framework China 60