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Revenue Recognition’s Effect On M&A

YoungUpstarts

There has been a lot of chatter regarding changes in revenue recognition criteria lately, but the effects it will have on the evaluation of companies planning an exit is just beginning to emerge. Specifically, the new standard will follow a five step model for revenue recognition: Identify the contract (the deal that has been reached).

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WP Engine passes $100M in revenue and secures $250M investment from Silver Lake

A Smart Bear: Startups and Marketing for Geeks

The Silicon Valley-oriented technology press outlets don’t cover us because we’re not in San Francisco, even though we’re more successful than most of the startups they cover. Late last year we passed $100M in annual recurring revenue. This week we closed $250M in financing from Silver Lake , the premier technology private equity firm.

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Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. In terms of acquisition, they ask more specifically: “How can we trade balance sheet assets (cash, equity) in exchange for executing our strategy better?”.

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Why GE’s Jeff Immelt Lost His Job – Disruption and Activist Investors

Steve Blank

This article first appeared on the Harvard Business Review blog. He sold off slower-growth, low-tech, and nonindustrial businesses — financial services, media, entertainment, plastics, and appliances. GE’s gross margin was 21% last year, compared with 28% at United Technologies and 30% at Siemens.

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How To Evaluate Your Company’s Value

YoungUpstarts

This is a very introductory place to start, but if your company owns the building, machinery, inventory, and/or technology in which it uses to operate, there is often significant value in this in and of itself. Look at Revenues. Figure Out the Net Assets of the Business.

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What’s Really Going on in the VC Industry? What Does it Mean for Startups?

Both Sides of the Table

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. It takes less to start a business these days – We all know that it takes less to start a technology company these days.

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Stock Market Drops. Then It Rallies. What Happens Next for Funding?

Both Sides of the Table

Companies with less than $2 million in revenue were asking for $50-60 million valuations and getting them. Let’s review all of our existing investments. On the positive side, corporate profits are up, their balance sheets have been repaired and they have recapitalized themselves to have lower amounts of debt relative to equity.

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