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

Startup Professionals Musings

APRIL 4, 2022

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Intellectual Property 261

Intellectual Property Technical Review Incubator Bootstrapping 261

David Teten

AUGUST 20, 2019

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. ” .

Revenue 60

Revenue Cofounder Founder Venture Capital 60

Both Sides of the Table

MAY 24, 2021

It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales. This “overnight success” was first financed in 2004. This is true in consumer but it’s also true in enterprise software.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

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. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Bigfoot Capital. Capital need of up to $1.5M

Revenue 60

Revenue Technical Review Software Review Equity 60

VC Cafe

FEBRUARY 27, 2024

especially if the startup already has a product and revenue? While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing. A founder asked me what makes a $2M round “pre-seed”? Pre-seed tends to be about developing an MVP and generating early traction.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

The Startup Magazine

JUNE 4, 2023

In a perfect world, small businesses would have an endless stream of revenue coming in and there wouldn’t be need to worry about financing. Sometimes businesses have to get creative when it comes to their small business financing, especially when revenue is low. However, we all know that’s not the case.

Finance 109

Finance Revenue Small Business Bootstrapping 109

Both Sides of the Table

DECEMBER 11, 2022

Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. How might our next phase of the journey seem brighter, even with more uncertain days for startups and capital markets? What happened? Until we weren’t.

Valuation 466

Valuation San Francisco Ratchet Liquidation Preference 466

David Teten

AUGUST 19, 2019

Does the traditional VC financing model make sense for all companies? A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. So what is Revenue Based Investing? Absolutely not.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

The Startup Magazine

AUGUST 11, 2023

The following is a condensed explanation of seed funding: Seed money is a form of early-stage financing that new businesses receive from investors in exchange for a share of ownership in the company. Seed venture capital firms can make more significant follow-on investments to keep or increase their equity stake in the company.

Seed Stage 126

Seed Stage Technical Review Early Stage Due Diligence 126

Both Sides of the Table

SEPTEMBER 15, 2022

At our mid-year offsite our partnership at Upfront Ventures was discussing what the future of venture capital and the startup ecosystem looked like. Should SaaS companies trade at a 24x Enterprise Value (EV) to Next Twelve Month (NTM) Revenue multiple as they did in November 2021?

Technical Review 416

Technical Review Pre-Money Valuation San Francisco Valuation 416

ReadWriteStart

OCTOBER 20, 2023

The Venture Capital Influence The role of venture capital (VC) has become increasingly prominent in shaping the tech startup scene. Diversify Revenue Streams Relying on a single income source can be risky. It’s not just about demographics but recognizing their pain points, preferences, and aspirations.

Technical Review 137

Technical Review Startup Silicon Valley Agile 137

Startup Professionals Musings

JUNE 30, 2019

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Intellectual Property 219

Intellectual Property Technical Review Startup Incubator 219

Startup Professionals Musings

FEBRUARY 19, 2013

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Intellectual Property 309

Intellectual Property Technical Review Venture Capital Startup 309

Both Sides of the Table

SEPTEMBER 18, 2014

On the phone … Me: So, you raised venture capital? It’s like we need a finance 101 course for entrepreneurs. Revenue multiple? In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. We raised a seed round.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

David Teten

MARCH 5, 2021

What can we learn from the best 40 venture capital investments of all time? BCG (June 2018): “Startups founded and cofounded by women actually performed better over time, generating 10% more in cumulative revenue over a five-year period: $730,000 compared with $662,000.”.

Cofounder 78

Cofounder Founder Technical Cofounder Technical Review 78

Startup Professionals Musings

JULY 14, 2014

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Entrepreneur 283

Entrepreneur Intellectual Property Technical Review Incubator 283

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. Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Growthink Blog

MAY 20, 2011

So, Mike tells me he wants to raise a first round of venture capital based on a $100 million valuation. Now, anyone who knows anything about venture capital will literally laugh when they read a line like that. And how most likely, the chance of him raising venture capital with just an idea was zero.

Venture Capital 109

Venture Capital Valuation NDA Non-disclosure Agreement 109

Startup Professionals Musings

APRIL 24, 2011

I just read the Q1 2011 report from CB Insights , which shows venture capital is back. billion to work across 738 financing deals with U.S. Your friends and family are really the only answer until you have a significant revenue stream. Back to VCs, Silicon Valley venture capital firms are still the most active.

Venture Capital 233

Venture Capital Revenue Elevator Pitch Silicon Valley 233

Hunter Walker

OCTOBER 14, 2024

HW: Sanzo was founded, and thrived, through a time where traditional venture capital firms got excited about – and then became more disillusioned – with DTC brands. What was it like seeing some folks raise tens of millions of dollars, and where has your financing mostly come from?

New York City 89

New York City Hockey Stick Distribution Angel Investor 89

Both Sides of the Table

JULY 23, 2014

There has been much discussion in the past few years of the changing structure of the venture capital industry. The rise of alternative sources of capital (crowd funding and the like). The overall trends in our industry have breathed a new life into the venture capital industry. The iPhone was released.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Startup Professionals Musings

JANUARY 12, 2018

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Only one-third make it past their tenth anniversary. It always reduces risk to plan your business first.

Intellectual Property 134

Intellectual Property Technical Review Startup Incubator 134

Both Sides of the Table

SEPTEMBER 22, 2012

He also nails the reason why venture capital is still necessary to grow large businesses quickly in a world where the costs of running startups have fallen dramatically. After all, growth equals high valuations and loads of venture capital! In revenue terms our first two years of sales were $2.1 And headlines.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

MAY 28, 2018

There are many things a VC is looking for in reviewing your business plan but beyond things the like the quality of revenue, margins, OPEX and CAPEX there’s a really simple rule I call, “Cash In, Cash Out, Milestones Achieved.” Most VCs lead one round of financing in your company and are looking for other VCs to lead subsequent rounds.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

abovethecrowd.com

NOVEMBER 28, 2022

At least for companies generating meaningful revenue, investors should look to have an annual audit with one of the Big Four accounting firms, or one of the more reputable smaller firms like Grant Thornton. The post Venture Capital Red Flag Checklist appeared first on Above the Crowd.

Venture Capital 113

Venture Capital Non-Compete Government Delaware 113

Startup Professionals Musings

JULY 1, 2017

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Product Development 177

Product Development Cost Developer Product 177

David Teten

MARCH 8, 2021

Keith Harrington of Novel Growth Partners and Founder, Revenue-Based Finance Network , just posted the recording of an interview with me on revenue-based investing ; flexible VC ; and their future. If this was helpful to you, please sign up for my newsletter.

Revenue 78

Revenue Finance Video Networking 78

Haystack

NOVEMBER 25, 2018

venture capital deals, a spike in mega-financings where it’s common to see not only $100M private rounds, but companies that raise two or three types of financings like this in the same calendar year! 5/ The Enduring Allure Of Platform Potential: Revenue is important. Revenue acceleration is, too.

Technical Review 127

Technical Review Open Source Software Review Venture Capital 127

YoungUpstarts

JUNE 26, 2020

If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. For some entrepreneurs, raising financing can seem like a full time job, particularly in these trying times. He is also a venture partner at several VC firms. Who is in your tribe?

Finance 205

Finance Silicon Valley Valuation Startup 205

Steve Blank

APRIL 26, 2022

Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. Other times it was simply a take-it-or-leave-it, here are the new terms. They’re Back.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

View from Seed

OCTOBER 24, 2019

Pre-seed investing should be super simple, so any signs of pro-rata rights, tranched financings, charging the company for value-added services, etc. As an inexperienced founder, you are very likely to take at least two rounds of financing before a series A, so the round to try to skip is any sort of second seed. should be avoided.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

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.

Founder 278

Founder Technical Review CTO Hire IPO 278

Startup Professionals Musings

JULY 8, 2015

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. It always reduces risk to plan your business first. Commit to a major customer.

Entrepreneur 120

Entrepreneur Intellectual Property Technical Review Incubator 120

YoungUpstarts

DECEMBER 19, 2017

Determining how to finance your business is an important decision with big consequences. There are several ways to approach funding, but there are two main sources of financing: debt and equity. Debt Financing. Debt financing is where you borrow money from a lender that you will later pay back with interest.

Finance 138

Finance Angel Investor Equity Startup 138

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. rollout support.

Software Review 321

Software Review Software IP Technical Review 321

ReadWriteStart

OCTOBER 2, 2021

And even though an LLC is legally required to report its revenues, profits, and losses, it does not have to pay corporate income taxes on profits. Lower tax rates allow an LLC to be more flexible with finances. While LLCs cannot issue stocks, they can sell bonds to investors.

Technical Review 158

Technical Review LLC IPO Stock 158