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Burn Rates: How Much? - Vimperator

Burn Rates: How Much? - Vimperator
In the comments to last week's Burn Rate post, I was asked to share some burn rates from our portfolio. I can't do that. But an alternative suggestion was to write a post suggesting some reasonable burn rates at different stages. The following applies to software based businesses, and most particularly web and mobile software businesses. Building Product Stage – I would strongly recommend keeping the monthly burn below $50k per month at this stage. Building Usage Stage – I would recommend keeping the monthly burn below $100k per month at this stage. Building The Business Stage – This is when you've determined that your product market fit has been obtained and you now want to build a business around the product or service. A good rule of thumb is multiply the number of people on the team by $10k to get the monthly burn. Once you get the business profitable, you can scale the team larger and larger to meet the needs of the business. One final caveat – there are outliers. Related:  What you need to know in Finance / raising moneyFundingEntrepreneurship

主要スタートアップのビジネスモデル類型化と、100万人突破のタイミングを分析する in the looop 斉藤徹 - Vimperator 先週、この in the looop にて「ソーシャルメディアやスタートアップを中心に、海外の2012年予測記事をピックアップ」という記事を投稿した。一昔前のソーシャル系Webサービス全盛の時代から、スマートフォンにターゲットを絞ったアプリの時代へ。海外の主要ブログメディアが予測する新しいスタートアップなどの新潮流をまとめたものだ。 まずは主要なスタートアップのビジネスモデルを類型化してみたい。 1. メディアモデルのサービスでは、ユーザーが熱中し、友人にすすめたくなるサービスを無料で提供する。 2. ソリューションモデルのサービスでは、いかに画期的で、時間やお金を節約できるソリューションを提供できるかが重要だ。 3. マーケットプレースモデル、つまり売り手と買い手をマッチングさせるタイプのサービスでは収益源は取引に対する手数料だ。 映画「ソーシャルネットワーク」は、Facebookのローンチから100万人到達までをストーリー化したものだ。 どのビジネスモデルにおいても、最初のハードルは100万人。 では、主要なスタートアップ企業はどのくらいの期間で100万人にリーチしているのか。 この図のうち、DLとしているOink、Path、LINE、Instagramはスマートフォン用のアプリのためユーザー数ではなくダウンロード数を対象としている。 1. 第一世代では、ソーシャルメディアのインフラとなるようなサービスが数多く勃興した。 2. 第二世代では、第一世代のソーシャル・インフラを活用したさまざまなWebサービスが登場した時代だ。 3. 第一、第二世代がPCベースのWebサービスをコアとしているのに対して、第三世代はスマートフォンベースのアプリをメインとしている点が大きく異なっている。 なお、すでに大ブランドとなっている企業によるソーシャル系サービスは、既存ユーザーやブランドがあるためにスタートアップよりさらに短期間でユーザー獲得を実現することがある。 最後にKevin Rose氏による「いかにゼロから100万人のユーザーを獲得するか」という講演ビデオ(2009/10)を紹介しておこう。 Taking your Site from One to One Million Users by Kevin Rose from Carsonified on Vimeo. ■関連記事

Projections, Budgeting and Forecasting MBA Mondays is starting a new topic this week. It's a big one and I think we'll end up doing at least four and maybe even five posts on this topic in the coming weeks. I said the following in one of my first MBA Mondays posts: companies are worth the "present value" of "future cash flows" The point being that the past doesn't matter too much when it comes to valuing companies. There is another big reason why projections matter. And finally, projections matter because they tell you what your financing needs are. There are three important kinds of projections. 1) Projections – These are a set of numbers, both financial and operational, that you make about your business for various purposes, including raising capital. 2) Budgets – These are a set of numbers, both financial and operational, that the management team prepares each year, usually in the fall, that outline what the company plans to achieve in the coming year. I've been working with Return Path for ten years now.

On startups burn rates • Board Observers Bill Gurley gave an interview a few weeks ago in the WSJ where he sounded alarm on the very high cash burn rates of big startups these days. It triggered an immense debate as he was immediately echoed by Fred Wilson, this “Winter is coming” post from Techcrunch post along with deeper commentary from Mark Suster or Danielle Morill. The trade-offs between profitability and growth is one of the most fundamental and (generally) misunderstood business topic in the startup ecosystem. Here I’ll explain why there is no “right” amount of burn for a company, and I’ll try to give you some frameworks you can use for thinking about this problem. Frameworks The first item is to remember that you should take all advice as directionally good guidance, but every business is different. What are the frameworks you can use to determine the optimal burn rate for your company? The milestone play The “milestone play” consists in getting your company to a point at which you can raise money at a higher valuation.

Behind the Scenes: How Fab Raised $40 million with a lot of data and not much pain Let’s face it, fundraising can be a real pain in the ass for the entrepreneur. It takes up a ton of time that can be otherwise spent managing the business. Sure, it’s a necessary evil, but it’s also typically a big distraction. It’s also a lot like dating. You have to go on a lot of first dates before you can move on the to the second, third, fourth, and then hopefully marriage. The worst thing you can do is slut around. When we decided to raise a large round of financing for Fab in October, my biggest concern was that it would divert our management team’s time and attention away from running the business at a critical time, as we were simultaneously scrambling to prepare for our first holiday season at Fab. As our “one thing” at Fab.com is design, I put a lot of thought and consideration into how we might design our fundraising process differently from the norm, so as to optimize around time spent fundraising vs. running the business, and to quickly hone in on who we wanted to marry.

Return and Ridicule I am going down to Princeton today to talk to Ed Zschau's class on entrepreneurship today. Ed asked me what I wanted to talk about. I told him "return and ridicule". I have found that return and ridicule are highly correlated over the years. We have made more money on things that were highly ridiculed than on any other cohort. I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. The same logic applies to starting companies. This notion also plays into Clayton Christensen's framework for disruptive innovation. Chris Dixon has a great post about hobbyists. So many folks in the venture capital business are sheep that just want to follow the herd. Better to invest in laughing stocks.

The Apache Cassandra Project - Vimperator Scenarios In last week's MBA Mondays, I introduced the topic that we'll be focused on for the next month or so; projections, budgeting, and forecasting. In that post, I described projecting as a "what if" exercise that is done at a higher level of abstraction than the budgeting and forecasting exercises. I said this about projections: These are a set of numbers, both financial and operational, that you make about your business for various purposes, including raising capital. Since projections are not budgets and are much more "big picture" exercises, it is important to use a scenario driven approach to them. If you build your projections with a detailed set of assumptions and if you can assign probabilities to each assumption, you could easily do a monte carlo simulation in which literally thousands, or tens of thousands, of scenarios are run and the outcomes are charted on a bell curve. A few weeks ago on MBA Mondays we talked about key business metrics. Let's get specific here.

Pricing A Follow-On Venture Investment Today on MBA Mondays, I am going to walk you through some math that our team does when looking at a venture investment in a company that is starting to scale its business. Let's assume we have a portfolio company. I will call it fit.sy. So now the VC firm (us) needs to figure out what is a fair price. - fit.sy is on track to generate $10mm in gross transactions in 2011 - they operate on an all-in "take rate" of 9% so their net revenue in 2011 will be $900k - they will have operating costs in 2011 of $1.5mm and they will lose $600k this year - they plan to triple gross transactions in 2012 to $30mm and grow to $150mm in gross transactions by 2014 - they plan to do this while ramping operating costs to $3mm in 2012 and to $7mm in 2014 We lay all of those number out in a spreadsheet and then look for some multiples to apply to them to get to a sense of value. I've observed these multiples over a long time, going back to eBay and Mercado Libre a decade or more ago.

» Guide pour présenter votre Business Plan de Startup  (Ce post sera mis à jour en fonction des retours de mes lecteurs, n’hésitez pas à en laisser en commentaire) Depuis le lancement de Kima Ventures avec Xavier Niel en février 2010, nous avons reçu via notre site plusieurs milliers de business plans en provenance du monde entier. La grande majorité des business plans sont reçus via notre site internet, lui-même relié à notre base de données de startups. Nous avons investi dans plus de 130 startups (une partie apparait sur notre site) dans 18 pays, de la Chine au Nicaragua en passant par le Pakistan, Israël, la Norvége ou la Suisse. Lire des business plans peut être une activité agréable mais, pour que cela soit vrai, il faut que celui-ci réponde clairement aux questions que se pose un investisseur sans développer de détails inutiles. Pas la peine donc de présenter l’évolution de la taille du marché du e-commerce au cours des 10 dernières années quand vous présentez un dossier de vente de pin’s sur Internet Parlons donc contenu désormais.

Related:  Board Observers Weekly, September 30 2014