Startup Professionals Musings

SEPTEMBER 29, 2018

Cash flow is a basic survival metric for every startup. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Getting a sales contract before manufacturing inventory.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

Feld Thoughts

JULY 9, 2019

This was before the IPO Summer of 2019 when all conventional valuation metrics have entered the land of “suspension of disbelief” which is short-term good and long-term well-we-will-see-…-eventually. We ended up talking about using Gross Profit, instead of Revenue, to do valuation analysis.

Revenue 179

Revenue Valuation .Net IPO 179

Startup Professionals Musings

OCTOBER 5, 2014

Cashflow is a basic survival metric for every startup. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Getting a sales contract before manufacturing inventory.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

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

VC Adventure

AUGUST 31, 2017

If you read my blog regularly you know I love (LOVE) metrics. So no surprise that when River Cities Capital released an overview of SaaS operating and valuation benchmarks, I hung on every juicy detail. They took the 92 public SaaS companies and analyzed their key operating metrics. The valuation metrics show this clearly.

IPO 113

IPO Vertical Balance Sheet Valuation 113

YoungUpstarts

JANUARY 10, 2018

How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? Minimizing losses in the year before you begin shopping around for buyers will increase profit and help you get that higher valuation. Another important metric is churn. This plan will help you with that.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue.

Founder 245

Founder Technical Review CTO Hire IPO 245

Startup Professionals Musings

OCTOBER 18, 2023

New startup founders keep all the operating metrics they need in their head. Even if you don’t have a formal board of directors, it pays to have trusted advisors who will give you regular unbiased feedback on your team strengths and weaknesses, financial and operating ratio norms, and an external view of current company valuation issues.

Exit Strategy 248

Exit Strategy Valuation Acquisition Metrics 248

Startup Professionals Musings

SEPTEMBER 14, 2016

Cash flow is a basic survival metric for every startup. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Getting a sales contract before manufacturing inventory.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

The Startup Magazine

OCTOBER 22, 2020

Here we discuss how you need to handle data efficiently to enhance the organizational functions and boost business growth: Enhance Customer Experience: Reviewing the data produced by your sales department regarding the customers can give you great insights. It is of great use in increasing your sales figure.

Analytics 131

Analytics Portfolio Advertising Technical Review 131

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. As the risks below get eliminated the higher the valuation investors are prepared to pay. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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. “Too Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

JANUARY 9, 2021

New startup founders keep all the operating metrics they need in their head. Even if you don’t have a formal board of directors, it pays to have trusted advisors who will give you regular unbiased feedback on your team strengths and weaknesses, financial and operating ratio norms, and an external view of current company valuation issues.

Exit Strategy 434

Exit Strategy Valuation Acquisition Metrics 434

YoungUpstarts

SEPTEMBER 16, 2015

What’s critical for entrepreneurs to understand is that valuations for startups do not increase at a linear rate; they increase geometrically based on achieving the right milestones. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation.

Valuation 100

Valuation Dilution Chicago Technical Review 100

Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. All your assumptions about customers, sales cycle and most importantly, revenue, burn rate and runway are no longer true.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Both Sides of the Table

NOVEMBER 14, 2017

Throughout the first year we made many fixes and saw our revenue base in these markets accelerate so we felt we were ready to attack Los Angeles, amongst the most important storage markets in the country. An example of the systems companies build are pricing & revenue management tools to best help to optimize yield.

Operations 286

Operations New York City Technical Review Startup 286

Startup Professionals Musings

JUNE 22, 2016

That should make you wonder - how do you measure traction in a metric? While thinking about the parameters of traction, and how to measure it, I was impressed with a new book, “ Scaling Lean: Mastering the Key Metrics for Startup Growth ” by Ash Maurya, a serial entrepreneur, and creator of the one-page business modelling tool Lean Canvas.

Metrics 143

Metrics Advisory Board Startup Lean 143

Startup Professionals Musings

SEPTEMBER 22, 2021

They need to believe your valuation, based on current revenue and intellectual property, and feel the equity offered gives them a real return for the risk. These show a focus on the business elements required for success, and metrics for ensuring accountability, management control, and feedback along the way.

Intellectual Property 352

Intellectual Property Equity Bootstrapping Valuation 352

Cracking the Code

JULY 6, 2007

SaaS business metrics: why are they different? I was surprised today when I went through the NetSuite IPO filling (S1) to see that it looked very much like any Enterprise software document - not a single mention of churn or % of recurring revenues. Different models require different performance metrics. Friday, July 06, 2007.

Software Review 66

Software Review Metrics Valuation Technical Review 66

David Teten

DECEMBER 3, 2019

I previously posted a detailed presentation with sales technology tools useful for B2B sales. Many VC funds rely on general-purpose CRM and sales funnel solutions like Copper , Pipedrive, Salesforce , Streak , and ZenDesk. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Up and Running

JANUARY 14, 2022

Our major challenge was how do we compete with companies that have billion-dollar valuations, millions in investor funding, and millions in revenue? Of those competitors, a few of them have marketing and sales budgets equal to millions of dollars which are used on paid advertising, media mentions, influencers, and more.

SEO 104

SEO Software Review Search Acquisition 104

The Startup Magazine

MARCH 24, 2024

Pipeline velocity measures the pace at which your sales pipeline moves. It is a quantified metric that focuses on the speed of turning prospects into customers. The higher the velocity, the more predictable and scalable the revenue becomes. Before we jump into the proven tips, let’s make this tangible.

B2B 126

B2B Forecast Entrepreneur Analytics 126

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   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.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Cracking the Code

FEBRUARY 23, 2011

It would have been easy to explain the difference by changes in the 2010/2011 revenue growth projections but unfortunately that is not the case. revenues while large caps are trading at 6.4x. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. sales and marketing. (10). What happened?

Software Review 101

Software Review Technical Review Valuation Europe 101

Cracking the Code

JANUARY 22, 2009

Building Your SaaS Sales Compensation Plan. Compensating the sales force is a difficult task and the key is usually to keep things simple, so that each sales rep knows what he needs to optimize to make more money at the end of the quarter. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3%

Software Review 91

Software Review Clawback Sales Salary 91

Cracking the Code

MARCH 10, 2008

Measuring sales and marketing effectiveness of SaaS companies. The CMRR represents the revenue contracted during quarter N and not recognized yet on a GAAP basis because the service has not been implemented. Monday, March 10, 2008. If you use the gross margin derived from CMRR, the situation is different.

Sales 79

Sales Software Review Marketing Technical Review 79

The Startup Magazine

APRIL 24, 2020

Whether you’re interested in selling a website you built from scratch, or want to sell your Amazon-based B2C brand, there are many different baseline factors that go into determining an appropriate website valuation number. While it’s true that valuations can get quite technical, the basics are relatively easy to understand.

eCommerce 91

eCommerce Valuation B2C Revenue 91

VC Cafe

MAY 18, 2022

2) Valuation multiples are always a hack proxy. David Sacks offers a few benchmarks on growth rates (revenue), gross margins, CAC payback and burn. Thomasz Tunguz from Redpoint Capital shared 4 scenarios that startups should be contemplating now depending on their sales efficiency and cash reserves. Re-evaluate your valuation.

Term Sheet 190

Term Sheet Startup Valuation Ukraine 190

Occam's Razor

APRIL 23, 2012

While there is a great deal of appreciation for the power of metrics/data, I've come to realize that Sr. Leaders don't quite appreciate the deep, and often corrosive, consequences of choosing metric x over metric y as a key performance indicator (KPI). It is a standard metric. Revenue vs. Economic Value.

Metrics 152

Metrics Analytics Search Channel 152

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 16, 2014

Still… Now Slack has been valued at over a billion dollars, less than a year after launch, every month adding more than a million dollars of annual recurring revenue. What does it actually mean that metric X is better than average and metric Y is below? “It’s not fair,” we all said to ourselves.

Metrics 246

Metrics Early Stage Retention Revenue 246

Up and Running

OCTOBER 3, 2018

Financial Summary: Explain your business model, startup costs, revenues, and liabilities to the company. Tailor your marketing and sales plan to attract more people like your ideal customer. Components of this section include: Your marketing and sales plan. Milestones and metrics that you’ll need to hit to be viable.

El Paso 61

El Paso Business Plan Technical Review Forecast 61

ConversionXL

AUGUST 11, 2021

A sponsorship strategy should cover five areas: Assets Audience data Asset valuation Activations Market identification. Sponsors will have different reasons for backing your project: sales, lead generation, brand awareness, product launches , corporate social responsibility, etc. Asset valuation. Audience data. Source ).

Audience 139

Audience Social Media Email Ruby 139

David Teten

SEPTEMBER 23, 2017

An investor had few hard metrics other than the actual financials, and little technology to make the process scaleable. Over the past few decades, better metrics became available, and investors could take a more analytical, data-driven approach. is an AI bot which helps companies refine their sales pitch to VCs. Pitchbot.vc

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

David Teten

AUGUST 6, 2015

financial statement summaries, valuation analysis, ratio analysis, etc.) A model that shows X% growth over time with no embedded correlation to sales/marketing is a huge red flag. A more mature organization may project future revenues based on their actual sales pipeline, with a probability adjusted percentage based on stage.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Cracking the Code

DECEMBER 1, 2009

Labels: Cloud Computing , SaaS , sales and marketing. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. sales and marketing. (10). Impact of the recession on SaaS Sales&Marketing pr. Building Your SaaS Sales Compensation Plan. Posted by Philippe Botteri. at 12:41 PM.

Software Review 48

Software Review Technical Review Cloud Europe 48

Both Sides of the Table

JULY 16, 2013

It goes like this, “If your next round investor can see how fast you’re scaling then you can raise money based on your user traction and your valuation can hit the sky. The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” I see this weekly.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98