Startup Professionals Musings

JANUARY 12, 2018

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Only one-third make it past their tenth anniversary. Commit to a major customer.

Intellectual Property 134

Intellectual Property Technical Review Startup Incubator 134

Growthink Blog

MAY 20, 2011

So, Mike tells me he wants to raise a first round of venture capital based on a $100 million valuation. Now, anyone who knows anything about venture capital will literally laugh when they read a line like that. And how most likely, the chance of him raising venture capital with just an idea was zero.

Venture Capital 109

Venture Capital Valuation NDA Non-disclosure Agreement 109

Startup Professionals Musings

JULY 1, 2017

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Product Development 177

Product Development Cost Developer Product 177

Startup Professionals Musings

JULY 8, 2015

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Entrepreneur 120

Entrepreneur Intellectual Property Technical Review Incubator 120

VC Cafe

JANUARY 24, 2023

Live operations refer to the ongoing management and maintenance of a game after its initial launch, and can include things like events, updates, and community management. When comparing venture investments only, 2022 saw a 40% decline in gaming investments compared to 2021 (according to CB Insights). billion in 2022.

Generative AI 104

Generative AI San Francisco Technical Review Europe 104

Both Sides of the Table

MARCH 21, 2013

I think it’s important for enterprise startups to layer in professional services into your revenue stream. deliver profitable revenue that while on gross margins of 50% vs. software at 85-95% it is still profits to help you cover fixed costs. Control Size of PS Revenue Relative to Software Business. rollout support.

Software Review 321

Software Review Software IP Technical Review 321

Both Sides of the Table

DECEMBER 14, 2010

I often tell people that raising venture capital is more difficult than getting married. Not so in venture capital. How do you then reference check your VC to be sure that you’ve chosen a good firm and partner? But they’re the ones you can find out with reference checks. After Sept 11th?

Term Sheet 298

Term Sheet Venture Capital Stealth Cofounder 298

YoungUpstarts

NOVEMBER 27, 2018

A concrete monetization strategy, or at the very least a revenue model, gives investors detailed insight into how a startup plans to generate profit once an established network is set into place. Emmanuel de Watteville, General Partner and Co-founder of Blue Ocean Ventures, has been part of the startup ecosystem since 2003.

Early Stage 160

Early Stage Cofounder Startup Security 160

Feld Thoughts

NOVEMBER 2, 2016

This quarter they interviewed me as part of it on Quarterly VC Update: Brad Feld on the State of Venture Capital Investing. For growth companies (usually Series D or later), there are pretty clear market comparables based on growth rate, revenue, gross margin %, and type of company. Each quarter Cooley does a VC market update.

Venture Capital 70

Venture Capital Private Equity Early Stage Valuation 70

Both Sides of the Table

JANUARY 6, 2014

When you first start your company and raise initial venture capital your board probably consists of 1-3 founders and 1-2 VCs. And somebody who isn’t thinking necessarily thinking about how to maximize their ownership in your next round of financing. In the Early Days. Experience. Relationships. Founder’s perspective.

Technical Review 325

Technical Review Early Stage Software Review Los Angeles 325

K9 Ventures

JUNE 5, 2015

In June of 2013, as I was putting together my thoughts for the K9 Ventures annual meeting, I decided to sit back and reflect on what I thought was happening in “Venture Land”. The risk here is what I refer to as the curse of over-capitalization. I refer to this as The Venture Spiral (blog post from 2008).

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

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

JUNE 19, 2017

Gross burn is your cost base and net burn is the difference between your revenue and costs. Usually when an investor is asking you your burn rate he or she is referring to net burn — what cash are you consuming. If your revenue grows you can afford to increase your cost base. You start from the basics, which is if you raise $2.5

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Up and Running

JULY 28, 2020

Simply put, alternative funding is gaining financing for your company outside of traditional bank loans to gain capital. To help you find the best funding to fit your needs, read on for the top 8 alternative financing options. Venture Capital and Angel Investment. What is alternative funding? Traditional loans.

Small Business 118

Small Business SBA Bootstrapping Venture Capital 118

Up and Running

JUNE 17, 2019

No doubt you refer to your income statement (also called profit and loss statement or P&L) and your bank account for the basics. . The business income statement, also referred to as a profit and loss (P&L) statement, is a useful tool for providing an overview of how your business is doing over time.

Balance Sheet 120

Balance Sheet Small Business Finance .Net 120

Up and Running

MARCH 4, 2022

A business plan does far more than help secure venture capital when you’re starting out. Share your plan with employees, shareholders, and investors, and refer back to it to see if you need to make adjustments along the way. Making your goals too lofty may hurt your chances of securing financing, too.

Business Plan 117

Business Plan Revenue Small Business Administration United States 117

David Teten

NOVEMBER 14, 2019

I wrote recently about Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Since then, I’ve talked with a number of other firms, and greatly expanded my database: Who are the major Revenue-Based (RBI) Investing VCs? Revenue-based investing VC. Venture debt.

SBIC 60

SBIC SBA Cap Table Database 60

Both Sides of the Table

APRIL 25, 2011

This thinking is largely driven by the venture capital industry (and subsequently Wall Street) who are in search of high margin, highly scalable businesses. It’s nearly impossible to get a services company financed by VCs. You’re a small fish. This team is talented. They wanted advice. And probably some money.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Up and Running

FEBRUARY 12, 2014

No doubt you refer to your income statement and your bank account for the basics, but the truth is most businesses ignore the most powerful financial tools in the accounting arsenal: the balance sheet and the cash flow statement. Not just what your business owns, but what it controls or what is in its possession, such as a financed vehicle.

Balance Sheet 136

Balance Sheet Small Business .Net Finance 136

Up and Running

APRIL 8, 2013

Common forms of equity investment are friends and family, angel investors and venture capital. Angel investments generally refer to contributions of $1M or less and are labeled ‘seed’ investments while venture capital investments are generally labeled as ‘Series A’ and are $2.5M or greater. or greater.

Equity 82

Equity Covenant Venture Capital Finance 82

Growthink Blog

MAY 23, 2011

The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1. The angel then introduces the entrepreneur to his or her wealthy friends and business connections who, based on the good reputation of the referring angel, also invest. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Tim Keane

JANUARY 12, 2010

  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.] and walked through each proposed term and why it is or isn’t important.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Growthink Blog

MAY 10, 2012

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Up and Running

OCTOBER 24, 2016

With the press focused on the millions raised by high-profile startups, many would-be entrepreneurs are becoming convinced that these are the only worthwhile ventures to pursue. “Lifestyle business” is a term in the startup lexicon that refers to businesses that aren’t a fit for venture capital.

Startup 60

Startup Venture Capital Salary Equity 60

Cracking the Code

JANUARY 22, 2009

While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3% of Year One Revenue Sounds high, but is that considered a reasonable package?

Software Review 91

Software Review Clawback Sales Salary 91

reidhoffman.org

NOVEMBER 12, 2013

Neither is a particularly good backdrop for trying to raise capital, because. we had no revenue. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between 0 and 2 deals. Investors see a lot of pitches.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Cracking the Code

FEBRUARY 25, 2008

The Index reference point starts on January 1st 2008 at 19,187.81 As I was building the spreadsheet, I also included the revenue multiples for this set of companies, both for the trailing 12-month (TTM) and the forward 12-month (FTM). Venture Capital. (3). Explore Venture Capital. Yahoo Finance.

Software Review 48

Software Review Technical Review Europe Venture Capital 48

Both Sides of the Table

SEPTEMBER 27, 2010

There are real changes in the venture capital industry and it would have been fun to talk about them. What micro VCs need to consider is what happens when several of your companies want to grow and require VC financing? Or when the economy turns downward and they all need financing extensions? Answer: Not much.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Growthink Blog

MAY 21, 2014

There were some great responses to my post last week as to the poor returns experienced by venture capital fund investors. Now Berkshire Model companies, as entities with fundamentally investment vs. operating mindsets more naturally position, language, and network their businesses in finance contexts.

San Diego 72

San Diego Warrant IRR Investment Bankers 72

Reid Hoffman

JANUARY 26, 2021

One common mistake is for entrepreneurs to simply select whichever venture capital firm is offering the highest valuation. One of the things a financing round brings is an opportunity to strengthen the startup’s overall network. A final piece of key advice is to remember to reference check your board members.

Startup 36

Startup Equity Early Stage Green 36

Growthink Blog

APRIL 23, 2012

The very high profile sale of Instagram to Facebook for $1 billion after just 13 short months in business (and no revenue) of course has entrepreneurs and investors scrambling to divine lessons and wisdoms for where and how to be and find the next “big thing.” To Come Into Being Through Evolution.

Venture Capital 74

Venture Capital Operations Metrics Finance 74

Growthink Blog

SEPTEMBER 7, 2016

In financial markets, the window between Labor Day and Thanksgiving is often referred to as "Capital-Raising Season," as it is a very active time for companies and investors to connect, to diligence each other, and to do deals. I run through the math here , with the net result of revenue increasing by 2.4X

Aggregator 48

Aggregator Global Business Plan Demand 48

Austin Startup

MARCH 26, 2019

To help with that, I’ve created a non-exhaustive list of questions to serve as a lightweight reference sheet for any new DTC entrepreneur. It is very important to establish the finance function of the business before dumping money into ad spend. Unfortunately, debt financing for DTC is still somewhat nascent.

Technical Review 49

Technical Review Software Review China Acquisition 49

www.readwriteweb.com

OCTOBER 18, 2010

You have heard, I am sure, that venture capitalists only invest in very large market opportunities - $500 million to $1 billion. 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.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52

www.readwriteweb.com

OCTOBER 18, 2010

You have heard, I am sure, that venture capitalists only invest in very large market opportunities - $500 million to $1 billion. 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.

Marketing 52

Marketing Bootstrapping Incubator Angel Investor 52

Pascal's View

NOVEMBER 15, 2011

Clovis Oncology is set to price a $160 million offering, despite having a whopping $0 in revenue. Also on the docket is Lashou Group, which only reports $16 million in revenue for the first nine months of 2011. For more background and facts on this topic, please refer to : [link]. <script IPOs were neither VC nor PE backed.

IPO 31

IPO Term Sheet Marketing United States 31

abovethecrowd.com

DECEMBER 18, 2017

Most large healthcare IT systems are chosen based on one primary objective: revenue management. healthcare system is complex and difficult, and most of these large EHR systems’ number one purpose is to deliver revenue. Our venture capital firm, Benchmark, has made four investments consistent with the “customer-first” theme.

Customer 59

Customer Technical Review Venture Capital Software Review 59