How to grow your app revenue with DuPont analysis (Guest post) About the author: Kenton wrote this fantastic piece about analyzing in-app revenue, drawing from his work experience at both Zynga, where he runs their mobile poker product, and before that, Google. You can follow him at @kivestu and his blog here. -Andrew
Budgeting & forecasting
ï»¿ Summary: Eric Sink provides a geek-oriented overview of accounting and company funding. On my weblog I write a series of articles entitled Marketing for Geeks. The concept of these articles is that a lot of technically-oriented people actually do end up involved in marketing decisions. Most software startups are founded by one or more geeks, often without the presence of experienced people in other areas like marketing. For these people, a little marketing knowledge can go a long way. Finance for Geeks
Determining Valuation Multiples Last week on MBA Mondays, I talked about valuing an internet marketplace business. In that post, I talked about using 1x gross marketplace transactions and 20x EBITDA as multiples to determine value. In the comments, I was asked about multiples for other sectors. That's a good question so I figured I'd show how to calculate multiples for various sectors. For this exercise we will focus on the software as a services (SAAS) sector.
Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. It was accept the terms or go into bankruptcy so we took the money.
This Week in Venture Capital #15 with Kelly Hwang, Associate at GRP
My mother was a high school mathematics teacher and understood that kids learn best when learning is fun, so at a very young age she started teaching me math “tricks.” In the second grade she showed me how 9 times any number less than 10 was simply that number minus 1 concatenated with the sum of difference plus whatever it takes to get back to 9. For example, 9 x 8 is 8 minus 1 (7) concatenated with 9 minus 7 (2) — 72. 3 Quick and Dirty Business Hacks
Principles of Corporate Finance: Amazon.fr: Richard A. Brealey, Stewart C. Myers, Franklin Allen: Livres anglais et étrangers
May 24, 2011: May 24, 2011: [Follow Me on Twitter] “ Don’t you know that you are a shooting star,And all the world will love you just as long,As long as you are
WACC Cost of Capital | Go Beyond the Definition - WikiWealth Click here to edit contents of this page. Click here to toggle editing of individual sections of the page (if possible). Watch headings for an "edit" link when available. Append content without editing the whole page source.
Welcome to Monte Carlo, Excel Following up to yesterday’s post about randomness, Excel provides a very easy tool for modeling probability. Just insert =RAND() into a cell. This will generate a new (pseudo) random number between 0 and 1 each time the spreadsheet is recalculated. For most business modeling one wants to have a discrete distribution of values with a subjective probability distribution. Welcome to Monte Carlo, Excel - Continuations
Valuation Witchcraft – Where Do Seed Valuations Come From? September 29, 2010 Given all the talk recently about rising seed valuations and AngelGate, I wanted to do a sequel to my old post on how VC’s Value Early Stage Companies. The valuation dynamics are even more puzzling at the seed stage, where there is even less to value. Rather than provide a very structured formula for seed stage pricing, I just want to offer some principles of seed stage pricing to help entrepreneurs navigate this process better. Valuation Witchcraft - Where Do Seed Valuations Come From? - robgo.org
Pascal Quiry - Analyse Financière
The Option Pool Shuffle “Follow the money card!” – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you.
Thoughts: Term Sheet While some people hate the phrase “failing fast”, I find it instructive when it’s used to signify that one isn’t going to pursue a particular path in the context of a larger set of activities. A few weeks ago, I wrote a post about The Proliferation of Standardized Seed Financing Documents. It generated several hundred email responses and a handful of phone calls. A week or so later, my partner Jason Mendelson wrote a post titled Why There Will Never be a Standard Set of Seed Documents. I’ve concluded that Jason is right so rather than torture myself, I’m failing fast with regard to trying to help create a set of standardized seed documents.
Return Free Risk - A Merger Arb Anecdote
Guillaume Martin: Eureka, le pacte d'actionn
Congratulations. If you can close a round now then it makes perfect sense to do so. You are providing a GREAT service to paying and non-paying customers. I was always told if you are offered water in a desert, take a drink, even if you are not thirsty. Congrats! Holy Crap! HubSpot Has Now Raised A Total Of $33 Million
Series AA Equity Financing Documents For years now, Y Combinator has open-sourced a set of Series AA Equity Financing Documents. These documents were originally created for YC-funded startups to use when raising equity rounds with angels, with the goal of these financings easier and more streamlined for both sides.
In the many thousands of articles advising entrepreneurs on what they have to focus on to build successful startups, much has been written about three key factors: team, product and market, with particular focus on the importance of product/market fit. Failure to get product/market fit right is very likely the number 1 cause of startup failure. However in all these articles, I have not seen any discussion about what I believe is the second biggest cause of startup failure: the cost of acquiring customers turns out to be higher than expected, and exceeds the ability to monetize those customers. In case you are not familiar with the importance of Product/Market fit, Marc Andreessen has a great blog post on this topic: The Pmarca Guide to Startups, part 4: The only thing that matters. In this blog, Marc argues that out of the three core elements of a startup, team, product, and market, the only thing that matters is product/market fit.
Valuation and Option Pool One of the more contentious things in the negotiation between an entrepreneur and a VC over a financing, particularly an early stage financing, is the inclusion of an option pool in the pre-money valuation. As my friend Mark Pincus likes to say, "it's just another way to lower the price". I'll accept that critique. And take it one step further. The option pool is absolutely a piece of the price negotiation. But it is a very important one as I'll explain.
Don't Let the Funky Math of Convertibles Bite You - Continuation
Options on early stage companies cdixon.org – chris dixon's blog
Beware the Hockey Stick in Your Budget
Guillaume Martin: Ce que tout entrepreneur d
[0904.0016] Stochastic Models of User-Contributory Web Sites
Burn Rate as the Canonical Mistake (for Web Startups) - Continua
When it Makes Sense to INCREASE the Burn Rate « VCMike's Blog
Analyzing Financial Statements
CHART OF THE DAY: How Google Invests Its Cash
Off Balance Sheet Liabilities