Up and Running

JULY 14, 2015

Any investor will put their valuation on your business based on a number of factors, including looking at important metrics for your business, patents, or assets. But raising too much money will cause the valuation to increase. Let’s say the valuation an investor puts on your business is $2 million.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

Hunter Walker

AUGUST 7, 2017

While you should expect these sorts of hires to take below market cash comp versus what Google is paying them, this tradeoff needs to be replaced with equity upside. Since Homebrew typically leads/co-leads seed rounds, we assist in helping founders design and manage their pool against their hiring forecast.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

Both Sides of the Table

MAY 19, 2010

Founded in November 2007 in New York City by Alexis Maybank and Kevin Ryan (co-founder of DoubleClick); CEO is Susan Lyne (ex-CEO Marta Stewart Living Omnimedia) Revenue estimates: $50mm in 2008; $170mm in 2009 (versus budget of $150mm); $450mm forecasted for 2010. Note that these are “gross” revenue numbers.

Partner 240

Partner New York City Cofounder Syndicate 240

YoungUpstarts

MAY 17, 2019

For the good ones, challenge them to help grow the company and incentivize them to stay through promotions, profit sharing, or equity. Use the cash forecast in the report to secure better terms on your business loan or lock the owner into seller financing. Firing bad employees will make the good ones optimistic of a turnaround.

Due Diligence 185

Due Diligence Forecast Deal Structure Valuation 185

YoungUpstarts

SEPTEMBER 15, 2018

Startup valuation, under no circumstances, can be described as a simple affair. The pre-money valuation of other startups is based on the following factors. It is important for businesses to be duly evaluated because it’s the valuation of businesses that actually go on to draw investors. Importance of Evaluating your Startup.

Pre-Money Valuation 124

Pre-Money Valuation Valuation Sweat Equity Startup 124

The Next Web

FEBRUARY 27, 2014

One of the questions I get, more often than not, is what is the appropriate valuation of my business. your equity in a hot new patented technology business), the higher the demand (e.g., multiple interested investors competing for the deal, and driving up your valuation in the process). The more scarce a supply (e.g.,

Valuation 167

Valuation Forecast Seed Stage .Net 167

The Equity Kicker

DECEMBER 2, 2015

Mahesh Vellanki from Redpoint put up an interesting post yesterday about ecommerce valuations. revenues because growth is much lower – forecast at 5-7% next year, and their EBITDA margin is 8%. As you can see from the chart above, in Mahesh’s sample most of the companies have revenue multiples in the 1-2x range.

Forecast 60

Forecast eCommerce Net Present Value Revenue 60

ReadWriteStart

JANUARY 28, 2022

With the rise of startups and growing businesses , it has become more critical for investors to have a thorough understanding of equity to be aware of all of the advantages they are receiving from the companies they have invested in. What is Company Equity? Types of equity. Common stock. Preferred shares.

Valuation 108

Valuation Equity Warrant Common Stock 108

Berkonomics

MARCH 21, 2019

Careful about “hockey stick” forecasts. Email readers, continue here…] Most VC’s look for a 10x opportunity – that is – a ten times increase in the valuation from investment to liquidity event. The more you ask for – the more equity you give up. Here’s a valuation example for you based on amount to be raised.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Tim Keane

MARCH 9, 2011

How to prepare a sales forecast for a business plan » March 09, 2011. This seems like an easy topic – debt where there is appropriate cash flow, equity when there isn’t.    And, while debt is less costly than equity, it can bankrupt a company more quickly than more expensive equity might.

Finance 83

Finance Bootstrapping Startup Equity 83

Startup Professionals Musings

FEBRUARY 13, 2016

How big is the funding request, and how much equity will you give? Justify funding requirements, use of funds and specify a current valuation estimate. Quantify founder investments, both cash and sweat-equity. What are your forecasts for revenue, expenses and cash flow?

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Cracking the Code

MARCH 12, 2010

So, here is the first edition, including the recent Q4 2009 earnings and the updated 2010 forecast. If we consider that 2009 was probably the worst year in the past 5 years, forecasting the same growth for 2010 is not very encouraging. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation.

Software Review 63

Software Review Technical Review Cloud Forecast 63

Startup Professionals Musings

AUGUST 7, 2015

This allows them to calculate burn rates, break-even points and forecast the company valuation over time. No investor pitch should end without asking for a specific amount of money, providing some details on how that money will be used and what equity in the company you are offering in return.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

AUGUST 13, 2012

Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. Include a current valuation estimate. Financial forecast and metrics. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Austin Startup

OCTOBER 4, 2017

This means that an increase in overall value should normally offset the loss of additional equity paid out. Discounted cash flow models and complex valuations (e.g. monte carlo forecast simulations) are utterly, utterly useless. Overall, don’t let fundraising intimidate you and be sensible about your choices with equity.

Dilution 59

Dilution Valuation Equity Balance Sheet 59

The Next Web

MARCH 2, 2014

This process included several rounds of financial forecasting to understand the cost of achieving where we wanted the business and brand to be, and whether we could pay for that cost ourselves. Should we finance with debt or equity? What are the main considerations when exploring third-party investments?

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

The Equity Kicker

APRIL 11, 2012

Valuation has been increasing rapidly and the deal likely won’t get any cheaper (Sequoia and other VCs who invested last week at a $500m valuation would likely want more than 2x if they stayed in for any length of time). 1bn values Instagram at $33 per user, which compares with $118 on Facebook (assuming a $100bn IPO).

IPO 110

IPO Valuation Forecast Acquisition 110

The Equity Kicker

OCTOBER 9, 2014

I knew that Zulily , which Crunchbase describes as ‘A daily deal site for mums, babies and kids’ is an amazing ecommerce success story which IPO’d last year with a valuation in the billions. As you can see from the chart below they went from a standing start in Q4 2010 to a forecast $1.1bn in net sales last quarter.

eCommerce 98

eCommerce Flash Forecast IPO 98

David Teten

AUGUST 7, 2019

than comparable companies in the same sector that raised at a higher valuation. But if they’re so competent, aren’t they going to negotiate up the valuation to take advantage of their known status, up to the highest possible point? THEREFORE: we don’t need to be valuation-sensitive. LTV / CAC, revenue growth, etc.)

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Startup Professionals Musings

MAY 13, 2011

Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. Include a current valuation estimate. Financial forecast and metrics. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Steve Blank

APRIL 1, 2020

Forecasted recovery date. Sales pipeline/forecast. Others are cutting their valuations. Award equity to employees equal to the value of their reduced salaries. Shelter in place yes/no? Health of Your Current Target Market(s). Actively buying? Not returning calls? Out of business? Emergence of New Market(s).

South Korea 333

South Korea Salary Business Model China 333

The Equity Kicker

MARCH 7, 2016

But as deals get bigger analysis of forecasts and the financial impact on the acquirer become much more important. Also very important to note is that the number of acquisitions declines precipitously as the valuation rises. Moreover, much is driven by luck in this industry and individual counter-examples abound.

Acquisition 60

Acquisition Intellectual Property Investment Bankers Valuation 60

The Next Web

FEBRUARY 19, 2014

Initially, a trade sale to a private equity firm or a trade buyer seemed a good choice for shareholders, and the one with the least unknown factors. Invest in your forecasts. If you go down the IPO route, you will need to provide the market with forecasts on your business. What will give you the best valuation for your business?

Prospectus 121

Prospectus IPO Exit Strategy Private Equity 121

The Equity Kicker

OCTOBER 10, 2012

HR software business Workday has just upped the proposed share price in its coming IPO to $24-26, taking its valuation over $4bn. That’s 30x this years forecast revenues of $134m.

Valuation 108

Valuation Acquisition Forecast IPO 108

The Equity Kicker

SEPTEMBER 8, 2015

For very young companies the forecasts should show this level of growth, whilst companies at Series A or later will have to have shown this level of growth in the past as well as in their forecasts. This means that founders who want to grow as fast as AirBnB should be growing at well over 3.2x in their early years.

Hockey Stick 60

Hockey Stick Forecast Startup Valuation 60

Up and Running

AUGUST 21, 2017

It’s understandable, then, that the term “unicorn” has come to be used routinely in the world of business funding to refer to those rare and beautiful privately funded startups—especially in the tech space—that have reached the upper echelon of valuation, being valued at over $1 billion. at around 27 million.

Silicon Valley 86

Silicon Valley Venture Capital Valuation Later Stage 86

The Equity Kicker

MAY 2, 2012

They have yet to start monetising their mobile traffic and it is growing really fast – therefore if you believe they will succeed in wringing cash from mobile then you are a long way towards believing their financial forecasts and their rumoured $100bn valuation.

Mobile 113

Mobile Forecast IPO Valuation 113

VC Cafe

SEPTEMBER 26, 2022

For more about forecasting growth in these uncertain times, check out Sequoia’s “ Adapting to Endure ” presentations published in May 2022. ValuatIon should be a function of value, not ego. Kawasaki’s Law of Pre-Money Valuation: for every full-time engineer, add $500,000; for every full-time M.B.A.,

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Up and Running

MAY 21, 2015

All the other sharks typically make a traditional equity investment; for example they’ll invest $100,000 at a $1,000,000 business valuation, and take 10 percent of the business. That’s called a traditional equity investment. Mr. Wonderful, by contrast typically makes his investment in the form of Debt Securities With Warrants.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

Gust

AUGUST 5, 2012

Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. Include a current valuation estimate. Financial forecast and metrics. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Austin Startup

SEPTEMBER 17, 2017

Further, you demonstrate on your spreadsheet that a venture return to early investors is plausible at a valuation that gives you enough equity to get the job done and to take care of you and your team at exit time. But, the manner in which you get paid can swing your valuation considerably.

Valuation 48

Valuation Forecast Seed Money Business Model 48

Startup Professionals Musings

APRIL 22, 2010

Quantify existing skin-in-the-game, by insiders and outsiders, including sweat equity and capital. Include a current valuation estimate. Financial forecast and metrics. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

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.” What is the post-money valuation of your last round?

Software Review 68

Software Review Startup Post-Money Valuation Technical Review 68

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Equity for Employees. Bookkeeper.

Equity 62

Equity Employee Founder CTO Hire 62

Cracking the Code

JANUARY 22, 2009

If you assume a 20% cost of capital (typical for equity, debt is generally cheaper), then getting an upfront payment for one additional year on a $10k MRR contract saves you $24k. By sales board plan, are you referring to Gary's actual business planning forecasts? Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 91

Software Review Clawback Sales Salary 91

Duct Tape Marketing

JUNE 20, 2023

And the model we had in mind, there's a book called Valuation, which our, our firm has had an updated every year for the past 20 years or more. Were showing positive return on equity, were showing positive growth per, in value per customer through their digital initiatives. So this was a very conscious step on our part.

Technical Review 66

Technical Review Silicon Valley Generative AI Arizona 66

Both Sides of the Table

FEBRUARY 14, 2016

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization. I have been talking about my concerns about valuations for the past couple of years because, well, they’ve been rising very rapidly the past two years! Mostly, no.

Valuation 150

Valuation Down Round Startup Later Stage 150