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

Steve Blank

MARCH 4, 2014

A consequence of using these corporate finance metrics like RONA and IRR is that it ‘s a lot easier to get these numbers to look great by 1) outsourcing everything, 2) getting assets off the balance sheet and 3) only investing in things that pay off fast. What Does this Mean?

IRR 335

IRR Startup Business Model Agile 335

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? Aligned incentives.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Steve Blank

MARCH 31, 2014

In fact, it was only 7 years ago that Apple shipped its first iPhone and Google introduced its Android operating system. Companies horde cash and squeeze the most revenue and margin from the money they use. Think about this; 7 years ago Nokia owned 50% of the handset market. Apple owned 0%.

Private Equity 326

Private Equity Metrics China Intellectual Property 326

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. Intel under their last two CEOs delivered more revenue and profit than any ever before. They knew how to execute the current business model.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

David Teten

NOVEMBER 17, 2011

Projections were based on dozens of operational assumptions related to pricing, production, marketing spend, etc. For my start-up, I built a very robust operational and financial model with a detailed revenue build up and a validated cost structure. In banking, a lot of my time was spent on modeling cash flows.

Employee 155

Employee IRR Startup Mexico 155

Ben's Blog

AUGUST 17, 2020

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?” Multiples are not only used to value companies today but also to value companies several years down the line.

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36