Berkonomics

NOVEMBER 7, 2024

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Careful about “hockey stick” forecasts. VC rule of thumb Most VC’s look for a 10x opportunity – that is – ten times increase in the valuation from investment to liquidity event.

Hockey Stick 62

Hockey Stick Liquidity Event Valuation Balance Sheet 62

Startup Professionals Musings

MARCH 13, 2020

In that context, I offer the following financial projection strategies, from my own experience: Forecast a business that has plenty of room to grow quickly. Even if you work harder than everyone else, you probably won’t stay ahead of rising costs and new competitors. > Define an exit strategy for investors to liquidate their share.

Liquidity Event 308

Liquidity Event Forecast Exit Strategy Bootstrapping 308

Startup Professionals Musings

FEBRUARY 13, 2016

The business model has to clearly define who is your customer, market penetration expected, how much customers pay versus total costs and the investment required to sustain cash flow. What are your forecasts for revenue, expenses and cash flow? Forecasts are evaluated as a level of commitment and a measure of your business savvy.

Sweat Equity 120

Sweat Equity Advisory Board Liquidity Event Startup 120

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Careful about “hockey stick” forecasts. At the least, historical numbers must include the latest income statement and balance sheet, showing activity through the latest period.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. This allows them to calculate burn rates, break-even points and forecast the company valuation over time. How the solution and business model work to fund the business.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Startup Professionals Musings

AUGUST 13, 2012

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. Financial forecast and metrics. See where your cashflow bottoms out. Exit strategy.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

Startup Professionals Musings

MAY 13, 2011

Explain in terms your mother could understand, and quantify the “cost-of-pain” in dollars or time. The most credible sizing approach is to do your financial model first with the volume, cost, and pricing parameters you want. Financial forecast and metrics. See where your cashflow bottoms out. Exit strategy.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290