Both Sides of the Table

JUNE 5, 2011

The earlier you invest the higher the chances the company won’t work out and thus you pay a lower price than later-stage investors. million post-money valuation with no revenue. So how exactly are prices determined? There is no great science to it. I raised my A round at a $31.5 It was early 2000. That was market.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

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.” Usually that’s the point in the meeting where a VC realizes that this meeting isn’t going to go very well.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Startup Professionals Musings

SEPTEMBER 11, 2017

As best, you should reserve this option for later stage VC discussions, once you have a well-proven business model, large market following, and substantial revenue. More importantly, make sure first that you really want to give up the entrepreneur lifestyle for the challenges of a public company executive.

IPO 218

IPO SEC Prospectus Technical Review 218

Startup Professionals Musings

AUGUST 31, 2019

As best, you should reserve this option for later stage VC discussions, once you have a well-proven business model, large market following, and substantial revenue. More importantly, make sure first that you really want to give up the entrepreneur lifestyle for the challenges of a public company executive.

IPO 210

IPO SEC Prospectus Startup 210

YoungUpstarts

APRIL 22, 2014

Shark Question #2: What were your total revenues for the last quarter and last 12 months, including profit margins? To get these “numbers,” do a review of total revenue and expenses, review by product or service line, and a profit-margin analysis – all of which can all be obtained from your company’s income statement.

CPA 160

CPA Technical Review Later Stage Equity 160

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

This is going to be BIG.

SEPTEMBER 30, 2012

How else can you explain this headline matching a story about a professional social network still trying to explore revenues raising $17mm on an $80mm valuation? venture capitalists are now asking tougher questions about start-ups' revenue and profits.". Perhaps I need to rethink that. What follows in this story is pretty laughable: ".venture

Venture Capital 120

Venture Capital Marketing Term Sheet Software Review 120

The Startup Magazine

AUGUST 11, 2023

This could be a proportion of the company’s equity or investment; in other instances, it could be a portion of its later-stage profits. The criteria change after a company reaches the growth stage when it is deemed to have attained product market fit.

Seed Stage 148

Seed Stage Technical Review Early Stage Due Diligence 148

VC Cafe

SEPTEMBER 22, 2022

“The Centaur is a business that reaches $100 million of annual recurring revenue (ARR)—a rare breed of cloud business, part of an elite subset of the growing unicorn herd.” The term ‘Centaur’, coined by venture capital firm Bessemer, indicates companies that achieved $100M in annual recurring revenue (ARR).

Software Review 109

Software Review Israel B2C Open Source 109

Both Sides of the Table

MARCH 1, 2016

Some LPs have privately speculated that later-stage VCs may have a field day in the next 18 months, buying up large positions in firms with strong revenue at attractive prices given the recent squeeze on funding. But of course, for every angle of the market where one person sees caution, another spots opportunities.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Startup Professionals Musings

MAY 4, 2016

Before you bring on partners, develop intellectual property, raise capital, or generate revenues, you need to establish an official business entity. You don’t have to be a heavily funded later stage startup to get access to “big data,” customer analytics, and metrics dashboards. Measuring progress with big data and analytics.

Intellectual Property 120

Intellectual Property Startup Angel Groups Social Media 120

VC Cafe

JULY 5, 2010

Only $24M of that went to seed stage companies in Israel despite the disproportionately large number of early stage start-ups as compared to start-ups in initial revenue or growth stages. Janvest: To my previous answer – the market for seed stage companies is not crowded at all in Israel. Janvest: Yes.

Israel 106

Israel Technical Review Software Review Seed Stage 106

VC Cafe

APRIL 29, 2020

According to the Covid-19 impact report by research firm Beauhurst: 5,070 UK companies are at a ‘severe’ or ‘critical’ risk 615K startup and scaleup jobs are at risk Later stage startups are at the most risk Across the board, tech sectors and verticals are the most likely to experience a positive or low impact.

Israel 124

Israel SBA Technical Review Startup 124

Startup Professionals Musings

MAY 18, 2020

Most new teams are geographically dispersed these days anyway, so paying rent for an office should be differed to later stages when revenue is plentiful. Defer your desire for expensive perks and vacations until later when you have time for them. Favor profitability over revenue and user growth.

Hockey Stick 423

Hockey Stick Bootstrapping Sweat Equity Intellectual Property 423

NZ Entrepreneur

FEBRUARY 27, 2020

This decline has also become evident in startup accelerator programs shifting their focus on later-stage scale-ups that provide higher returns. Capital funding for early-stage companies is drying up and becoming harder to find. Each stage of tech company growth has unique challenges.

Developer 74

Developer Early Stage Later Stage Acquisition 74

The Next Web

SEPTEMBER 13, 2013

The rest of Asia is still developing with far more angel and early-stage investors than mid-to-later stage folks. Singapore is by far the most developed behind those big three markets with government schemes attracting over a dozen early stage firms to set up shop here (e.g.

Asia 132

Asia Silicon Valley India Term Sheet 132

Startup Professionals Musings

FEBRUARY 1, 2015

As best, you should reserve this option for later stage VC discussions, once you have a well-proven business model, large market following, and substantial revenue. More importantly, make sure first that you really want to give up the entrepreneur lifestyle for the challenges of a public company executive.

IPO 120

IPO SEC Prospectus Startup 120

Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. If you’re an early stage company, that number may be zero. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. This math works in a normal market…. The World Turned Upside Down.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

OnlyOnce

MARCH 14, 2011

We all knew if the feature or function that the client was asking for was within the realm of the possible. • We were very, very focused on creating customers and revenue —We were a startup. If we drove revenue above costs, we got to take home a salary. They come in awfully handy in funding new initiatives.

Software Review 67

Software Review Development Team Review Later Stage Technical Review 67

Up and Running

AUGUST 19, 2014

I like how the Angel Capital Association describes the difference between angels and venture capitalists: “Angels generally invest their own money in start-ups and very early stage companies, while VCs mostly provide capital they have raised from others to later-stage businesses for growth.”. 51 percent). ” - Gena H.,

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Startup Professionals Musings

FEBRUARY 15, 2023

Most new teams are geographically dispersed these days anyway, so paying rent for an office should be differed to later stages when revenue is plentiful. Defer your desire for expensive perks and vacations until later when you have time for them. Favor profitability over revenue and user growth.

Equity 349

Equity Hockey Stick Bootstrapping Sweat Equity 349

Both Sides of the Table

JULY 27, 2014

We both agree that the later-stage valuations are being driven up to a point that feels irrationally priced [he uses b-round SaaS valuations as an example and I am willing to be even more broad based]. Most of those industries are fee-based and are competing on revenue growth. I don’t totally agree with that view.

Valuation 309

Valuation Pre-Money Valuation Non-Compete Later Stage 309

ConversionXL

JUNE 2, 2022

In this article, you’ll learn how to define your ABM strategy so you can target the right accounts and increase your revenue. Think of it as a filter that helps you find the highest chance of return on investment, revenue potential, and profitability. Cloud-based data warehouse Snowflake had an ambitious goal to triple its revenue.

Customer 98

Customer Marketing Channel Acquisition 98

View from Seed

APRIL 30, 2015

NVV: Let’s talk about the seed stage specifically. With venture debt as a source of low-cost capital to fuel growth or buy time during later stages, should a founder approach their fundraising from VCs any differently today ? Traction and revenue? NVV: What do debt providers look for in a company’s track record?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Steve Blank

JUNE 11, 2013

The test is: If you add one more sales person or spend more marketing dollars, does your sales revenue go up by more than your expenses? What are revenue strategy and pricing tactics? These sources are a lot more forgiving of iterations and pivots than later-stage venture-capital funds. When to raise money.

Venture Capital 335

Venture Capital IRR Liquidity Event Business Model 335

thebarefootvc

JANUARY 27, 2014

I think that later stage valuations are frothy (for reasons I explain below) while earlier stage valuations are starting to stabilize from previous highs (with the exception of the superstar serial entrepreneur) - turns out scaling in a sea of competition (both startup and entrenched) is not so easy.

Technical Review 63

Technical Review Valuation Venture Capital Investment Bankers 63

View from Seed

MARCH 19, 2015

He’s dubbed the approach “ pretotyping ,” and it shares many of the same principles as both its similar-sounding (if later-stage) cousin, prototyping, as well as the more well-known lean startup movement. After five years, the company was sold for a fraction of the money we had raised — and spent.

Product 120

Product Technical Review Marketing Lean 120

Both Sides of the Table

DECEMBER 3, 2013

I’m super proud to announce that DataSift has just completed a $42 million financing round coming at the end of a year where its revenue grew several hundred percent year-over-year. Considering our revenue is SaaS revenue this achievement is even more remarkable. I’m an early-stage investor. Not so DataSift.

Iran 358

Iran API San Francisco Nigeria 358

Gust

DECEMBER 25, 2013

To start with, a pre-revenue mobile company cannot expect to raise anything from “the VCs” Venture capital funds invest in only one out of every 400 companies seeking funding, so the odds of your particular startup getting funded are astronomically against you. Good luck with your venture!

Revenue 136

Revenue Angel Investor Mobile Venture Capital 136

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. There was later-stage capital provided by Morgan Stanley, NewView Capital, Goldman Sachs and others that gave us a long-term outlook.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Steve Blank

JUNE 15, 2011

Long before others, they saw that these applications could have hundreds of millions of users with “off the chart&# revenue and profits. The awareness phase is where other later-stage investors start to notice the momentum, bringing additional money in and pushing prices higher.

Silicon Valley 331

Silicon Valley Stealth Valuation Mississippi 331

David Teten

SEPTEMBER 5, 2014

I’ve written on the expert network industry a fair amount in the past: see How to Earn More Consulting Revenue from Expert Networks and How Executives Can Work with Private Equity and Venture Capital Portfolio Companies. We’re not mainly for B2B companies or later stage companies or anything like that.

New York 114

New York Technical Review Networking Advisory Board 114

Both Sides of the Table

FEBRUARY 15, 2016

If you raised $10 million at a $40 million pre-money on a company with limited revenue and if your investors are telling you that they’re concerned about your future because they doubt that outsiders will fund you at your current performance level then I would be more cautious with my burn rate – even if it means slashing costs.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Startup Professionals Musings

JUNE 13, 2020

Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds. In fact, the reality is quite the opposite. Of course, between these extremes is a large overlap of interest and potential.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

David Teten

SEPTEMBER 23, 2017

Even for later-stage companies with predictable financials, the lack of liquidity, audited financials, and standardized metrics creates real challenges to scaling quantitative investing. Later stage investors are using private company marketplace services focused on more established companies, listed below under “Exit Investments”.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

David Teten

DECEMBER 3, 2019

Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. Later stage investors are using for sourcing private company marketplace services focused on more established companies, listed below under “Step 11: Exit”. They read reviews of the products of target investments.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Steve Blank

JUNE 15, 2010

Certain VC’s like the new class of Super-Angels and small VC funds specialize in the early stage of a startup where you are searching for a business model. And some larger funds that specialize in later stage deals may have a partner or two who likes to invest at this stage.

Founder 232

Founder Vesting Later Stage Early Stage 232