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10 Rules of Thumb for Startup Investment Valuation

Gust

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? Image via eHow.com.

The Good, The Bad, And The Ugly Of Software Patents

Gust

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. Yes, the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending.

Startup Valuation: How Much Is Your Company Worth?

Seed Stage Capital

skip to main | skip to sidebar 19 January 2010 Startup Valuation: How Much Is Your Company Worth? One of the most common issues that concern entrepreneurs is how to address the "Valuation Question." How do we best approach the question of valuation?

10 Rules of Thumb for Startup Investment Valuation

Startup Professionals Musings

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? valuation entrepreneur startup investor business

The Dentist Office Software Story

A VC : Venture Capital and Technology

I’ve been telling this fictional story about Dentist Office Software for years to describe why we are so focused on our “networks” investment strategy. Since I’ve never told the Dentist Office Software story here at AVC, I will do that and then I will add Albert’s alternate (and better) ending. The company, Dentasoft, grows quickly into a $100mm annual revenue business, goes public, and trades up to a billion dollar valuation.

Om Malik on why valuations defy metrics

The Equity Kicker

When companies attract high valuations their investors are predicting the future too – either that the business will trade in M&A at a ‘strategic multiple’ or that they will generate big cash flows. For larger valuations it is the latter.

The Good, The Bad, And The Ugly Of Software Patents

Startup Professionals Musings

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. Yes, the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending.

2011 Valuation Survey of North American Angel Groups

Angel Investing News

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies. 2011 Angel Group Valuation Survey. Valuation.

2011 Valuation Survey of North American Angel Groups

Gust

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies. 2011 Angel Group Valuation Survey. Pre-money Valuation of Pre-revenue Companies.

Software Patents Have Become a Startup Nightmare

Startup Professionals Musings

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. Yes, the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending.

Understanding Changes in the Software & Venture Capital Industries

Both Sides of the Table

In this three-part series I will explore the ways that the Venture Capital industry has changed over the past 5 years that I would argue are a direct result of changes in the software industry, not the other way around. Open-Source Software & Horizontal Computing.

How to Make Sure Professional Services Don’t Take Over Your Software Company

Both Sides of the Table

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. You don’t want to run the risk that having a PS business that takes your eye of off the ball of growing a large software business.

IP 77

The "Real Valuation" Is About Having Fun

Inc Startups

Ronen Shilo, founder of software company Conduit, talks about what his company's recent $1 billion valuations means--and doesn't mean--to him. Ronen Shilo founded software company Conduit in 2005. It reached a $1 billion valuation in May, 2012. That's the real valuation

GBP Austin Dimmer | Building a Software Company is Hard

Business of Software Blog

I’d like to set out by letting you know that creating a successful software business is extremely hard. The result of my research is that I have created a software program that enables me to control most of the features on my computer using voice control.

Dharmesh Shah – Valuation, Competition, Porter’s Five Forces and Culture

Business of Software Blog

This is a summary of Dharmesh Shah ‘s Business of Software 2012 presentation. Valuation. Valuation vs. Value. Valuation: What someone is willing to pay for the company at a given time. The valuation equation -> Valuation = Revenue x Multiplier.

Can Twitter Justify Its $11 Billion Valuation?

Inc Startups

A lot of entrepreneurs are probably watching the excitement over the approaching initial public offering of Twitter and wondering if they can get a similar valuation for their companies. Using those multiples, you''d get a valuation, on the high end, of about $4.5

10 Ways to Size Your Company’s Value for Funding

Startup Professionals Musings

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)?

Hugh opportunities do NOT command amazing pre-money valuations.

Berkonomics

Dave’s note: Popular Bill Payne returns this week with a thoughtful take on valuations. Yet, at the pre-revenue stage of development, angel investors price both companies at a pre-money valuation of $1.5

Public SaaS Valuations Are Diving. How Should You React?

Southeast VC

I received data 48 hours ago from Pacific Crest which shows valuations of SaaS companies in a sharp decline. Given 90% of our investments are into software companies, this is very relevant and I forwarded the data to a few of the entrepreneurs we work with.

LP 6

Speaker slide decks from Business of Software Conference USA 2015

Business of Software Blog

Speaker decks from Business of Software Conference USA 2015. Join the Business of Software Community. Get the latest updates from Business of Software free to you. Values > Valuations. from Business of Software. from Business of Software. Don’t Be The Last to Know from Business of Software. Join the Business of Software Community. Get the latest updates from Business of Software free to you. from Business of Software.

Ruby 10

Software Patents are Becoming a Tax on Innovation

Startup Professionals Musings

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. Yes, the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending.

Burnham's Beat: 2008 Software M&A: Year in Review

Burnham's Beat

Software IPOs. Software M&A. 2008 Software Stocks: An Oveview Plus The 10 Best and 10 Worst » 01/02/2009. 2008 Software M&A: Year in Review. Unlike the Internet M&A space , the public software company M&A market was actually fairly robust in 2008 with 33 deals worth over $40BN closing.  2008 continues the long term trend of increased public software company M&A.    # of Public Software Company M&A Deals.

IPO 24

Dharmesh Shah, CTO of HubSpot at Business of Software 2011. Building Big Ass Software Businesses.

Business of Software Blog

Dharmesh Shah - Building Big Ass Software Businesses: Insights and musings on the Business of Software. Dharmesh Shah is the founder and CTO of HubSpot , a venture-backed software company offering a hosted software service for inbound marketing. That sucked as he hates golf, but he discovered, you don’t have to play golf to be successful as a software entrepreneur. ” At what point you need humans to sell software?

Why tech solutions aren't just about IPOs and billion-dollar valuations

Inc Startups

While entrepreneurs make a lot of money selling their companies or taking them public, it's good to remember why businesses need software innovation in a crisis

Oracle: Time for some respect

deal architect

Oracle is skirting with a market valuation of $ 2oo billion. Enterprise Software (IBM, Microsoft, Oracle, SAP Wall Street is gushing. Whatever. I am not writing this to join their praises – I have never judged companies purely on their financial performance. I am more impressed.

Want to build a successful software business? Can you answer these 8 questions?

Business of Software Blog

Alex will be speaking and running a workshop at the  Business of Software Conference , Boston 24-26th October. If you are serious about building a sustainable, profitable software business, you should give some serious thought to getting there too.

BoS 2012: Videos of Business of Software talks all in one place.

Business of Software Blog

All of the keynote and Lightning Talks talks from the 2012 Business of Software Conference that we are making public are now online with the permission of their speakers. While Business of Software Conference won’t be livestreamed this year , we always want to share the ideas we discuss at the event with as wide an audience as possible. Business of Software 2012 Videos. PUBLIC: Dharmesh Shah: Valuation & competition – strategy for geeks & coders.

Coder 10

What's Your Software Company Really Worth?

Inc Startups

Here are the five things venture capitalists generally look at to peg your company's valuation. Trying to nail down a company valuation methodology for a software-as-a-service company from a venture capitalist is like trying to get a politician to stick to a position.

Mindbody Raises $50M at $450M Valuation; IPO Likely in 2015

Ask the Angels

Lizette Chapman of the Wall Street Journal talks to Rick Stollmeyer, CEO of MindBody software, which was funded by the Pasadena Angels, about their recent $50M raise and likely IPO in 2015.

Startups Should Revolve Around Their Founders if They Want to Succeed Big

Andrew Payne

From a statistical analysis of over 6,000 startups, the paper (and article) argue (roughly) that founders with board control, the CEO position, or both, can “harm the firm’s prospects, reducing pre-money valuation by up to 22%.” Furthermore, while I’m quite skeptical of private “unicorn” valuations, all but one at the top of that list have founder CEOs: Uber, Airbnb, Palantir, Snapchat, SpaceX, Pinterest, Dropbox, WeWork, Theranos, Lyft, and Stripe.

Four predictions for 2015

Version One Ventures

What used to be perceived as a 5x or 10x gap in valuation between the winner and a runner-up is now more widely seen as between 100x or even possibly 1000x.”. In a start-up environment that’s noisier than ever, break-out companies have an increasingly easy job of raising tons of money at high valuations while the second and third runs in a category often struggle. News 2015 Bitcoin Enterprise software mobile predictions Virtual reality

Dharmesh Shah on strategies for building great companies at Business of Software Conference 2012

Business of Software Blog

Dharmesh is a BoS regular but this was probably one of the talks of his life – a very practical guide to what strategy means for a software business. BUSINESS OF SOFTWARE – FOR PEOPLE BUILDING GREAT SOFTWARE BUSINESSES. Dharmesh Shah, Valuation and competition.

Ten Components of Startup Valuation For Investors

Startup Professionals Musings

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)?

Cracking The Code: SaaS Multiples: Recovery or Bubble?

Cracking the Code

Thoughts from a Venture Capitalist on Software, Software-as-a-Service (SaaS), Cloud Computing, Internet and more. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. software. (10). Software 2.0: Cracking The Code.

Cloud 22

Announcing Version One Fund II

Version One Ventures

Our companies’ collective valuation now sits at a stunning $600 million and they have gone on to raise over $130 million since we first invested in them. News Bay Area marketplaces platforms saas Seed round Series A round Software as a service Vancouver On behalf of our team at Version One, I am incredibly excited to announce that we have just closed our second fund. Version One Fund II is $35M, slightly larger than our initial fund.

Why This Startup You've Never Heard of Could Have the Most Successful Tech IPO of the Year

Inc Startups

Business-software maker Atlassian has built up a valuation of more than $3 billion without taking on any outside investment

Tonight We're Going To Party Like It's 1999

Launching Tech Ventures

Sunday, March 27, 2011 Tonight Were Going To Party Like Its 1999 by Tom Eisenmann Are we in a new bubble, as Steve Blank recently wrote, or do current high valuations for early- and late-stage consumer Internet companies reflect sound fundamentals, as argued by Ben Horowitz ? Valuations.

Lean 18

How SaaS + Mobile has changed our world.

Scalable Startup

At the time SaaS just wasn’t mature enough and people at the company weren’t comfortable enough to make the change; too many old habits of installing software. The software just doesn’t leave it’s cloud hosts anymore.

Huge Opportunities Do NOT Command Huge Pre-money Valuations

Angel Investing News

Yet, at the pre-revenue stage of development, angel investors price both companies at a pre-money valuation of $1.5 It is possible to grow a company to a valuation of $30 million on one or two angel rounds of investment. But, the working capital and management team necessary to grow a company quickly to sufficient revenues to justify a $200 million valuation will require raising lots more capital.

Fenwick VC Survey: Q2 Funding Valuations Shoot the Moon

allthingsd.com

Fenwick VC Survey: Q2 Funding Valuations Shoot the Moon. According to Fenwick & West’s latest Silicon Valley Venture Capital Survey , fundings in the second quarter of this year showed the highest valuation increases in more than five years. Skip to main content. -->.