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

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

Both Sides of the Table

SEPTEMBER 18, 2014

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. Convertible notes have both features in them but for some reason entrepreneurs don’t understand it.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

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

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis. Note that “housekeeping” doesn’t mean “not important.”

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Up and Running

SEPTEMBER 13, 2016

Corporations and LLCs are required to keep their business finances separate from the personal accounts of their owners, while sole proprietors do not face such restrictions. Keeping your personal and business finances separated in business and personal bank accounts will make tax season far less complicated.

Small Business 60

Small Business CPA Finance Warrant 60

Startup Company Lawyer

MAY 4, 2009

If a founder’s company raises more than $50,000 in debt or equity financing, excluding funds from the founder, within 18 months of formation, then the founder must pay a tuition fee of $4,500, which is used to cover the Institute’s expenses in providing the program. June 23rd, 2009: Create a revenue model for your business.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For

Finance 134

Finance Convertible Security Equity Seed Stage 134

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Because many of these businesses dont yet have revenue, valuation discussions arent very scientific, and the process requires some haggling. Arizona Bay has also blended equity payments with revenue-sharing deals.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Both Sides of the Table

MARCH 11, 2010

It places undue pressure early in the company’s history to “do big things&# when sometimes what is warranted is more prudence. Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. Your revenue will take longer to ramp then you think. add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Up and Running

FEBRUARY 17, 2016

In this two-part guide to starting a brewery, we’re going to talk with brewers who’ve been there-done-that, and we’ll get insights from experts in supporting industries such as insurance and finance, as well as discuss regulatory issues. In part two, we’ll discuss finances, insurance, and regulations for breweries. Relationships.

Oregon 60

Oregon Jordan SBA Cofounder 60

YoungUpstarts

SEPTEMBER 26, 2013

An example of residual benefits would be service revenue from product sales. If a technology company sells data management systems to the healthcare industry, its residual benefits come from the ongoing service revenue from their software sales. Would outsiders (bankers and investors) help with financing the transition of the business?

Warrant 202

Warrant Demand Revenue Restful 202

YoungUpstarts

OCTOBER 9, 2018

More debt financing, especially for a risky proposition such as entrepreneurship, may not be easily forthcoming from banks and other sources. You may need to tweak your business model over several cycles to assure continuous revenues. No entrepreneurship is warranted without a good business idea.

Warrant 164

Warrant Salary Demand Revenue 164

Lightspeed Venture Partners

DECEMBER 10, 2012

Revenue is driven by children’s parties, which cost $600-$4,000 for a two hour party for 15 kids, which apparently is the market price for kids parties in LA. The space can host 6-9 parties per weekend, and they generated $350,000 in revenue last year. This is a loan with a 15% warrant attached at a zero strike price.

Covenant 162

Covenant Warrant Southern California Los Angeles 162

Gust

SEPTEMBER 17, 2014

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. If you want to give them a 33% discount you offer them half of a $1 common-stock warrant for every $1 share they purchase.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

ReadWriteStart

JANUARY 28, 2022

The market regards equity as an ownership “share” in a corporation’s income revenue stream. Warrants are a kind of equity that are often attached to a corporate bond issuance or preferred stock to make the transaction more appealing to investors. It is not possible to shift costs and revenues in a linear manner.

Valuation 108

Valuation Equity Warrant Common Stock 108

ConversionXL

NOVEMBER 17, 2022

In thinking about the bigger goal of digital transformation, 46% say they have been able to identify and create new product and revenue streams, and 45% of organizations are now using data and analytics to develop new business models. A high bounce rate warrants further investigation. Is your landing page design confusing?

Analytics 106

Analytics Metrics Channel Campaign 106

Austin Startup

AUGUST 20, 2017

Startups often hand out shares, options, and warrants for employees and for contractors rendering needed services. Messy cap tables can come back to haunt you when you do a financing or sell the company. I am very surprised when that cool thing actually meets a customer need or drives revenue.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

ReadWriteStart

FEBRUARY 24, 2011

That means that less than 1% of the entrepreneurs who apply succeed in getting financed. I have a fundamental observation to make here that seems to be lost in the noisy universe of entrepreneurs' obsession with fund-raising: Most companies should not raise external financing. A sustainable business = (customer + revenue + profits).

Incubator 116

Incubator Silicon Valley Idaho Entrepreneur 116

This is going to be BIG.

SEPTEMBER 12, 2018

We’re pre-revenue and we have a team currently building a beta product that will be launched in four weeks. That the market size justifies venture financing.” With some time left on the clock, ask them if you believe this warrants a deeper dive in another meeting. Is this a stage and sector that is a fit with your fund?”

Warrant 99

Warrant Acquisition Finance Revenue 99

Gust

DECEMBER 8, 2011

From choosing a legal entity or jurisdiction to properly documenting IP assignments and stock issuances to complying with securities laws and avoiding potentially enormous tax penalties in the future, there is plenty here to warrant consulting a professional. Sales contracts accounting for significant revenue.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

View from Seed

JUNE 16, 2015

In my opinion, VCs shy away from directly answering the questions pertaining to “at what point a company is fundable” or give a generic answer regarding revenue. For ecommerce: >$500K revenue/month. We expect that a half to two-thirds will achieve product/market fit and warrant further investment.

Boston 120

Boston Syndication Syndicate eCommerce 120

The Startup Magazine

JUNE 1, 2023

We’re hitting record revenue months, weeks, and margins. As a founder, ask yourself – does your business actually warrant VC funding? Don’t be afraid to pivot The collapse of SVB spurred us to do a deep evaluation of how we’re generating revenue and value for customers. And you know what we found?

Early Stage 146

Early Stage Los Angeles Silicon Valley Cofounder 146

YoungUpstarts

MARCH 25, 2019

Nevertheless, the East provides countless opportunities covering a wide range of sectors, such as information and communication technology, energy, and finance. By this time, consumption will have already risen and a significant portion of the population will have had a steady revenue growth.

Israel 113

Israel Russia China United Kingdom 113

Up and Running

SEPTEMBER 26, 2016

For startups and high-growth businesses, as you scale and encounter new milestones and obstacles, you will be faced with the question of how to finance and plan for that growth. Luckily for founders, the ways in which you can finance your startup are varied based on your business model, your preference, your goals, and timeline, and so on.

Covenant 60

Covenant Institutional Investors Balance Sheet Warrant 60

Growthink Blog

MAY 21, 2014

Now Berkshire Model companies, as entities with fundamentally investment vs. operating mindsets more naturally position, language, and network their businesses in finance contexts. Investment Flexibility. Let’s explain this by example.

San Diego 72

San Diego Warrant IRR Investment Bankers 72

BeyondVC

JUNE 11, 2007

In the last six months, we have augmented some of our existing venture financing with venture debt as the market has become quite competitive which means pricing and terms are getting more attractive for all of us. The trick for entrepreneurs is to look at bringing on debt concurrent or soon after your close of equity financing.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60

BeyondVC

JUNE 11, 2007

In the last six months, we have augmented some of our existing venture financing with venture debt as the market has become quite competitive which means pricing and terms are getting more attractive for all of us. The trick for entrepreneurs is to look at bringing on debt concurrent or soon after your close of equity financing.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60

Berkonomics

FEBRUARY 9, 2023

Satisfy the seller’s need to claim a higher sales price victory by moving a substantial part of the price into a future earn–out or using the target company’s own cash to pay part of the price, or asking the seller to finance a significant piece of the sale. Ask for extended terms well beyond sixty or ninety days.

Naming 62

Naming Warrant Private Equity Valuation 62

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders. instrument (for a lack of a better name).

Dilution 54

Dilution Equity Warrant Distribution 54

ConversionXL

JULY 7, 2020

Even industries like finance can gain traction on Pinterest. Since finance is one of the most competitive and expensive niches on Google Ads , it’s a unique—if challenging—opportunity on Pinterest. They did it by: Focusing on personal finance, which allows them to showcase moving stories of individuals. But it can be done.

Marketing 114

Marketing Viral Campaign Search 114

Berkonomics

JANUARY 26, 2017

Satisfy the seller’s need to claim a higher sales price victory by moving a substantial part of the price into a future earn–out, or using the target company’s own cash to pay part of the price, or asking the seller to finance a significant piece of the sale. Ask for extended terms well beyond sixty or ninety days.

Naming 48

Naming Warrant Private Equity Valuation 48

dondodge.typepad.com

JANUARY 15, 2011

It isnt always possible to have a competitive bidding situation at each financing round so here are some guidelines for funding sources and percentages. Friends & Family can usually raise between $30K and $300K and usually take an interest bearing note that is convertible into stock at the next financing. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

Occam's Razor

AUGUST 28, 2017

Why the scale at which we can (/have to) solve the problems is already well beyond the grasp of the fundamental strategy most companies follow: We have a bigger revenue opportunity, but we don’t know how to take advantage? I assure you, skepticism is warranted. Why is this not yet another programmatic moment.

Artificial Inteligence 140

Artificial Inteligence Saudi Arabia Algorithm Analytics 140

www.chubbybrain.com

SEPTEMBER 28, 2011

spent $20 million to get back to the same revenue that I had when I was CEO. created a vastly higher cost structure; I had 80 people mostly on base salaries under $100,000 and was bringing in revenue at the rate of $20 million annually. .”). Finances were just one part of the story. During this year they.

Software Review 79

Software Review Startup Technical Review Vesting 79

Both Sides of the Table

OCTOBER 18, 2015

“Trade in an asset at a price that strongly deviates from an asset’s intrinsic value” The arguments against that, “This time the startups have real revenues!” “A surge in prices, more than warranted by fundamentals & usually in a particular sector. More than warranted.

IPO 150

IPO Venture Capital LP SEC 150

Hearpreneur

JANUARY 7, 2025

6- Intentional simplicity fuels growth Photo Credit: Reagan Bonlie 2024 underscored the power of intentional simplicity in both business and personal finance. Additionally, macroeconomic pressures pushed many businesses, to diversify revenue streams and adopt flexible models for growth. Thanks to Tayelor Kennedy, FemFounder ! #6-

Entrepreneur 144

Entrepreneur Technical Review Agile SEO 144