VC Cafe

FEBRUARY 27, 2024

A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? And why do we still sometimes hear about pre-seed rounds that look more like a series A in pricing and size? So far there’s not much that has changed, so why should pre-seed look any different in 2024?

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Both Sides of the Table

MAY 19, 2013

Yet our initial customer success didn’t translate into big revenue growth and we faced issues such as: Do we support developers, end-users or both? I have a very public seed stage investment policy and awe.sm Do we price for volume of consumption or for enterprise integration with other platforms? I saw it first hand.

Technical Review 303

Technical Review Cofounder Analytics Founder 303

Agile VC

JUNE 5, 2012

Both companies generate direct revenue from their platform in the form of a revenue share / platform tax (typically 30%) on software and digital goods sold through the respective platforms. Facebook’s direct platform revenue accounted for about 15% of the company’s overall sales whereas Apple’s was less than 1%.

Java 170

Java Flash Software Azure 170

Both Sides of the Table

JULY 23, 2014

The rise of “micro VCs” or seed-stage funds. Unprecedented revenue growth + companies staying private longer =. There has been much discussion in the past few years of the changing structure of the venture capital industry. On the surface the narratives have been. Lots of new entrants moving to capture this value =.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Mucker Lab

FEBRUARY 24, 2021

Since our inception, Mucker has focused on writing seed stage checks to invest in compelling companies and founders. In 2020 we kicked off a separate fund called Mucker Early to focus on investing just past the seed stage, writing $3-5m checks when companies have found product-market fit and are ready to scale.

Seed Stage 135

Seed Stage Term Sheet eCommerce Technical Review 135

Both Sides of the Table

OCTOBER 6, 2010

Everyone has their own definition of momentum (user numbers, revenue, channel partners, biz dev deals, whatever). Mostly by early stage investors talking about getting smaller exits. But if you identify investors with whom you’d like to work here’s my advice: 1. They might want you to start lean.

Early Stage 360

Early Stage Startup Venture Capital Seed Stage 360

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. These usually play a role in the very early stage of your business, primarily pre-revenue. So, I would suggest that you bootstrap during the inception stage. ?

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

VC Cafe

JULY 5, 2010

-based Angel capital with early stage technology companies in Israel, and do so in a way that substantially mitigates the risk of seed stage investing. Essentially, investors are receiving equal shares of 10 Israeli seed stage start-ups for relatively small capital. VCs are investing in later stage companies.

Israel 106

Israel Technical Review Software Review Seed Stage 106

YoungUpstarts

AUGUST 10, 2017

For the last eight quarters, the number of angel and seed stage deals has declined, according to an Eisner Amper VC report. Investors want to see in-depth financial reports that reinforce the startup has an organized business model with potential for revenue growth. That downward trend includes the most recent quarter from 2017.

Software Review 124

Software Review Technical Review Due Diligence Startup 124

View from Seed

SEPTEMBER 4, 2018

Most of these rhyme with what we’ve said in the past, but some have also evolved to fit the changing landscape and our own convictions about what really matters for founders and their investors at the seed stage. However, our overall goal is to invest in the full spectrum of seed. Belief #1: The best time to invest is early.

North America 120

North America Seed Stage Early Stage Lead Investor 120

Gust

OCTOBER 20, 2011

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures. As can be seen the average (mean) pre-money valuation for recent pre-revenue deals is $2.1

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

View from Seed

NOVEMBER 12, 2014

Below, Josh talks about designing features from nothing and how to make important design choices during the pre-seed and seed-stage phases of startup growth. Any success (growth, revenue, or profits) we have will follow from that. You Found a Problem to Solve. Great … But Now What?

Design 330

Design Product Cofounder Boston 330

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

Agile VC

FEBRUARY 5, 2014

This is a logical thing to do… when we started LinkedIn, my mentor Reid Hoffman instilled a mantra of Growth –> Usage –> Revenue which still holds for many consumer companies. Arguably revenue is the best signal of product-market fit for B2B startups. But B2B startups need to take a different tack.

Revenue 234

Revenue Product B2B Marketing 234

VC Cafe

FEBRUARY 21, 2023

Some studies suggest that the best consumer subscription companies are able to retain 65% of their revenue after one year. Good and great net revenue retention ( source ) Another factor to consider when it comes to achieving these metrics is the cost of acquisition, or CAC. The benchmarks are based on the US market.

Retention 109

Retention Conversion Churn Rate B2C 109

This is going to be BIG.

AUGUST 22, 2012

It’s basically working with potential outside partners to reach your business goals--which could be revenue, distribution, financing, product development, awareness, etc. Plus, in such a connected world, at the seed stage, the "outside" bar is low--a good article, review, demo can be a difference maker and get you on the right radars.

PR 160

PR Technical Review Seed Stage Design 160

ReadWriteStart

NOVEMBER 14, 2011

in revenue. revenue) before they write a check. At the seed stage, your investors will be people who are more interested in you and your team than your product. Over 2500 organizations have signed up to use our platform and thousands of people submit thousands of files via the system every day. So get out there.

Silicon Valley 126

Silicon Valley Montana Curation Seed Stage 126

Hunter Walker

JULY 22, 2014

Hey founders, want to hear something incredibly frustrating about seed financing? You know the one that inevitably has you at $100 million in revenue by Year Three? Just* committing to grow customers or revenue or usage can still create a hollow company. I don’t believe the forecast you show me. Yeah, that one.

Forecast 99

Forecast Early Stage Seed Stage Startup 99

This is going to be BIG.

MAY 5, 2011

I'm a strong believer in having a board, even at a seed stage, to report to and set strategy with. Most successful businesses have a plan for real revenue right off the bat and a clearer value proposition than "let the community figure it out". Advisors, investors and board members come in all shapes and sizes.

Technical Review 111

Technical Review Due Diligence Seed Stage Lean 111

A Smart Bear: Startups and Marketing for Geeks

JULY 24, 2012

If you see someone going, hey, I’ve sort of built it for, maybe you could call it profitability, but showing traction revenue, and now I’m ready to scale it big, and I don’t know if I should still charge. So VCs invest in different stages. You have seed stage, A round, B round, C round, D round.

Silicon Valley 204

Silicon Valley Software Review Internet Technical Review 204

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

View from Seed

OCTOBER 15, 2014

Over the summer, based on feedback from our portfolio and the broader startup community, NextView created pre-formatted board deck templates for seed-stage startups — part of our Growth Guides series. As Rob Go wrote , board decks and board meetings can waste loads of time at the seed stage.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Professionals Musings

OCTOBER 5, 2015

I challenge any entrepreneur, for example, to define the difference between "seed-stage" and "early-stage" financing. Asking for early-stage money before you have customers and revenue will likely kill your credibility with real investors. A seed-stage “super angel.”

Seed Stage 120

Seed Stage Finance Early Stage Startup 120

Startup Professionals Musings

MAY 1, 2011

If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Seed-stage means promising companies that don’t yet have a revenue stream, and may not yet have a proof of concept. Series-seed round. Super Angels.

Early Stage 231

Early Stage Seed Stage Angel Investor Silicon Valley 231

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). The VC focus on quick growth is not without reason.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

View from Seed

NOVEMBER 18, 2014

Generate Real Revenue. Another approach to raise Series A is to drive meaningful revenue. Similar to a revenue-focused strategy, this approach goes further than vanity metrics in demonstrating ultra-high engagement and penetrations into a small number of users/buyers. Craft a Small Scale Machine. Go for your Series A earlier.

Syndicate 333

Syndicate Syndication Seed Stage Startup 333

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

Startup Professionals Musings

JULY 22, 2020

For example, if you have a proven product, real revenue, a big potential market, and are ready to scale up the business, every investor will be interested. On the other hand, if you are a new entrepreneur, still in the idea stage, professional investors will only tell you to come back later when you have traction (customers and revenue).

Angel Investor 370

Angel Investor Intellectual Property Investment Bankers Private Equity 370

View from Seed

JANUARY 27, 2021

In our first two funds, we’ve been fortunate to seed five unicorns ( Attentive , Whoop , Grove Collaborative , Skillz , and TripleLift ) and 10 companies with $100M+ exits or recent valuations. Thirteen of these 15 companies were seeded pre-revenue, and many were at concept stage or had rudimentary early products.

LP 411

LP Early Stage Seed Stage Venture Capital 411

Startup Professionals Musings

JULY 16, 2012

If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Seed-stage means promising companies that don’t yet have a revenue stream, and may not yet have a proof of concept. Series-seed round. Super Angels.

Early Stage 253

Early Stage Finance Seed Stage Entrepreneur 253

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. Another Area of Concern is in the Seed Investor Class. But there’s no doubt, some will make money.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

View from Seed

NOVEMBER 14, 2019

But for less well known founders, a series A requires pretty significant revenue, growth, and retention metrics. Because of this, there is a glut of companies out there that can’t quite get to a series A and are raising second or third seed rounds. So, investors can wait around asking for more traction.

Seed Stage 331

Seed Stage Cofounder Retention Founder 331

Mucker Lab

OCTOBER 10, 2023

Sally suggests considering a full-time Sales Leader when a startup has two or more AEs and SDRs and is on the verge of hitting a $1 million Annual Recurring Revenue (ARR). However, for early-stage startups with limited resources, a fractional CRO (Chief Revenue Officer) can be a cost-effective option.

Early Stage 78

Early Stage Sales Developer Development Team Review 78

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). The VC focus on quick growth is not without reason.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

View from Seed

MARCH 15, 2017

VC evaluation of seed-stage startups can seem arbitrary or imitative at times. Internally, the scarcity of tangible business metrics – product usage or revenue multiples for example – can make an investment decision feel daunting. Any seed stage company’s strategy is a constant work-in-progress.

Due Diligence 265

Due Diligence Seed Stage Portfolio Metrics 265

mashable.com

NOVEMBER 3, 2010

For the first-time entrepreneur or founder looking for seed stage funding, this circle can be especially difficult to penetrate. Mashable Mashable reached out to angels, seed stage investors and VC firm partners and asked them to share their wisdom with the rest of us. and Path Intelligence.

Angel Investor 80

Angel Investor Startup San Francisco Social Media 80

Gust

NOVEMBER 15, 2012

And there are others that people think are teeny little wannabes with a dozen or so employees…that have $25 million in highly profitable revenues with hockey stick growth and zero debt!

Seed Stage 131

Seed Stage Hockey Stick Cap Table Liquidation Preference 131