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Valuations 101: The Venture Capital Method

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. million รท 20X.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

Gross burn is the total amount of money you are spending per month. Net burn is the amount of money you are losing per month. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. I’ve been preaching the “don’t get ahead of your inherent valuation&# message for nearly 10 years. million post-money valuation with no revenue.

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Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

The company has done $400k in sales in less than two years and had an early test deal with a local supermarket chain that they were massively overperforming on. He had been at it for 6 months and had no sales or distribution lined up yet. They won a design award at a trade show, but have no revenue and no orders.

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Shark Tank Season 4 episode 2 breakdown

Lightspeed Venture Partners

The entrepreneurs had made $150k in revenue running classes for four months at a gym in New York, selling out the classes at $35/class. post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation.

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Guy Kawasakiโ€™s 10 Questions to Ask Before You Join a Startup

www.mint.com

If the answer to the question centers around โ€œWe will achieve revenue soon so our net will improve and give us more runway,โ€ it means the company is in trouble because no product ever ships on time nor achieves the companyโ€™s โ€œconservative forecast.โ€ What is the post-money valuation of your last round? Thatโ€™s cool.

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90 Things I've Learned From Founding 4 Technology Companies

betashop.com

million registered users, 7500 supplier partners, 600 team members, and a run-rate of more than $150M in sales in just 15 months. At Fab, mobile is already 33% of our visits and sales and we just launched our mobile apps nearly a year ago. 10M post-money valuation = $100M target. 500M valuation = $5B target.