Both Sides of the Table

MARCH 11, 2011

I thing I’ve learned over the years is that technology purists hate advertising even when it is that revenue stream that truthfully drives much of our industry. He took out an ad in the Yellow Pages (it was the early 80′s, pre Internet), which cost him $1,000 / month for a half-page ad.

Product 350

Product Tuvalu Dilution Incubator 350

Both Sides of the Table

APRIL 27, 2010

I learned how to get press coverage when we were no longer “hot.&# I learned how to manage costs effectively. and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue. and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

A Smart Bear: Startups and Marketing for Geeks

MARCH 1, 2010

Hanging your hat on just one advantage that you can own completely is stronger than diluting your message across many advantages. See, we don't line our pockets with that revenue, we spend it making you maximally effective. Don't dilute your message. And it's not just in face-to-face sales calls either. Do you have other tips?

Open Source 239

Open Source Dilution Software Development Software Developers 239

Both Sides of the Table

DECEMBER 18, 2009

The agreement was that both sets of investors would fund the combined entity, we would reduce overlapped costs and become a healthier company. We committed to cost focus, customer adoption and delivering our numbers. And for all of this we had no dilution and paid no money. In the morning I flew home. We signed deals worth $1.2

Germany 298

Germany Entrepreneur Merger Los Angeles 298

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? To reduce the impact of dilution, the expectation is that startup valuation should more or less double between the pre-seed to the seed, and seed to series A (ideally backed by reasonable traction/ revenue multiples).

Valuation 186

Valuation Software Review Generative AI Technical Review 186

View from Seed

OCTOBER 24, 2019

The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. No good investor would want the founder/CEO of a company to have insufficient ownership by the series A, and every founder I know is sensitive to taking too much dilution.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Both Sides of the Table

SEPTEMBER 29, 2009

Huge downturns have a real impact on the revenue line of start-ups and therefore the pressure on valuations. As a personal story, I sat on the board of one company with a very unhealthy burn rate relative to revenue or expected growth. While the company continues to perform well it has come at a cost.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Steve Blank

APRIL 10, 2019

We slept under the tables, and pulled all-nighters to get to first customer ship, man the booths at trade shows or ship products to make quarterly revenue – all because it was “our” company. Essentially the company sells them the stock at zero cost, and they reverse vest. Today that’s less true.

Stock Options 335

Stock Options Stock Vesting Common Stock 335

Both Sides of the Table

FEBRUARY 8, 2016

If you raised money in the past 2 years and have grown it is possible that your next round valuation might be flat (or lower) even though you have a higher revenue because investors may value your multiple differently. Pragmatic cost cuts are always possible and often productive. Founders hate them because they’re dilutive.

Burn Rate 150

Burn Rate Cap Table Dilution Balance Sheet 150

YoungUpstarts

JUNE 13, 2011

years, and had reached an average revenue level of $60 million with the range being from $5 million to $350 million. They end up trying to do too much for too many, which dilutes their focus and often the quality of their product or service. The problem is that too many entrepreneurs never learn to say ‘NO!’ Hiring smart.

Indianapolis 219

Indianapolis Minneapolis Kentucky Virginia 219

David Teten

AUGUST 19, 2019

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Rational burn profile, up to 50% of revenue at close, scaling down. Bigfoot Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 26, 2019

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. You’re not allocating enough costs to gross margin or the cost to acquire a customer. Priority depends on your goals (e.g.

Restful 202

Restful Founder Revenue Acquisition 202

YoungUpstarts

JULY 31, 2019

Founders need seed capital to get their operations up and running, and to begin generating revenue. They need to comply with laws, create back-end processes, and build prototypes — all of which cost money. Exacerbating the problem are the subjective standards by which many young companies are evaluated.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

View from Seed

APRIL 30, 2015

It can be lower cost and can either buy more time or accelerate growth. It’s generally got a lower cost compared to equity capital and can help support growth. Traction and revenue? But the costs are definitely there. Today, we wanted to share some basics of another source of capital: venture debt. Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

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. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. Incubators and Accelerators.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Up and Running

JULY 1, 2020

Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success. Doing so helped us avoid mistakes that could have cost us substantial time and money. To be honest, the plan showed we had limited opportunities.

Business Plan 152

Business Plan Forecast Operations Dilution 152

David Teten

JANUARY 19, 2021

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.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

The Next Web

SEPTEMBER 15, 2013

The most common example of an API strategy is around companies who aspire to build a developer community as a new revenue source or as the foundation of their business. They should not be trying to generate new revenue streams or reach new audiences through such programs. Twilio is an interesting example of such a company.

API 135

API Audience Dividend Programming 135

Startup Lessons Learned

JUNE 15, 2009

Who will ultimately bear the cost of their mistakes? There are a whole range of valid reasons why non-developers would want to dictate the production release schedule (Seasonal/timing issues, marketing, fulfillment concerns, documentation/training, revenue controls, legal/regulatory. How severely is failure punished?

Continuous Deployment 167

Continuous Deployment Software Review San Francisco Lean 167

Hearpreneur

JANUARY 30, 2022

Thanks to Adam Wood, Revenue Geeks ! #7- Many businesses are discovering that the key to successful marketing is interacting two-way with customers, not simply shouting marketing messages at increasingly dilute audiences. . With rising costs due to inflation, more businesses are laser-focused on revenue than ever before.

Entrepreneur 126

Entrepreneur Green Technical Review Social Media 126

Both Sides of the Table

JULY 16, 2013

Because at least while the VC spigot is open and flowing for high-potential individuals that fit a pattern that some VCs seem to favor they can access cheap capital that isn’t terribly dilutive and can use the to fund development and swing for the fences with limited focus on monetization. And the dilution that goes with it.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

ConversionXL

AUGUST 30, 2018

It costs money. It’s likely to be related to improving revenues, reducing costs, increasing the number of new customers, increasing the sales from existing customers, or increasing shareholder value. The finance team understands that content customers are less likely to churn and destabilize revenue flows. It costs money.

Design 111

Design Framework Product Development Technical Review 111

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. If you really don’t want to raise another round, then prove that to me based on what really matters: Revenue. This situation is not always in the best interest of founders.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. 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

YoungUpstarts

MAY 31, 2016

The single biggest reason that the average company struggles or even fails is due to their lack of focus and dilution of their greatest resource, which are people. He has helped grow Medtronic’s Surgical Technologies ENT/NT division from $100 million to approximately $2 billion in annual revenues over fourteen years.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

K9 Ventures

JUNE 12, 2012

Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing. If you really don’t want to raise another round, then prove that to me based on what really matters: Revenue. This situation is not always in the best interest of founders.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Occam's Razor

MAY 2, 2017

The very best analysts distill, rather than dilute. Outcomes: Revenue | Ideas Funded Behavior: Path Length | Cart Abandonment Rate Acquisition: Assisted Conversions | Share of Search. Every ecommerce site has to obsess about Revenue. With advertising revenue in a tailspin, it is more important than ever.

Metrics 143

Metrics Acquisition eCommerce Analytics 143

Duct Tape Marketing

APRIL 7, 2022

So a lot of agencies track revenue, some actually even track profit, but you, if we're gonna optimize, um, profitability, what, what should we be measuring? And that's mostly gonna be the labor cost of the work that we do for clients. Cost-based accounting on projects in your accounting tool. Marcel Petitpas (01:46): I like it.

Cofounder 94

Cofounder Hosting Networking Software Review 94

This is going to be BIG.

JANUARY 18, 2024

Still, there are a lot of downsides to taking venture money—the push to grow at all costs, our desire to be all up in your business, literally, and sometimes, we’re kind of obnoxious. They might not understand how a pre-revenue startup could be worth anything, let alone be valued at $5mm. It will save everyone a lot of cost and time.

.Net 88

.Net Cap Table Startup Technical Review 88

Up and Running

NOVEMBER 5, 2018

What will it cost to start that business? Many people underestimate startup costs and start their business in a haphazard, unplanned way. Estimating realistic startup costs is one of the key elements of your financial plan. What are startup costs? And it interferes with the estimates and dilutes their value.

Cost 150

Cost Balance Sheet Startup Intellectual Property 150

Startup Lessons Learned

AUGUST 24, 2009

As the costs of production fall, it’s getting easier and easier to send in a proposal or even a complete work. And as everyone’s attention starts to focus on those same indicators, their value is being diluted. What is the right revenue model? I’ve met a lot of gatekeepers in the past few months. ideas (e.g.

San Francisco 113

San Francisco Lean Technical Review Distribution 113

Startup Professionals Musings

MARCH 14, 2020

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Startup 308

ConversionXL

NOVEMBER 6, 2017

What works for first-time customers might have less of an effect on (and be diluted by) people who are returning to buy again. But a simpler and possibly more likely explanation that might be that the test variant worked less well because the compatibility of older browsers is worse, and quite often skipped, in QA to reduce costs.

Chad 112

Chad Mobile Technical Review Aggregator 112

Startup Professionals Musings

JANUARY 4, 2020

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. Here is where projections of cost, pricing, volumes and cash flow are critical. Are you flexible on the terms of the investment?

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? There are a million ways to do quick, easy, low-cost rounds with prices. How will you price the next round? Your A round? Him: On metrics. What proof points?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

APRIL 14, 2012

Is your crappy little 12-person company really worth they and their shareholders diluting by 2% given more than a decade they’ve put in building one of the Internet’s most solid business social networks? You just said, “nobody would take 1-2% dilution.” They’re worth $11 billion as of today. Hang on, Mark.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316