Startup Professionals Musings

JANUARY 28, 2011

The cost of giving up more equity early is often more than offset by the increased flexibility to recover from mistakes. Your startup will require more money than you expect, and the cost of going back to the well is very high. Pay people with equity or future revenue. Include buffer when you raise money. Great strategy.

Burn Rate 231

Burn Rate Startup Salary Equity 231

Both Sides of the Table

MARCH 21, 2013

I think it’s important for enterprise startups to layer in professional services into your revenue stream. deliver profitable revenue that while on gross margins of 50% vs. software at 85-95% it is still profits to help you cover fixed costs. Control Size of PS Revenue Relative to Software Business. configuration.

Software Review 321

Software Review Software IP Technical Review 321

Both Sides of the Table

JUNE 22, 2011

Ah, but today’s Internet companies have real revenue! In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. And for some that means that despite waiting they may see worse valuations in the future than now.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

A Smart Bear: Startups and Marketing for Geeks

MARCH 21, 2017

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. Even for startups, it takes years for a new product to become good enough to demand many millions of dollars in revenue.). Yet mobile advertising revenues were paltry.

Balance Sheet 242

Balance Sheet Vertical Acquisition Revenue 242

Steve Blank

JUNE 27, 2017

Its employees and investors don’t depend on an existing revenue stream. Uber – current valuation >$70 billion – knew the day they started that their ridesharing service violated the law in most jurisdictions. Airbnb – current valuation $31 billion – allows people to rent out their homes, rooms or apartments to visitors.

Startup 306

Startup New York City Valuation Distribution 306

Startup Professionals Musings

SEPTEMBER 30, 2013

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Up and Running

DECEMBER 16, 2021

In order to avoid formal valuation report costs, shareholders utilize benchmarks of the industry and rules of thumb to estimate the ballpark values of their interests. This article will cover all about the rule of thumb business valuation approaches, when to use them, and their pros and cons.

Valuation 86

Valuation .Net Metrics Balance Sheet 86

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Both Sides of the Table

SEPTEMBER 29, 2009

They should heed the age old advice that raising slightly more money while you can is always better than trying to optimize future valuations. Should VC’s really be impacted by public market valuations when the money that they’re investing today should be for returns in 7-10 years? Short answer – yes.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

AUGUST 31, 2012

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Startup Professionals Musings

JUNE 17, 2011

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Steve Blank

MARCH 12, 2014

We realized that past K-12 Entrepreneurial classes taught students “the lemonade stand” version of how to start a company: 1) come up with an idea, 2) execute the idea, 3) do the accounting (revenue, costs, etc.). We wanted to teach our students how to think like entrepreneurs not accountants.

Lean 335

Lean Customer Development Startup Silicon Valley 335

Both Sides of the Table

NOVEMBER 14, 2017

MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. As companies get this initial customer feedback on their product they start to have to ask harder questions about unit economics: How much does it cost us to acquire a new customer? and we were met with weak demand, slow growth and high costs.

Operations 286

Operations New York City Technical Review Startup 286

ReadWriteStart

OCTOBER 7, 2010

As a thumb rule, try to get enough validation so that you can get to at least a $2 million pre-money valuation before raising equity capital. That is debt financing that converts into equity at the Series A valuation once the price for that is set. (I As long as the deals cover his infrastructure costs, he should not be worried.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? Everyone moved to earlier stage – part of the decline in late stage investing is the ‘baggage’ of companies that previously raised money at inflated valuations that they would struggle to justify in today’s market.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Startup Professionals Musings

SEPTEMBER 16, 2023

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Who would not want to join the unicorns (recent startups with a current valuation of over $1 billion)? The cost of social media done well is low. Later cleanup can double your costs and risks. Marty Zwilling

Intellectual Property 261

Intellectual Property Entrepreneur Angel Groups Social Media 261

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue. The founders.

Founder 281

Founder Technical Review CTO Hire IPO 281

Startup Professionals Musings

JUNE 26, 2013

It’s higher risk, but higher return, to pick the big winners early, before Angels have set unreasonable valuations and restrictive terms. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

Startup Professionals Musings

MAY 22, 2010

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 222

Intellectual Property Sweat Equity CTO Hire Fractional CTO 222

Startup Professionals Musings

JUNE 25, 2012

Just don’t quit your day job before your new company is producing revenue. Use this approach before you have a real valuation, a real product, or any real customers. Find a customer who would benefit greatly from getting your product first, and be willing to advance you the cost of development. Friends and family.

Technical Review 257

Technical Review Bootstrapping Venture Capital Incubator 257

Startup Professionals Musings

SEPTEMBER 9, 2010

It’s higher risk, but higher return, to pick the big winners early, before angels have set unreasonable valuations and restrictive terms. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

Startup Professionals Musings

MARCH 16, 2011

Just don’t quit your day job before your new company is producing revenue. Use this approach before you have a real valuation, a real product, or any real customers. Find a customer who would benefit greatly from getting your product first, and be willing to advance you the cost of development. Friends and family.

Technical Review 233

Technical Review Bootstrapping Startup Venture Capital 233

Both Sides of the Table

APRIL 18, 2019

The valuations were too high! The company started the year with no revenue and at it’s peak had a run rate well in excessive of $100 million / year. The key is being able to dial back variable costs during these period. Their time is free and there is no “driver COGS” (costs of goods sold). We are now in Act IV.

South America 250

South America Global New York City Software Review 250

Startup Professionals Musings

JUNE 21, 2020

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $1 trillion. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Revenue 434

Revenue Valuation Viral Retention 434

Both Sides of the Table

MARCH 1, 2011

Around 2003, Quigo was doing tens of millions of dollars in revenue with two main products: a ready-to-use, search engine marketing solution for advertisers called FeedPoint and a contextual advertising platform for publishers called AdSonar. Quigo Lands Overture as Client, Rejects Their Acquisition Offer. Contest details here :

Semantic 302

Semantic Acquisition Valuation Angel Investor 302

Both Sides of the Table

AUGUST 9, 2011

Valuations were enormous relative to progress in companies. Companies with less than $2 million in revenue were asking for $50-60 million valuations and getting them. I spent my days meeting companies, figuring out what areas of the market interested me and trying to get a sense for how VCs thought about fair valuations.

Stock 305

Stock Technical Review Marketing Greece 305

Startup Professionals Musings

AUGUST 25, 2018

The cost of rolling out a business has never been lower – it only takes a few hundred dollars to incorporate a Limited Liability Corp (LLC) online, create your own website, use social media to get attention, and you are in business. In the early Internet days, it would cost a million dollars to get this far.

Technical Cofounder 184

Technical Cofounder Intellectual Property Silicon Valley LLC 184

Startup Professionals Musings

NOVEMBER 4, 2011

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

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

YoungUpstarts

JUNE 29, 2020

Medical industry manufacturers and suppliers can benefit from the injection molding manufacturing process because of its cost-efficiency. estimates in their recent report that medical products will have a very high global market valuation, crossing 30 billion US dollars by 2026. Check here for more details on injectiion molding.

Demand 173

Demand Product Artificial Inteligence Software Review 173

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Pragmatic cost cuts are always possible and often productive. Be realistic on valuation.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

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. ValuatIon should be a function of value, not ego. 2022 VC Market Update Median valuations January through April Pre-seed: $7M ? $9M

Founder 187

Founder Startup Valuation Pre-Money Valuation 187

Startup Professionals Musings

SEPTEMBER 23, 2010

It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Finalize your financial model.

Angel Investor 224

Angel Investor Intellectual Property Technical Review Elevator Pitch 224

Steve Blank

MAY 9, 2017

Continuous innovation requires the imagination and courage to challenge the initial hypotheses of your current business model (channel, cost, customers, products, supply chain, etc.) Today open source software has slashed the cost of software development from millions of dollars to thousands. The founders.

Restful 249

Restful Silicon Valley San Jose Puerto Rico 249

SoCal CTO

OCTOBER 5, 2010

5 great viral marketing campaigns (and what small businesses can learn from them!) - crowdSPRING Blog , September 13, 2010 At crowdSPRING we talk a great deal about how we can leverage our limited marketing resources to drive traffic and revenues and build strong community. Except they won’t be called Product Managers. That crazy chicken.

Technology 191

Technology Product San Francisco CTO Hire 191

Startup Professionals Musings

AUGUST 25, 2017

In case you haven’t noticed it, the rapid evolution of do-it-yourself (DIY) facilities for developers, including 3-D printers, SketchUp and makerspaces such as TechShop , have scaled down the cost of prototypes and hardware design by an order of magnitude. Quick low-cost design and fabrication alternatives are extremely valuable.

Technical Cofounder 153

Technical Cofounder Intellectual Property Wiki Cofounder 153

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270