Business Model Down Round Revenue 
VC Cafe
FEBRUARY 27, 2024
A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? We’d like to see that the relevant functions are covered (who’s writing code?
Both Sides of the Table
JUNE 22, 2011
Ah, but today’s Internet companies have real revenue! New investors hate down rounds. Those with strong business models suddenly stand out when the tide goes out. I said that at the Founder Showcase, too. and profits! Sure, that makes them better companies than those of 12 years ago. That’s a fact.
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ReadWriteStart
JUNE 1, 2020
Funding might be a need in some cases — but it’s not an absolute necessity. ? The business should be self-sustainable. 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. Incubators and Accelerators.
Lightspeed Venture Partners
OCTOBER 7, 2012
The two founders invested $40k in the business, and plan to license it rather than manufacture it because manufacturing seems too hard. They won a design award at a trade show, but have no revenue and no orders. Kevin questioned the use case since bowls are ubiquitous. The company still had $2M in inventory on the books.
Steve Blank
APRIL 26, 2022
For the common shareholders (employees, advisors, and previous investors), a cram down is a big middle finger, as it comes with reverse split – meaning your common shares are now worth 1/10th, 1/100th or even 1/1000th of their previous value. (A A cram down is different than a down round. Why do VCs Do This?
Both Sides of the Table
FEBRUARY 14, 2016
forward revenue for SaaS businesses when in the years before it had been less than 5x. Why Down Rounds are Harder Than You May Think. Down rounds are hard. A slight down round is achievable but massive “hair cuts” are very hard to do. This corrected only to go back up to 13.4x
NZ Entrepreneur
SEPTEMBER 16, 2020
For example, “How will unit cost affect our capital requirements and how will product pricing affect revenue?” It isn’t good enough to just say ‘what does halving my revenue do to the business?’ This is more important to startups that are in the pre-revenue phase, when products are under development.
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