VC Cafe

SEPTEMBER 26, 2022

The press took notice, especially since just a few months later startups were laying off employees en-masse to cut costs. Sustainable growth: Prioritise sales efficiency over growth at all costs. Before product-market fit… just care about speed of iteration according to your customer feedback. Team, product, market.

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

ReadWriteStart

JUNE 1, 2020

The next reason is to establish a competitive advantage over your competition and quickly acquire a substantial market share. Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. Establish a competitive advantage. Both of which are expensive and time-consuming.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

NOVEMBER 25, 2020

I would summarize the qualms and feedback from professional investors as the following: Crowdfunding platform costs trickle down to angel groups. The new audit, due diligence, and liability requirements from the JOBS Act, now levied on equity crowdfunding portals, could dramatically increase the costs and restrictions on angel groups.

Equity 411

Equity Angel Groups Accredited Investor Due Diligence 411

Lightspeed Venture Partners

OCTOBER 7, 2012

This isn’t a company yet, it’s an idea, and the founder could do a lot more on his own to validate product-market fit before raising capital. As he said, “Great innovations solve problems or reduce costs. They were right to do so. He has not done so, and that is not a good sign. The entrepreneur was clearly desperate.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Feld Thoughts

FEBRUARY 9, 2016

Once again, as we find ourselves in the middle of a significant public market correction, especially around technology stocks, there’s an enormous amount of noise in the system, as there always is. Pragmatic cost cuts are always possible and often productive.” Then use the down round to clean up your preference overhang.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Startup Professionals Musings

AUGUST 6, 2023

I would summarize the qualms and feedback from professional investors as the following: Crowdfunding platform costs trickle down to angel groups. The new audit, due diligence, and liability requirements from the JOBS Act, now levied on equity crowdfunding portals, could dramatically increase the costs and restrictions on angel groups.

Angel Groups 201

Angel Groups Accredited Investor Due Diligence Equity 201

Both Sides of the Table

SEPTEMBER 27, 2010

We need venture debt, factoring companies and public markets. My wife worked at Google so while we had good income in Silicon Valley it’s hardly the life of luxury given the costs of housing. There is no way for people to keep prices down – it’s a competitive market. Tags: Tech Market Analysis.

Silicon Valley 308

Silicon Valley Liquidity Event Seed Stage Finance 308

Both Sides of the Table

FEBRUARY 14, 2016

I recently survey more than 150 VC friends from all stages and geographies what they thought about the market by asking “Which of the following statements best describes your mood heading into 2016?” I’ll spare you the math and point out that this means we funded 0.104% of the market. In short – no.

Valuation 150

Valuation Down Round Startup Later Stage 150

VC Cafe

JANUARY 29, 2024

That’s the case for most companies that are already in the market, especially if they raised funding at imaginary valuations before. Seed valuations are down “only” 57% compared to Q4 2021. Many startups extended runway, cut costs and took on painful down rounds or expensive debt to avoid raising in 2023.

Global 171

Global Generative AI Venture Capital Valuation 171

Startup Professionals Musings

MAY 20, 2016

I would summarize the views and qualms from professional investors as the following: Crowdfunding platform costs could trickle down to angel groups. These groups are now largely run by volunteers at no cost to entrepreneurs. Later funding rounds can’t deal with a thousand shareholders.

Angel Groups 136

Angel Groups Accredited Investor Equity Due Diligence 136

Both Sides of the Table

JUNE 5, 2016

The funding environment for tech startups is an ever shifting ground as we go through predictable shifts that go hand-in-hand with the slowing of the overall market. In other words, it isn’t that VCs suddenly got smart, it’s that the costs of starting a company went down dramatically. Non VC Growth Rounds. Rise of Angels.

Venture Capital 150

Venture Capital Silicon Valley Burn Rate LP 150

Mike Michalowicz

SEPTEMBER 29, 2014

For example, responding to a question about price you say, “that’s going to cost between $20,000 and $30,000.” 10,000 is a round number and that means that it is not specific. The client is either going to figure you have no real idea what something costs, or that you’re rounding up in anticipation of expecting to be negotiated down.

Down Round 117

Down Round Cost Customer Marketing 117

Both Sides of the Table

MARCH 30, 2016

It is an heroic accomplishment in a brutal fund-raising market in which only market leaders can bring in that sort of money. Every VC who’s been the business for a long time realized first hand that the VC markets were changing rapidly as early as Q3 of 2015. But of course public markets had begun gyrating. $30 million.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

NZ Entrepreneur

SEPTEMBER 16, 2020

This means that even though founders invest many years of their life studying markets and building their companies, and even though experienced investors pour billions of dollars into startups every year, 90% of the bets are wrong. Cost of goods sold (COGS). ” The Steps in Sensitivity Analysis: Figure out the variables.

Startup 94

Startup Sales Cycle Down Round Revenue 94

VC Cafe

NOVEMBER 30, 2022

Atomico’s founder Nicklas Zennstrom recently called the end of the high valuations era and urged founders and VCs to remove the stigma from down rounds. Growth at all costs is no longer an option. But how will the current market affect future unicorn creation? Global unicorn club (source: CB Insights ).

Israel 97

Israel Europe Balance Sheet Valuation 97

www.quora.com

SEPTEMBER 22, 2011

There's more visibility for the company, sure, but how clear is that vision after they've raised a seed round? This is a far cry from a sustainable business, product-market fit, and a long ways from profitability in most cases. They've got a handful of customers, maybe a few thousand users, and some initial traction.

Equity 40

Equity Employee Founder Cofounder 40

Both Sides of the Table

SEPTEMBER 28, 2014

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Growthink Blog

MAY 23, 2011

Technical progress and market traction are much slower and cost a lot more than anticipated. A " black swan " investor appears out of the blue and backs the company - less impressed by the technology than by the talent, desire, and grit of the entrepreneur. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Tim Keane

SEPTEMBER 17, 2009

Second, start-ups aren't immune from contextual issues, such as being tied to under-performing sectors of the economy, like housing, or participating in capital intensive high change markets like solar panels or wind turbines. All of that leads to a tighter money supply which tends to drive down prices.

Wisconsin 60

Wisconsin Valuation Angel Investor Startup 60

David Teten

AUGUST 7, 2019

To simplify, there are two classic approaches to public markets investing. The first is Momentum Investing , “a strategy to capitalize on the continuance of an existing market trend”, which usually meaning that the price has been rising in the recent past. As a venture capitalist, should you be a Momentum or a Value investor?

Venture Capital 60

Venture Capital Valuation Stock NDA 60

Altgate

MARCH 8, 2009

Growth stage investors are usually the Series B or C investors who come in when the product is in the market but there is little or no revenue and the team is probably in the 20-something range with the goal to ramp it up to 40-50 employees with the new money, build out a sales team, etc. Early stage investing is complicated, hard work.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

crowdSPRING Blog

MAY 10, 2013

These posts and videos are about logo design , web design , startups, entrepreneurship, small business, leadership, social media, marketing, and more! The Damaging Psychology of Down Rounds | by Mark Suster – [link]. Twitter Link Roundup #177 – Small Business, Startups, Innovation, Social Media, Design, Marketing and More.

Social Media 93

Social Media Small Business Design Media 93

Scalable Startup

OCTOBER 26, 2011

The first venture round is often based on an idea, past successes, a business plan, or a market hunch. The current phenomenon of Internet multi-millionaires recycling their money back into the startup markets is creating “super” angels like Ron Conway. Where is the market going? Is it positioned correctly?

Mezzanine 22

Mezzanine Due Diligence IPO Angel Investor 22

Berkonomics

OCTOBER 5, 2023

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. There is an art to efficient management of a process, whether that is the process of bringing a product to market from R&D to production or developing a new product’s launch program.

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Berkonomics

AUGUST 10, 2017

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. There is an art to efficient management of a process, whether that is the process of bringing a product to market from R&D to production or developing a new product’s launch program.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

Berkonomics

MARCH 30, 2010

Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. There is an art to efficient management of a process, whether that is the process of bringing a product to market from R&D to production or developing a new product’s launch program.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Both Sides of the Table

SEPTEMBER 18, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. A down round? Cashflow projections?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. With the public markets down, these groups began writing down Unicorn valuations. 2015 was the exact opposite.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.paulgraham.com

APRIL 28, 2010

As a company gets more established,its valuation gets closer to an actual market value. And since I knowfrom my own experience that the rule against buying stock fromfounders is a stupid one, this is a natural place for things togive as venture funding becomes more and more a sellers market.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Reid Hoffman

JUNE 8, 2021

And all of the other smart and operational decisions that have enabled Airbnb to weather the storm and go on to have one of the most successful public market debuts. The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Gust

SEPTEMBER 17, 2014

Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. A down round? Cashflow projections? I’m not sure.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

FEBRUARY 4, 2016

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. But these data points are often lagging indicators and perhaps a better barometer of the future would be to gather data on VC perceptions in the market right now.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Reid Hoffman

JUNE 8, 2021

And all of the other smart and operational decisions that have enabled Airbnb to weather the storm and go on to have one of the most successful public market debuts. The burden [should] just be that we care; that if we learn something, we improve it, and that we don’t only use single output metrics and its growth at all costs.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Scalable Startup

FEBRUARY 1, 2013

And then five years later computers became — they dropped half in price and then the big insurance companies could buy them, and that’s when Thomas Watson, who ran IBM at the time, was quoted as saying, “There’s only a market need in the world for five computers.”. So GoodData is at the intersection of kind of marketing and business.

Software Review 22

Software Review Startup Venture Capital Stock 22

Both Sides of the Table

OCTOBER 18, 2015

There is a lot of uncertainty about the state of the private, high-growth technology markets and the venture capital markets that underpin them. There is nobody to blame for this abandonment of common sense – it is simply the market being the market and we’re doomed to repeat history. It’s just a market.

IPO 150

IPO Venture Capital LP SEC 150