Finance lessons

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Budgeting & forecasting

Market sizing

Three years ago, Fred Wilson wrote a great blog post called When Talking About Business Models, Remember that Profits Equal Revenues Minus Costs . The point he made was both simple and profound. The simple part is summed up in the post’s title [1] . http://cdixon.org/2012/01/22/revenue-exceptionalism-vs-margin-exceptionalism/

Revenue vs margin

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. http://www.avc.com/a_vc/2011/09/determining-valuation-multiples.html
Date / / Category / Startups

Misadventures in VC Funding: The $24 Million Moz Almost Raised

http://moz.com/rand/misadventures-venture-capital-funding/

A great inside view on the dark side of the VC funding process. by PED Aug 29

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

http://gigaom.com/2009/08/02/3-quick-and-dirty-business-hacks/
http://abovethecrowd.com/2011/05/24/all-revenue-is-not-created-equal-the-keys-to-the-10x-revenue-club/

All Revenue is Not Created Equal: The Keys to the 10X Revenue Club

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.” – Paul Rodgers, Shooting Star

WACC Cost of Capital | Go Beyond the Definition - WikiWealth

Click here to edit contents of this page. http://www.wikiwealth.com/wacc
http://continuations.com/post/29090587/welcome-to-monte-carlo-excel Welcome to Monte Carlo, Excel

Welcome to Monte Carlo, Excel - Continuations

Valuation Witchcraft – Where Do Seed Valuations Come From?

Valuation Witchcraft - Where Do Seed Valuations Come From? - robgo.org

http://robgo.org/2010/09/29/valuation-witchcraft-where-do-seed-valuations-come-from/

Financial Models for Entrepreneurs, continued | Taylor Davidson (@tdavidson)

An update on the two Excel financial model templates for entrepreneurs I built and released to the web. http://taylordavidson.com/financial-models-for-entrepreneurs-continued/

The Option Pool Shuffle

http://venturehacks.com/articles/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.
Series AA Equity Financing Documents

Series AA Equity Financing Documents

Startup Killer: the Cost of Customer Acquisition | For Entrepren

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.

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.