Both Sides of the Table

SEPTEMBER 18, 2014

On the phone … Me: So, you raised venture capital? Revenue multiple? If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Your A round?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

ReadWriteStart

OCTOBER 2, 2021

In addition, they can neither issue stocks nor bonds. 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. While LLCs cannot issue stocks, they can sell bonds to investors. For one, they have no liability protection.

Technical Review 158

Technical Review LLC IPO Stock 158

Steve Blank

APRIL 26, 2022

Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. Why do VCs Do This? ” On one hand they’re right. .”

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Both Sides of the Table

DECEMBER 27, 2011

You have to understand whether they’re likely to yield revenue growth in the near term OR whether you have access to cheap enough capital to fund your losses until your investments pay off. million in revenue three years later is, “So effing what?” Simplifying: Revenue -. ” Harsh, but reality.

Startup 418

Startup Revenue Technical Review Flash 418

Steve Blank

SEPTEMBER 14, 2009

Posted on September 14, 2009 by steveblank Over the last 30 years Wall Street’s appetite for technology stocks have changed radically – swinging between unbridled enthusiasm to believing they’re all toxic. One of the biggest mistakes entrepreneurs make is misunderstanding the role of venture capital investors. What Do VC’s Do?

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

Steve Blank

APRIL 10, 2019

For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options. In tech startups stock options were here almost from the beginning, first offered to the founders in 1957 at Fairchild Semiconductor , the first chip startup in Silicon Valley. Not everyone got the same amount of stock.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

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.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Steve Blank

MARCH 16, 2016

Luckily in the last quarter of the 20 th century a new source of money called risk capital emerged. Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash. At its core Venture Capital is nothing more than a small portion of the Private Equity financial asset class.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

ReadWriteStart

OCTOBER 2, 2021

In addition, they can neither issue stocks nor bonds. 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. While LLCs cannot issue stocks, they can sell bonds to investors. For one, they have no liability protection.

Technical Review 78

Technical Review LLC IPO Stock 78

VC Cafe

JANUARY 24, 2021

billion gamers worldwide will help the global games market generate revenues of $189.3 billion in revenue last year. Gamestop stock becomes more valuable than Google :-) Just kidding. We’re excited about the Metaverse at Remagine Ventures and the potential it has to bring people together. Fortnite alone made $1.8

Technical Review 207

Technical Review Audio Forecast Social Media 207

Both Sides of the Table

OCTOBER 1, 2009

Consumer spending is 70% of the economy and will continue to be stretched – We can look all we want at tech innovation, VC funding cycles and hot M&A deals, but ultimately growth and therefore investment must be underpinned by revenue. Unemployment coupled with a stock market drop will stop this spending cold IMHO.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. The shares given out can either be common stocks or preferred stocks. ? Debt investment. These investments are made instead of shares or equity in your startup.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Up and Running

JULY 23, 2014

Startups looking for angel investors or venture capital (VC) absolutely need an exit strategy because investors require it. So startups looking for angel investors or venture capital (VC) absolutely need an exit strategy because investors require it. The exit is what gives them a return. last December.

Exit Strategy 131

Exit Strategy Software Review Angel Investor Startup 131

Startup Professionals Musings

OCTOBER 7, 2022

On the other hand, venture capital organizations typically look for needs that exceed $2 million. Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Both Sides of the Table

APRIL 14, 2010

If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Startup Professionals Musings

JUNE 5, 2021

The focus should always be on execution, revenue, and profits. Angels are becoming more aggressive as their stock market and real estate assets recover, and institutions again have earnings to risk in venture capital funds. Every startup wants to be the one to start the next bubble, but these are impossible to predict.

Demand 362

Demand Government Venture Capital Valuation 362

David Teten

AUGUST 7, 2019

The second strategy is Value Investing , a strategy which “seeks to maximize returns by finding stocks that are undervalued by the market…Investors assess a stock’s intrinsic value…and compare that value with the stock price. LTV / CAC, revenue growth, etc.) A tiny number of winners drive VC returns.

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Up and Running

AUGUST 18, 2014

Startups tend to rely on capital that comes via angel investors or venture capital firms while small business operations may rely on loans and grants. The interesting thing about venture capital is that those providing it tend to have a more active role in whatever company they are backing.

Small Business 154

Small Business Exit Strategy Cofounder Angel Investor 154

Both Sides of the Table

JUNE 17, 2017

It was a stock option incentive related “expense” but I bet you didn’t know that because in an era where we only read the headlines — they must be a train wreck losing billions. Revenue When I look at an income statement I start by focusing on the revenue line. You need to understand the “quality” of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Both Sides of the Table

JULY 16, 2010

But VC is an “illiquid asset&# so funds didn’t disappear quickly - In 2000/01 the stock market quickly adjusted punishing investors in the NASDAQ and in individual public technology stocks. What accelerated this was the collapse of the public stock markets. Price MUST be in a certain range.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JUNE 5, 2011

On a public stock market that is the value that investors place on future free cash flows of the business discounted to today’s date to account for the time value of money. The price of public stocks change instantly in reaction to news that is perceived to affect the future value of that company. Here’s what I mean.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

YoungUpstarts

JULY 16, 2020

If you want your business to grow faster by taking on investors and raising venture capital, you might want to switch your business entity from an LLC to a C Corporation. The C Corporation is often the best choice for companies that want to take on capital from investors or sell shares of stock.

LLC 255

LLC Bankruptcy Venture Capital Stock 255

Startup Professionals Musings

JANUARY 4, 2020

On the other hand, venture capital organizations typically look for needs that exceed $2 million. Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

BeyondVC

APRIL 4, 2018

Look at the Dropbox IPO which priced above its initial value and came out white hot at the end of one of the worst weeks in stock market performance. Couple that with Mulesoft being bought for 21x TTM revenue ( see Tomasz Tunguz analysis ) at $6.5 Their growth to over $509mm of revenue from $281mm 2 years ago is a case in point.

Cloud 60

Cloud Agile Architecture Azure 60

Transformify

MARCH 14, 2020

At the same time, the stock markets collapsed, and most businesses already report skyrocketing losses, unmet revenue targets and insufficient stock due to production slow down in China, India and the rest of the world. Over the last decade, a new trend emerged as tech talent was scarce where it was needed the most.

Hiring 98

Hiring Bulgaria Italy Spain 98

Steve Blank

MARCH 17, 2020

To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. 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.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Scalable Startup

OCTOBER 26, 2014

Imagine if you’re in Silicon Valley right now with no equity in a tech startup, but associated with several people getting six figure “bonuses” because they somehow wound up with some stock in one. The Greenshoe is an over-allotment of stock options, up to 15% of the total offering at time of IPO.

Silicon Valley 25

Silicon Valley Hawaii Angel Investor IPO 25

Both Sides of the Table

MAY 24, 2021

It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales. He writes “Half of all venture funds outperform the stock market which is the benchmark most institutions measure VC funds against.”

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Up and Running

SEPTEMBER 19, 2017

For a business that anticipates needing, for example, $500,000 in startup capital, that means that best-case scenario Klemm can expect to give up half of his business’s common stock (and an even larger percentage of control of the business once the deal’s fine print provisions are considered).

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

www.inc.com

SEPTEMBER 24, 2011

Why Arizona Bay started taking stock from its customers instead of cash. Dave Graham Business Venture Capital Private Equity GlobalLogic Inc. Venture Capital Firms. During the first Internet boom, companies that provided services to tech start-ups were all too happy to work for stock. Will Work for Equity.

Arizona 40

Arizona Equity Iowa Venture Capital 40

VC Cafe

SEPTEMBER 16, 2021

I’ve also shared my insights with Techcrunch, in “ 5 creator economy VCs see startup opportunities in monetization, discovery and much more “ As venture capital investors, one question we think about a lot at Remagine Ventures is “where are the opportunities for startups in the Creator Economy?”

Startup 207

Startup Social Media Venture Capital Audio 207

Berkonomics

AUGUST 3, 2023

This class of investor, once quite disorganized, has become much like the venture capital community, creating a process including due diligence (careful examination of a business before investment), terms of investment that match those of venture capitalists, and a process that sometimes takes months from introduction to investment.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Scalable Startup

OCTOBER 26, 2014

Imagine if you’re in Silicon Valley right now with no equity in a tech startup, but associated with several people getting six figure “bonuses” because they somehow wound up with some stock in one. The Greenshoe is an over-allotment of stock options, up to 15% of the total offering at time of IPO.

Silicon Valley 20

Silicon Valley Hawaii Angel Investor IPO 20

Steve Blank

JULY 15, 2010

If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Here’s why.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! But when it’s all over and they define the era of this mini run up in stock prices I suspect they’ll include 2011 in the “over valued&# category. It’s what I love about entrepreneurship and about venture capital. and profits! That may be.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

crowdSPRING Blog

NOVEMBER 7, 2014

10 Psychological Triggers To Boost Revenues – crowdspring.co/1rXsiql. Startup Equity and Stock Options: What’s It Worth to You? The Thin Skin of the Venture Capital Market - crowdspring.co/1xaoN3x. Here’s a fantastic video that showcases one of the most beautiful cities in the world. – crowdspring.co/1sSpg62.

Social Media 99

Social Media Small Business Design Media 99

Startup Professionals Musings

FEBRUARY 25, 2023

Equity is stock, but private company stock has no market value until the company goes public or is sold or merged with another company. IPO – public company initial public stock offering. Here are three important reasons for the question: Good investment paybacks normally require an exit event.

Exit Strategy 264

Exit Strategy Private Equity Equity Technical Review 264