Both Sides of the Table

AUGUST 3, 2010

How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. It is best not to buy your competitors – they’ll always want an unreasonable price and think of the sale as failure. It has awesome features that my main competitor doesn’t have.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

APRIL 27, 2010

But in our first year of sales (and those were really shitty years to be selling software) we sold $2.1 and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue. I learned about revenue recognition. I learned how to establish sales targets and how to manage a sales pipeline.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

Gust

NOVEMBER 1, 2011

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI.

Venture Capital 161

Venture Capital Valuation Pre-Money Valuation Post-Money Valuation 161

Both Sides of the Table

NOVEMBER 14, 2017

Throughout the first year we made many fixes and saw our revenue base in these markets accelerate so we felt we were ready to attack Los Angeles, amongst the most important storage markets in the country. An example of the systems companies build are pricing & revenue management tools to best help to optimize yield.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

JANUARY 4, 2014

– while the other might want a quick sale and pocket some bucks while the tech market is hot. It either needed to get more aggressive in pricing, pivot to a new business or business model or raise more capital (and take the dilution) in order to have more time to figure things out. Those are the easy cases.

Founder 340

Founder Cofounder Sacramento Technical Review 340

Both Sides of the Table

JUNE 5, 2011

Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. million post-money valuation with no revenue. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

DECEMBER 18, 2009

And for all of this we had no dilution and paid no money. That was our first year of sales. million in recurring revenue of which $600k came from Germany. We signed deals worth $1.2 million over 2 years that made us profitable in Germany from day 1. Any customer not willing to commit we didn’t sign. But we did $2.1

Germany 298

Germany Entrepreneur Merger Los Angeles 298

Both Sides of the Table

SEPTEMBER 29, 2009

Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million.

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. There are four problems: First, as the company raises more money, the value of your initial stock option grant gets diluted by the new money in.

Stock Options 335

Stock Options Stock Vesting Common Stock 335

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

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. Optimize for a W more than % dilution in these circumstances. Founders hate them because they’re dilutive.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

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

ReadWriteStart

SEPTEMBER 10, 2010

They already have several customers including some telcos, and are at about $350,000 in revenues. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. That's why, I advised Gio to keep going with further execution on his business and build more revenue traction.

Cloud 115

Cloud Silicon Valley Incubator Bootstrapping 115

Business Plan Blog

OCTOBER 4, 2013

If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. Rather, give titles such as VP of Engineering, Product/Technology, Sales, Marketing, Finance, etc. Hire a diversified base of sales reps.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Both Sides of the Table

MAY 7, 2016

The founders and team develop a huge confidence level that appropriately increases risk-taking, output, expansion, deals, revenue, press and everything that is a consequence of initial successes. Or some teams who start driving revenue paper over the fact that they aren’t acquiring customers profitably. Everything seems possible.

Churn Rate 150

Churn Rate Vesting Dilution Europe 150

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. Instead of funding, you pay the investors a structured royalty, which is a portion of the sales. Reasons for funding. ? Royalty based investment. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

ConversionXL

JULY 22, 2021

Understand and maintain them and your website can rank prominently, drive traffic, and help boost sales. Identifying and merging content targeting the same or similar keywords; Removing duplicate content that dilutes importance, and; Improving metadata so that users see what they’re looking for in search engine results pages (SERPs).

Technical Review 162

Technical Review SEO Software Review XML 162

Up and Running

JULY 1, 2020

You may grow to tap new markets or increase sales in your current markets. It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling. Will marketing for the expansion dilute marketing of your brand or other products?

Business Plan 152

Business Plan Forecast Operations Dilution 152

YoungUpstarts

SEPTEMBER 16, 2015

Raise too much capital at any given stage and suffer more dilution than is necessary – obviously not ideal. The best entrepreneurs raise enough money to achieve a set of interim milestones and then raise capital again at a significantly increased valuation. It’s part art, part science. Set Quantifiable Goals.

Valuation 100

Valuation Dilution Chicago Technical Review 100

View from Seed

APRIL 30, 2015

In many instances, you raise an institutional round to either fulfill a product strategy or go-to-market strategy or you’re increasing sales and marketing hires, so you have better visibility into what needs to happen in the next six, 12, 18 months. Traction and revenue? NVV: Is there any dilution? Business model?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Hearpreneur

JANUARY 30, 2022

Face-to-face engagement is important, especially at vital points in the sales cycle or while creating relationships. Thanks to Adam Wood, Revenue Geeks ! #7- 21- Make more money from sales. In 2022, every business that adapted and survived the pandemic will realize the importance of increasing revenue through online sales.

Entrepreneur 127

Entrepreneur Green Technical Review Social Media 127

ConversionXL

AUGUST 30, 2018

According to that same NNG research: Ecommerce sites can expect to double their sales. 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. Are sales up? What about user personas ?

Design 111

Design Framework Product Development Technical Review 111

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

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

Hunter Walker

JANUARY 2, 2017

Next Level: Buying Customers/Revenue/Distribution. For example, you would say “oh, sure this startup spends 5x LTV to acquire a new customer but once we plug them into our sales channel, it’ll drop to.25x It could lower earnings because of continued investment and share dilution. See Mint and Periscope as examples.

Technical Review 131

Technical Review Cap Table Acquisition Startup 131

betashop.com

OCTOBER 8, 2012

million registered users, 7500 supplier partners, 600 team members, and a run-rate of more than $150M in sales in just 15 months. At Fab, mobile is already 33% of our visits and sales and we just launched our mobile apps nearly a year ago. Don’t skimp on fundraising because of dilution fears.?. So, here goes. Keep at it.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Startup Professionals Musings

OCTOBER 13, 2021

It’s easy to say “yes” to one more feature request after another, until the potential for real impact gets diluted. Obsessive sales – must meet revenue goals. Otherwise, your most innovative and disruptive product thinking will be diluted and lost, killing your dream of a better world.

Dilution 334

Dilution Metrics Acquisition Revenue 334

Both Sides of the Table

JUNE 17, 2017

The most obvious way to explain this is with sales people. 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. The Nature of Revenue Matters Of course revenue alone won’t tell you enough.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

www.avc.com

SEPTEMBER 22, 2011

The other important data point is the number of fully diluted shares. The first bracket is the senior management team; the CFO, Chief Revenue Officer/VP Sales, Chief Marketing Officer/VP Marketing, Chief Product Officer/VP Product, CTO, VP Eng, Chief People Officer/VP HR, General Counsel, and anyone else on the senior team.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Both Sides of the Table

MARCH 21, 2010

Plus, we’re all allured by the false sense that our contract with BigCo is going to “make us&# because once they start using us it will spread like wildfire and the revenue will flow in. They negotiate a “master agreement&# to work with your company with some maybe minimum guarantees in terms of revenue.

Warrant 298

Warrant Dilution Startup Stock Options 298

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

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

YoungUpstarts

OCTOBER 16, 2016

But entrepreneurs face other concerns that compete with this growth focus, including hiring, maintaining current revenue sources and distinguishing themselves from the competition. You’ll be inundated with sales pitches, lame template emails, unsolicited voicemails and more. Know when to say “no.”.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

YoungUpstarts

MAY 6, 2019

What market are you targeting and how are you going to get sales? How much revenue are you generating on an annual basis? If you are getting funded for the first time, which means that you have not diluted the shares of your company, you will be receiving Series A funding. These partnerships need to bring in more revenue.

Startup 113

Startup Technical Cofounder Merger Early Stage 113

Duct Tape Marketing

APRIL 7, 2022

Look, if you work in sales, wanna learn how to sell, and frankly who doesn't check out the sales podcast, where host Will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. So I'm also maybe a little French too, that might have helped. Marcel Petitpas (01:46): I like it.

Cofounder 94

Cofounder Hosting Networking Software Review 94

Both Sides of the Table

APRIL 25, 2011

A great recent example of this was a successful group of entrepreneurs who had created a company that will do $10-12 million in revenue at their system integration business (read: services business) in 2011 after having done $5 million or so in 2010 and $2-3 million in 2009. Who are your competitors – how much do they charge?&#.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Startup Lessons Learned

AUGUST 24, 2009

When I reviewed a recent product development book, it immediately shot up to Amazon sales rank 300. And as everyone’s attention starts to focus on those same indicators, their value is being diluted. What is the right revenue model? Is that a lot? Is that good? In other words, what is the minimum viable product ?

San Francisco 113

San Francisco Lean Technical Review Distribution 113