Venture Capital Market Size Criteria Rule of Thumb
Venture capitalists typically seek a 5x-10x return on their investment. I have used a Rule of Thumb I have coined the “Factors of 10′s”. It goes like this: If a VC wants a 10x return on a $6 million...
View ArticleVenture Capital Valuation Rule of Thumb
A helpful post on the methodology behind venture capital valuations. This post written by a VC describes the philosophy and business rationale for how venture capitalists arrive at valuations....
View ArticleThe Silicon Valley Insider’s Unspoken Rule of Thumb
Writing here as a Silicon Valley VC, I’m going to spill the beans on how valuation is really determined in practice. Quite simply put: “Valuation is a function of negotiating leverage and target amount...
View ArticleEquity Ownership and Vesting Rule of Thumb
A good rule of thumb regarding equity ownership in your company is to institute a vesting schedule on stock grants. This has numerous benefits the two primary being: Better terms than the vesting...
View ArticleIncorporating a New Venture
When incorporating a new venture, a good rule of thumb is to authorize (or issue) 10 million shares @ 1/10 of cent. 50% of these shares should be issued to the founders (with a vesting schedule). 10%...
View ArticleStartup Burn Rate
A good rule of thumb for an appropriate start-up burn rate is about $100,000 per month. For example, a web-based startup should be able to operate for one year if they raise a $1 million dollar angel...
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