How to Calculate Revenue Projections & Direct Costs Part 1: Physical Products

Working on your customer base potential is the first step to building reliable financial projections for startups. To start, we can analyse one of the most common types of revenue stream for businesses: the sale of physical products. How to calculate products sold correctly, prices, volumes, customer preferences, inventory and other direct costs. After analysing, Read more about How to Calculate Revenue Projections & Direct Costs Part 1: Physical Products[…]

venture capital investments

How much should Venture Capital contribute to a company’s success?

Venture capital is very important for entrepreneurship and to enable the development in uncertain technologies and business models that take a long time to become profitable. Other funding sources could not take up the risk that VC Funds take, and therefore our businesses and technologies would look very different today if we didn’t have venture Read more about How much should Venture Capital contribute to a company’s success?[…]

startup ecosystem

Can the local business culture determine where the next startup hub will be?

As many world economies develop and join the ranks of developed countries, and as many third-world countries develop fast and start bringing unique innovations to world markets, it’s fair to wonder if their startup hubs can ever reach the level of Silicon Valley. Maybe that would be a stretch, but there are new startup ecosystems Read more about Can the local business culture determine where the next startup hub will be?[…]

The Basics of Startup Valuation

When we value a company, we value its equity (the Market Value of Equity) to determine the price paid for a transaction (acquisition, financing or other) where the investor receives ownership, which is an equity stake. The valuation can take place also for information purposes for debt financing, but it is mostly relevant for equity Read more about The Basics of Startup Valuation[…]

“Innovation and Entrepreneurship”: useful 1985 strategy insights for today’s startup world

Reading Peter F. Drucker’s 1985 book, ‘Innovation and Entrepreneurship’, it became clear that, despite a few trends that are no longer relevant today, many concepts are still very much relevant for startup entrepreneurship today. Peter Drucker has been described as “the founder of modern management”. According to Drucker, entrepreneurs should take advantage of a “window” Read more about “Innovation and Entrepreneurship”: useful 1985 strategy insights for today’s startup world[…]

DIFFERENCES BETWEEN STARTUP VALUATION & STANDARD VALUATION PRACTICES

Business valuation dramatically reduces investment uncertainty. It is still a science under development as markets change and more information becomes available. Since valuations are forward-looking, the practice still involves a high degree of judgement. Startup valuation is based on leading practices rather than set standards. Most early-stage valuation decisions take place during negotiations, nevertheless they Read more about DIFFERENCES BETWEEN STARTUP VALUATION & STANDARD VALUATION PRACTICES[…]

Raising Funds for your Stage: How Startup Fundraising is Different

It’s now easier than ever been to found a business. The cost of starting a simple online venture is low. This has opened up the possibility for many to become entrepreneurs, and the availability of capital also enables many new ground-breaking ideas to raise the needed funds at the early stages. However, the cost to Read more about Raising Funds for your Stage: How Startup Fundraising is Different[…]

BUSINESS VALUATION: WHAT ARE MY OPTIONS?

When deciding what type of company valuation you need, there are few options available. It usually depends on your specific situation, company size, information available (specifically when the valuation is ordered by an investor) and type of transactions, as well as the expected audience and negotiations. The purpose or transactions for which you may want a Read more about BUSINESS VALUATION: WHAT ARE MY OPTIONS?[…]

HOW TO CALCULATE REVENUE & COSTS PROJECTIONS

Working on your customer base potential is the first step to building reliable financial projections for startups. The revenue model that you choose (which types of customers will be charged, how much, and how) defines how you set up your entire business. Many startups decide to focus on a fast-growth with technology development and/or customer Read more about HOW TO CALCULATE REVENUE & COSTS PROJECTIONS[…]

How to calculate the cost of your market expansion: Customer Acquisition Costs

  Once you have set a target number of customers to reach, how do you reach these customers? Now that you have projected your customer base, you can calculate your marketing and sales costs and split these costs into the different channels that you are using. By doing so, you can validate every channel and Read more about How to calculate the cost of your market expansion: Customer Acquisition Costs[…]

THE STRATEGY BASIS OF THE FINANCIAL PLAN

  After the market analysis, validation and drawing your business model, including your potential long-term strategy, it is time to put everything to test by creating financial projections. While the future is uncertain and trends change, we have a variety of data from the past to help us. The reality is that financial projections will Read more about THE STRATEGY BASIS OF THE FINANCIAL PLAN[…]

What kind of soil you need to grow your roots: Sizing the Market

Trees grow in size by first expanding their roots in the soil. Every specie of tree is different and it may need a different structure and acidity of the soil. Some need larger and deeper spaces to grow their roots to develop to their full potential, some need less. Different species grow at different speeds, Read more about What kind of soil you need to grow your roots: Sizing the Market[…]

YOUR VALUATION IS NOT FIXED IN STONE

As a valuation professional, explaining what value is and how you get to it, is sometimes a challenge. There are so many transactions in the market, especially at the early stages, that concepts have to be simplified to be able to negotiate quickly and effectively. The valuation then becomes a value that you agree on Read more about YOUR VALUATION IS NOT FIXED IN STONE[…]

Strategy planning for early-stage startups: How to reduce risks

Your ideal financing strategy is closely connected to your milestones. This is an example of milestones for a startup, this does not represent how funding rounds take place in all situations. Funding depends on a variety of factors. It‘s also possible to have multiple smaller seed rounds, as it‘s happening now in the market, and Read more about Strategy planning for early-stage startups: How to reduce risks[…]

Where are early-stage investments going?

Smart money from startup investors follows ever changing trends in terms of sector, region, stage, and instrument. Startup investors, including business angels, VCs, family offices and corporate VCs can invest directly into startup investment rounds, or join co-investment funds, syndicates or invest in other funds. Funds are increasingly set up as specialised sector funds. They Read more about Where are early-stage investments going?[…]

startup story

Is startup funding right for you?

Funding cycles and the startup story go hand in hand. Planning out the financing strategy is something that many founders overlook. When raising funds, possibilities are limited to the type of company that you have: so it’s very important to know what is available to you before you decide on a strategy, especially if the Read more about Is startup funding right for you?[…]