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More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.
Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a captable simulator to help level the playing field.
The most serious unintended consequence occurs from “note waterfalls”— converting multiple notes that have multiple valuation caps. Many entrepreneurs lose track of what they have been cooking up in the captable. They do not recognize that they may have already contractually sold a meaningful portion of equity in their company.
EShares is an increasingly popular tool in our portfolio for tracking private company captables. We use the vendors of PE/VC investing data I list above to track the interests of potential private equity/VC coinvestors, and selectively introduce our companies as I build out a syndicate. .
There never has to be atime when you have no revenues. Some angel investors join together in syndicates. So the totalnumber of new shares issued is 750, and the captable becomes: shareholder shares percent -VCs 650 33.3angel 200 10.3uncle 50 2.6each founder 250 12.8employee 36* 1.8 In the Bay Area its the Bandof Angels.
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