Startup Professionals Musings

MARCH 14, 2020

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Startup 308

Startup Professionals Musings

JANUARY 4, 2020

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection.

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

Startup Professionals Musings

OCTOBER 7, 2022

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection.

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

Startup Professionals Musings

DECEMBER 11, 2022

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Steve Blank

APRIL 26, 2022

Some even insisted that all prior preferred stock had to be converted to common stock. Startups that can’t find product/market fit and/or generate sufficient revenue and/or lacked patient capital are scrambling for dollars – and the bottom feeders are happy to help. Why do VCs Do This?

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

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. Team: Hires, fires, departures, responsibility changes, major promotions, and your org chart. The seed stage is all about traction.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

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

Up and Running

MAY 23, 2016

In fact, SaaS industry revenue is projected to grow from $49 billion in 2015 to $67 billion in 2018, a compound annual growth rate of approximately eight percent. At this stage, simply list your primary revenue streams and your key expenses. At this stage, simply list your primary revenue streams and your key expenses.

Software Review 74

Software Review Software Delaware Forecast 74

abovethecrowd.com

FEBRUARY 24, 2015

As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. You must subtract it from your top-line revenue. You should not pay a net revenue multiple for a gross revenue disclosure.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Tim Keane

JANUARY 12, 2010

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model. Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Agile VC

FEBRUARY 28, 2013

increasing dividends or issuing preferred stock). iCloud subscriptions) it’s about 6% of Apple’s revenue. To put that in perspective, all the chargers and other accessory stuff amounts to about 50% of the revenue Apple generates from content + software + services. Some people think Apple should buy Netflix.

Hungary 168

Hungary Dividend Vertical Preferred Stock 168

YoungUpstarts

JUNE 26, 2020

When a VC’s website says they do “early stage” – to a VC that means a product has already been built and generating some revenue, while to an entrepreneur it means “just an idea.”. Setting aside the issues of valuation of common stock vs. preferred stock, what I really didn’t understand was that a valuation is a set of expectations.

Finance 205

Finance Silicon Valley Valuation Startup 205

Startup Professionals Musings

AUGUST 1, 2016

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Startup Professionals Musings

MARCH 7, 2015

Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection.

Preferred Stock 120

Preferred Stock Exit Strategy Equity Angel Investor 120

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Preference shares. A class of stock with special rights as described in your startup is called preference shares. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Lightspeed Venture Partners

OCTOBER 1, 2012

On the other hand, a 7% royalty means that Kevin and Barbara got to keep 93% of future revenues. These are typically called “ participating preferred ” structures, and are quite uncommon in West Coast VC deals these days, although they were once more common a couple of decades ago, and are still seen in some East Coast deals.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

ReadWriteStart

JANUARY 28, 2022

The market regards equity as an ownership “share” in a corporation’s income revenue stream. These characteristics, comparable to those found in the fixed income market, can convert into common stock, call clauses, and other features. It is not possible to shift costs and revenues in a linear manner.

Valuation 108

Valuation Equity Warrant Common Stock 108

Growthink Blog

MAY 10, 2012

Put everything else on your "wish list" to buy with revenues from sales or additional financing. The name is derived from the class of preferred stock investors receive in return for their capital. Necessary machinery, an initial website, your first batch of inventory-things you can't function without.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Berkonomics

DECEMBER 20, 2018

Arthur: The usual royalty revenue sharing funding agreement is for an agreed period – and commences on the generation of revenues by the royalty issuer (company licensing the IP.) That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business.

IP 54

IP Intellectual Property Investment Bankers Product 54

Berkonomics

DECEMBER 20, 2018

Arthur: The usual royalty revenue sharing funding agreement is for an agreed period – and commences on the generation of revenues by the royalty issuer (company licensing the IP.) That party is only concerned with its royalty revenues and growth – and not profit from or valuation of its business.

IP 48

IP Intellectual Property Investment Bankers Product 48

The Startup Lawyer

MARCH 11, 2010

Each time a new set of docs get released, I don’t cringe because it means I then have to remove the hockey stick from my revenue projections. Tags: Preferred Stock legal documents seed funding startup Startup Lawyer. You can’t be a startup lawyer and not want startups to have a better chance at succeeding.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

The Startup Lawyer

MARCH 11, 2010

Each time a new set of docs get released, I don’t cringe because it means I then have to remove the hockey stick from my revenue projections. Tags: Preferred Stock legal documents seed funding startup Startup Lawyer. You can’t be a startup lawyer and not want startups to have a better chance at succeeding.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

Agile VC

APRIL 17, 2011

How They Make Money: Majority of Kayak’s revenue actually comes from advertising on their site (55%), not lead generation or referral fees to travel suppliers as you might think (more on this below). Financial Snapshot: 2010 Revenue: $170 million. Revenue growth: 51% YoY (2010), 1% YoY (2009), 131% YoY (2008).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Gust

MAY 24, 2012

Options and warrants, when issued, are also typically exercisable for shares of Common Stock. By contrast, venture capital and angel investments normally take the form of Preferred Stock with rights and preferences set forth in the company’s Certificate of Incorporation and other governance documents.

IPO 159

IPO Equity Common Stock Stock 159

David Teten

MARCH 14, 2018

We particularly help companies in winning revenue from our LP network and raising capital for subsequent rounds from top-tier late-stage investors. Typically they get cofounder common equity, in addition to the preferred stock that a conventional VC gets. – Launch a “ venture studio ” or “ foundry ”.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Both Sides of the Table

APRIL 14, 2010

In straight preferences the investors only get this money in a “downside&# scenario as protection that they get their money back if your company isn’t successful. Usually some combination of 1-4 means that you get polite “passes&# from most VC’s you see. But pass they will. Time suck.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. He might also want preferred stock, meaning a specialclass of stock that has some additional rights over the common stockeveryone else has. This is a good plan for someone with kids, because it takes mostof the risk out of starting a startup.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36