Both Sides of the Table

DECEMBER 5, 2010

billion in annual subscription revenues not including advertising or eCommerce). MySpace would liked to have owned YouTube but didn’t have the public stock valuation to purchase them at the price that Google did. Google acquired YouTube for $1.65 billion, which at the time seemed laughably high and now seems prescient.

Social Network 318

Social Network Networking Internet Technical Review 318

YoungUpstarts

FEBRUARY 14, 2017

Your revenues are declining or you don’t have any revenue at all! Revenues don’t appear overnight; even the greatest success stories had to work hard to start getting traction and growth. Yet if revenues start to decline, or after a few months customers are still leaving you for other solutions, then you may have an issue.

Technical Review 157

Technical Review Architecture Revenue Channel 157

betashop.com

OCTOBER 8, 2012

It has been awesome, flattering, and humbling to see that post went viral and has been seen by so many thousands of people — mainly aspiring entrepreneurs — and has been translated into many languages. Never, ever, choose your investors based on valuation. 10M post-money valuation = $100M target.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Both Sides of the Table

JULY 16, 2013

It goes like this, “If your next round investor can see how fast you’re scaling then you can raise money based on your user traction and your valuation can hit the sky. The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Hearpreneur

JANUARY 22, 2023

In recent years, eCommerce companies have begun to increase revenue by selling products directly via social media networks. When you connect your story to a viral event and piggyback on its coverage you can get attention. Every year, social media coverage expands. Social listening is becoming more important to derive sentiments.

Artificial Inteligence 127

Artificial Inteligence Technical Review Entrepreneur Social Media 127

Startup Professionals Musings

JUNE 26, 2016

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $400B. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Revenue 145

Revenue Valuation Startup Viral 145

Steve Blank

MARCH 18, 2011

The signals are loud and clear : seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble. VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter.

Internet 335

Internet IPO Silicon Valley Agile 335

thebarefootvc

DECEMBER 16, 2011

The viral nature of social media no doubt aided this growth, as did improvements in the online shopping experience. Discovery, in contrast to search, took center stage as Pinterest displayed hockey stick growth (and raised VC money near a $200M valuation in late 2011).

Technical Review 110

Technical Review India Mobile Hockey Stick 110

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. Asymmetric. Location Aware. Referral Traffic.

Iran 358

Iran API San Francisco Nigeria 358

Startup Professionals Musings

OCTOBER 1, 2012

Even a non-profit has to generate revenue (or donations) to offset operating costs. Intellectual property is also often the largest element of early-stage company valuations for professional investors. Don’t quit your day job until new revenue is flowing. Even viral marketing costs real money and time. Inexperienced team.

Intellectual Property 274

Intellectual Property Entrepreneur Viral Early Stage 274

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Startup Professionals Musings

NOVEMBER 11, 2013

Even a non-profit has to generate revenue (or donations) to offset operating costs. Intellectual property is also often the largest element of early-stage company valuations for professional investors. Don’t quit your day job until new revenue is flowing. Even viral marketing costs real money and time. Inexperienced team.

Intellectual Property 251

Intellectual Property Startup Viral Early Stage 251

Up and Running

JANUARY 14, 2022

Our major challenge was how do we compete with companies that have billion-dollar valuations, millions in investor funding, and millions in revenue? For example, an eCommerce brand selling clothes would immediately know that a keyword like ‘buy men’s blue jeans’ was relevant and could bring direct revenue.

SEO 104

SEO Software Review Search Acquisition 104

Gust

NOVEMBER 3, 2013

Even a non-profit has to generate revenue (or donations) to offset operating costs. Intellectual property is also often the largest element of early-stage company valuations for professional investors. Don’t quit your day job until new revenue is flowing. Even viral marketing costs real money and time. Inexperienced team.

Intellectual Property 183

Intellectual Property Startup Viral Early Stage 183

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. The game has started getting some traction already, and has a good virality index.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Duct Tape Marketing

DECEMBER 14, 2017

We saw the issue of how do we get people to know that our free tool exist, and it has grown organically very well, it has a viral effect at this point, but the other thing we really did a year ago was double down on our content marketing, so one of the biggest challenges we have is our customers are software developers.

Kansas City 62

Kansas City CTO Hire Las Vegas Software Development 62

Rob Go

MAY 26, 2016

I’ve been thinking a little about non-recurring revenue businesses. I’m coming to the belief that these are under-appreciated categories of investment, especially since the gospel of recurring revenue, subscription commerce, and SaaS has been preached in recent years. That is not good. Some categories just are this way.

Revenue 53

Revenue NPV Valuation Forecast 53

Hunter Walker

FEBRUARY 15, 2023

Claire got to experience, and played a large part in, Stripe’s proverbial rocketship, blossoming into thousands of employees, generating billions of dollars in revenue and valuation. For example: On her viral ‘ Working With Claire ’ guide I think that founders should write a guide to working with them.

Cap Table 106

Cap Table Hiring Viral Valuation 106

Lightspeed Venture Partners

NOVEMBER 12, 2012

Season 4 week 9 of Sharktank was another fun episode, showing the importance of failing fast, being prepared for your pitch and how selecting an investor is about more than just optimizing valuation. When asked why the company is worth a $1M post money valuation, he said, “What it comes down to is passion.” Drive Suits.

Valuation 107

Valuation Post-Money Valuation Viral Algorithm 107

View from Seed

JUNE 30, 2015

Over a third of our investments happen pre-product (so by definition, before PMF), and two-thirds are pre-revenue. For a marketplace or ecommerce business, you need to be doing well north of $5M in annual revenue or GMV to get an A round done. FWIW, at NextView, we invest from inception to strong PMF. We’re not at normal yet.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Start Up Blog

MAY 26, 2022

Imagine if an industry spent $4 to generate $1 in revenue. It really is astonishing: Forecast VOD streaming content spend = $US230 billion Forecast VOD streaming revenue = $US83.4 Tech companies have been getting a free pass for a long time on their valuations. Don’t forget – this is before profit. It’s brilliant.

Forecast 62

Forecast Viral Stock Curation 62

Startup Lessons Learned

SEPTEMBER 22, 2008

is an elegant way to model any service-oriented business: Acquisition Activation Retention Referral Revenue We used a very similar scheme at IMVU, although we werent lucky enough to have started with this framework, and so had to derive a lot of it ourselves via trial and error. But its not really viral growth, even when its exponential.

San Francisco 167

San Francisco CPA SEM CTO Hire 167

reidhoffman.org

NOVEMBER 12, 2013

Friendster’s valuation set the tone for the entire social networking space. we had no revenue. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue. We are the leader in the professional domain with viral growth. Investors see a lot of pitches. Why is it valuable?

Entrepreneur 111

Entrepreneur Viral Revenue Networking 111

Agile VC

MAY 26, 2011

LinkedIn’s product had only been live for a couple months, we only had tens of thousands of registered users, and wouldn’t start generating revenue for more than a year after this point. round which closed in November 2003, and the pre-money valuation between $10 million and $15 million. It was a $4.7M link] leehower.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

www.forentrepreneurs.com

FEBRUARY 2, 2010

As I ask questions to understand the thinking, what usually comes out is something vague along the lines of web marketing, and/or viral growth with no numbers attached. A quick look around all the B2C startups shows that, although viral growth is often hoped for, in reality it is extremely rare.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

Cracking the Code

FEBRUARY 23, 2011

It would have been easy to explain the difference by changes in the 2010/2011 revenue growth projections but unfortunately that is not the case. revenues while large caps are trading at 6.4x. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Popular Media: the key to viral marketing.

Software Review 101

Software Review Technical Review Valuation Europe 101

Cracking the Code

JANUARY 22, 2009

While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. 1 of MRR generates $12 of annual revenue, so $1 commission equals 1/12=8.3% of Year One Revenue Sounds high, but is that considered a reasonable package?

Software Review 91

Software Review Clawback Sales Salary 91

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Revenue per customer? Revenue, Gross Margin?

Cofounder 433

Cofounder Seed Stage Valuation Metrics 433

Cracking the Code

MARCH 12, 2010

Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Given that the revenues are not growing very fast, this means that most of the companies have reduced their sales force and focused on productivity improvement. SaaS 13 Index Valuation.

Software Review 63

Software Review Technical Review Cloud Europe 63

Cracking the Code

MAY 25, 2010

A few highlights from the different keynotes and speakers On top of Jason, we also had the chance of having many great speakers at the event and here are a few quotes and notes that I have taken during the different keynotes and panels: Joe Payne, CEO of Eloqua moderated the panel on Revenue Performance Management. SaaS 13 Index Valuation.

Software Review 74

Software Review Cloud IPO Jordan 74

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. SaaS 13 Index Valuation. anecdotes. (13).

Software Review 48

Software Review Technical Review Valuation Portfolio 48

Cracking the Code

OCTOBER 9, 2009

This strong recovery has highlighted the resiliency of the recurring revenue model in a downturn as well as the stength of the shift to soaftware-as-a-service and cloud computing. In other words, how much of the decline in revenue growth is due to signing up fewer customer vs lower revenues from each new customer. anecdotes. (13).

Software Review 48

Software Review Technical Review Cloud Europe 48

Cracking the Code

DECEMBER 1, 2009

Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Popular Media: the key to viral marketing. The recession created opportunities! S&M productivity (CAC ratio) for the SaaS 13 Index. Note: high CAC ratio means high productiviy (see blog post for definition). My Investments. CornerstoneOnDemand.

Software Review 48

Software Review Technical Review Cloud Europe 48

Startup Professionals Musings

JANUARY 7, 2023

Perhaps the most famous bubble for startups was the dot.com craze that crashed 20 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. More than one smart entrepreneur has been caught in the lofty lifestyle of big money investors, viral growth, and movie star status.

Intellectual Property 314

Intellectual Property Entrepreneur Bankruptcy Viral 314

abovethecrowd.com

JUNE 2, 2021

Paypal famously offered customers $5 to invite a friend, who would then also get $5 as part of a highly successful viral marketing campaign (they actually started at $20, and then reduced it to $10 and then ended at $5). They can’t sell the stock at this multiple and therefore that valuation is not available to them.

IPO 82

IPO Customer Matching Silicon Valley 82

Startup Professionals Musings

APRIL 12, 2020

Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. More than one smart entrepreneur has been caught in the lofty lifestyle of big money investors, viral growth, and movie star status.

Intellectual Property 310

Intellectual Property Startup Bankruptcy Viral 310

Cracking the Code

NOVEMBER 10, 2009

It is intriguing to see the M&A dynamics in the space, highlighting the interest of tech companies for recurring revenue streams - even SAP announced in their analyst call earlier this month that they were moving from perpertual licenses to five year term licences. Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 48

Software Review Technical Review IPO Cloud 48