The Startup Magazine

JUNE 4, 2023

In a perfect world, small businesses would have an endless stream of revenue coming in and there wouldn’t be need to worry about financing. Sometimes businesses have to get creative when it comes to their small business financing, especially when revenue is low. However, we all know that’s not the case.

Finance 110

Finance Revenue Small Business Bootstrapping 110

David Teten

AUGUST 20, 2019

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. ” .

Revenue 60

Revenue Cofounder Founder Venture Capital 60

Both Sides of the Table

DECEMBER 11, 2022

Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. How might our next phase of the journey seem brighter, even with more uncertain days for startups and capital markets? What happened? Until we weren’t.

Valuation 466

Valuation San Francisco Ratchet Liquidation Preference 466

David Teten

AUGUST 19, 2019

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Bigfoot Capital. Capital need of up to $1.5M

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

MARCH 14, 2018

Another example is Correlation Ventures ($300M+ AUM), a VC firm which co-invests in financings with at least one other new outside VC. If you’re thinking of hiring a Partner, I suggest see How to Negotiate a Partner Role at a Venture Capital or Private Equity Firm. – Launch a venture capital fund of funds.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

The Startup Magazine

AUGUST 11, 2023

The following is a condensed explanation of seed funding: Seed money is a form of early-stage financing that new businesses receive from investors in exchange for a share of ownership in the company. Seed venture capital firms can make more significant follow-on investments to keep or increase their equity stake in the company.

Seed Stage 126

Seed Stage Technical Review Early Stage Due Diligence 126

David Teten

AUGUST 19, 2019

Does the traditional VC financing model make sense for all companies? A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. So what is Revenue Based Investing? Absolutely not.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

Both Sides of the Table

SEPTEMBER 15, 2022

At our mid-year offsite our partnership at Upfront Ventures was discussing what the future of venture capital and the startup ecosystem looked like. Should SaaS companies trade at a 24x Enterprise Value (EV) to Next Twelve Month (NTM) Revenue multiple as they did in November 2021?

Technical Review 416

Technical Review Pre-Money Valuation San Francisco Valuation 416

Startup Professionals Musings

JUNE 30, 2019

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.

Intellectual Property 219

Intellectual Property Technical Review Startup Incubator 219

Startup Professionals Musings

FEBRUARY 19, 2013

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.

Intellectual Property 309

Intellectual Property Technical Review Venture Capital Startup 309

Both Sides of the Table

SEPTEMBER 18, 2014

On the phone … Me: So, you raised venture capital? It’s like we need a finance 101 course for entrepreneurs. Revenue multiple? In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. We raised a seed round.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

JULY 14, 2014

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 283

Entrepreneur Intellectual Property Technical Review Incubator 283

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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

APRIL 24, 2011

I just read the Q1 2011 report from CB Insights , which shows venture capital is back. billion to work across 738 financing deals with U.S. Your friends and family are really the only answer until you have a significant revenue stream. Back to VCs, Silicon Valley venture capital firms are still the most active.

Venture Capital 233

Venture Capital Revenue Elevator Pitch Silicon Valley 233

Both Sides of the Table

JULY 23, 2014

There has been much discussion in the past few years of the changing structure of the venture capital industry. The rise of alternative sources of capital (crowd funding and the like). The overall trends in our industry have breathed a new life into the venture capital industry. The iPhone was released.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

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. It always reduces risk to plan your business first.

Intellectual Property 134

Intellectual Property Technical Review Startup Incubator 134

Both Sides of the Table

SEPTEMBER 22, 2012

He also nails the reason why venture capital is still necessary to grow large businesses quickly in a world where the costs of running startups have fallen dramatically. After all, growth equals high valuations and loads of venture capital! In revenue terms our first two years of sales were $2.1 And headlines.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

MAY 28, 2018

There are many things a VC is looking for in reviewing your business plan but beyond things the like the quality of revenue, margins, OPEX and CAPEX there’s a really simple rule I call, “Cash In, Cash Out, Milestones Achieved.” Most VCs lead one round of financing in your company and are looking for other VCs to lead subsequent rounds.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

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

David Teten

MARCH 8, 2021

Keith Harrington of Novel Growth Partners and Founder, Revenue-Based Finance Network , just posted the recording of an interview with me on revenue-based investing ; flexible VC ; and their future. If this was helpful to you, please sign up for my newsletter.

Revenue 78

Revenue Finance Video Partner 78

YoungUpstarts

JUNE 26, 2020

If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. For some entrepreneurs, raising financing can seem like a full time job, particularly in these trying times. He is also a venture partner at several VC firms. Who is in your tribe?

Finance 205

Finance Silicon Valley Valuation Startup 205

Steve Blank

APRIL 26, 2022

Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. Other times it was simply a take-it-or-leave-it, here are the new terms. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

View from Seed

OCTOBER 24, 2019

Pre-seed investing should be super simple, so any signs of pro-rata rights, tranched financings, charging the company for value-added services, etc. As an inexperienced founder, you are very likely to take at least two rounds of financing before a series A, so the round to try to skip is any sort of second seed. should be avoided.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

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

Both Sides of the Table

MAY 23, 2012

Many observers of the venture capital industry have questioned whether its best days are behind it. Looking ahead at the next decade I am excited by what I believe will be viewed as one of the best and most rational investment periods for venture capital due to seven discrete factors: 1. The Exit Problem.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

ReadWriteStart

OCTOBER 2, 2021

And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits. Lower tax rates allow an LLC to be more flexible with finances. While LLCs cannot issue stocks, they can sell bonds to investors.

Technical Review 158

Technical Review LLC IPO Stock 158

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

VC Cafe

JANUARY 24, 2023

Putting gaming in context in 2023 While 2022 was the first year that saw mobile gaming revenue shrink by 5%, the number of downloads was overall up and session times remained the same, as I mentioned in my post on the state of Israeli gaming in 2023. Q4 2022 was particularly brutal, with a 83% decline in gaming funding. billion in 2022.

Generative AI 104

Generative AI San Francisco Technical Review Europe 104

Up and Running

JUNE 23, 2022

On the other hand, some of these are not easily fixable so you’ll have to look for alternative solutions to your financing problems. Explore other financing options. In that case, it may be worth exploring alternative financing options. For example, not enough credit history is hard to change quickly.

SBA 163

SBA Finance Balance Sheet Technical Review 163

David Teten

FEBRUARY 16, 2021

We’ll talk about revenue-based investing and other alternative investment approaches, and my recent work with Jamie Finney and Jonathan Bragdon about the concept of Flexible VC and how and when that approach works. Register NOW.

Revenue 78

Revenue Finance Hosting Partner 78

YoungUpstarts

OCTOBER 12, 2017

Many of these companies are pre-revenue and in the cash burn stage as they try to establish their technology and market. However, as a condition of financing they may require annual audited financial statements. If there is insufficient cash, then the company should have a plan to obtain sufficient capital.

San Francisco 133

San Francisco Forecast Early Stage Term Sheet 133

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. In SaaS (or any recurring revenue business) this is also a very difficult task.

Metrics 150

Metrics Cost Acquisition Startup 150

Startup Professionals Musings

NOVEMBER 13, 2021

Usually these are revenue-generating e-commerce sites, or have the potential to be revenue-generating. Even if the goods and services are changing hands as gifts, or the revenue motive exists only to make services sustainable, the economic value is evident. There is value in the “idling capacity” of all assets.

Cuba 316

Cuba Venture Capital Community Valuation 316

David Teten

NOVEMBER 26, 2019

Andreas Rothe, CFO, Fragomen , observed, “One of the reasons for a budget is to align the various resources of the firm to projected revenues from clients and company objectives. Peter Nesbitt, VP of Finance at Teampay , said, “Forecasting is exceptionally challenging in practice, especially as end users drive an era of distributed spending.

Agile 60

Agile Management Forecast Silicon Valley 60

Startup Professionals Musings

JUNE 5, 2021

In finance, a bubble is too much money chasing assets, greater asset production and a herd mentality. In finance, “this time is different” is the beginning of a new bubble. The focus should always be on execution, revenue, and profits. In all these cases, a bust is inevitable, and everyone may lose. Overconfidence.

Demand 362

Demand Government Venture Capital Valuation 362

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Production or service is the business’s core activity, which generates revenue. Finance is how you manage your finances, including budgeting, accounting, and bookkeeping. Financing Your Startup.

Technology 138

Technology Venture Capital Finance Startup 138