Building a Series A SaaS valuation estimator (2017 edition)

I have financed nearly 50 early-stage companies and the question of proper valuation comes up in every financing. There is the obvious tension: Generally speaking, the existing shareholders would like the highest valuation possible, while the new investors would prefer the lowest valuation. For founders, understanding how VCs will look at valuation is critical for a successful fundraising process.

For an investor, initial valuation is one of two determinants of eventual return. The other is the size of outcome. As an investor, you’re willing to pay a higher valuation if you think the outcome is going to be great (both in terms of size and probability). There are several factors that influence, for the investor, the probability of the company achieving the great outcome: experience of the management team, size of the market, attractiveness of the market, early customer proof points and initial traction.

How much weight the investor gives each of these factors changes over time. The largest swing is where we are in the market cycle. Right now, we remain in the second-longest bull market in equities of all time, so investors are generally feeling more optimistic. So I plan on updating this estimator when there is a major market shift (or when I get more data).

These ranges also vary quite a bit by individual VC. For instance, I personally tend to value the founding team above all else, as long as the market is attractive and I find the product compelling. So I will pay a higher valuation when I have great confidence in the founding team. Other firms may value the market opportunity higher though, for example.

To help SaaS founders get a more accurate sense of valuation for their Series A funding, I’ve set out to create a funding estimator that lays out the major variables that affect valuation amounts. The estimator can result in a fairly wide range, but at the very least serves as a guidepost.

A couple of caveats before we get into it: Numbers for each major section are cumulative. Pick the right number of “points” for management, market, traction, location and add together. Also, these numbers are most suitable for enterprise SaaS companies dealing with larger customers. While the variables are always important, the value attributed to them changes over time. And lastly, the competitive dynamic (number of firms that want to invest in your company) can make a big difference.

With these disclaimers, here are the variables, and how much “value” you can expect will be attributed to it:

Variable

Valuation

Notes

1. Team

 

Relevant prior experience but not as CEO

+$5M

Founder contributed to the success of a prior venture, in a related market.

Repeat successful founder

+$10-20M

Founder built prior business to a reasonable revenue level and/or achieved a good outcome for investors. 

2. Market

Hot space (AI, Big Data, AR/VR, Etc.)

+$5-20M

Really big range. Large new market opportunity is one of the biggest drivers in a VC decision. If it’s not a big market, you probably can’t get it funded. Period.

3. Traction

Do you have a few customers?

+$5M

Once you’ve moved past development stage, you are creating value

Do you have $1M-$2M ARR?

+$10M

$1M ARR is a “magic” threshold for a lot of investors to create the next level of value

Do you have $2M-$5M ARR?

+$25-35M

Over $2M in ARR puts you above most Series A-stage companies.

4. Silicon Valley location

+$5-10M

Just having a Silicon Valley location is not enough, so you need some combination of the prior attributes, but generally Bay Area companies end up raising money at a premium.

 

Here are a few examples:

  • Example 1: Repeat CEO (10-20), interesting but not “hot” space, pre-revenue, Silicon Valley (5-10). Valuation range $15 million-$30 million.
  • Example 2: First-time founders without a ton of prior experience, located outside the Bay Area, a “boring industry,” and a $2-5M ARR (25-35). Valuation range $25 million-$35 million.
  • Example 3: Repeat CEO (10-20), hot space (5-15), based in Silicon Valley (5-10), with a few customers that can be referenced (5). Valuation range $25 million-$50 million.

Of course, this a fairly broad estimator and it won’t be tough to find outliers that break the formula — but, in general, it should lead to generating valuation ranges that could help SaaS founders wrap their heads around what is possible and what they should aim for with their first round of venture capital funding.

Featured Image: Bryce Durbin

via TechCrunch
Building a Series A SaaS valuation estimator (2017 edition)

Officials Investigating Hugh Hefner’s Death Suspect Foreplay

LOS ANGELES—Citing the overwhelming amount of physical evidence present at the scene, Los Angeles Police Department officials announced Thursday that they now suspect foreplay may have been involved in the recent death of Playboy founder Hugh Hefner. “Upon entering Mr. Hefner’s bedroom, there were clear indications that his death was not platonic in nature,” said LAPD detective Marcus Rosetti, adding that the presence of feather ticklers and recently lit scented candles suggested that Hefner was getting worked up at the time of his passing. “However, forensics will still have to test several samples of massage oils found in proximity to Mr. Hefner before we can make any conclusive determination.” Rosetti went on to say that, at present, police believed the perpetrators of Hefner’s death were six or seven individuals working in concert.

via The Onion
Officials Investigating Hugh Hefner’s Death Suspect Foreplay

How to Optimize Your Customer Relationship Management (CRM) System

How to Optimize Your Customer Relationship Management (CRM) System

Your Customer Relationship Management (CRM) system is one of the most vital components of your organization’s operations.

For one thing, it tracks customer information and provides reports on historical performances. Additionally, it provides valuable insights into a business’s departmental interactions. This information allows you to strategically position your business for the future.

It’s comes as no surprise that CRM systems have evolved from being simple sales tools to something more. Where once they were used only for capturing customer and prospect data, nowadays smart businesses use them as vital tools to improve interdepartmental operations.

Here is a list of some of the areas where you can optimize the capabilities and features of your CRM system to boost overall productivity.

 

RELATED ARTICLE: BIG DATA AND ANALYTICS ARE NECESSITIES FOR MODERN BUSINESSES

 

Automation of Data

In today’s fast-paced world, it’s not prudent to stick to the traditional methods of collecting and analyzing data. Excel spreadsheets, Word documents, and paper forms are no longer sufficient to the task. Furthermore, you need to be sure that the data stored in your system is up to date. The two most important places to start with in your CRM definition are:

Sales

Salespeople spend a lot of time logging customer information from their daily business interactions. The right CRM sales automation tools will free up your sales team, giving them time to concentrate on other core aspects of the business. Moreover, the tools will automatically update the data from time to time.

Marketing

For greater efficiency, use marketing forms that sync information automatically to your CRM database. Also, avoid feeding your CRM system any unnecessary data by always mapping the correct fields and following all duplication rules.

 

Stale Records

Over time, some records on your CRM system will become inactive or redundant and hence useless to your marketing campaigns. When they do, label such records as inactive so that your employees can focus on accounts with possibility.

On the other hand, stale records can be great business opportunities right under your nose. That’s because some of these records are of prospects that your sales team reached out to in the past but never closed on. Most likely, the timing wasn’t right, so they were basically forgotten.

To mine these records, run reports of prospects’ records that haven’t been communicated with for a long time. Gain further insights by layering relationship data. The relationship mapping will help you determine whether any of your employees know the customers. It’s likely that you’ll be able to jump-start stale conversations and turn them into business opportunities.

 

 

Stale Fields

Your business’s needs change daily. Therefore, customize your CRM’s features to match the dynamics of your business. Do this by carefully creating new fields on your records without polluting or cluttering your stored data.

You’ll find that it’s easy to edit and delete obsolete custom fields periodically from your CRM system. Doing so will enable it to function optimally. Every six months or so, edit or delete historic fields from your system and keep it up to date.

 

Outdated Third Party Providers

Your business needs third-party service providers to help boost your sales, marketing, and support efforts. However, you should revisit all your third-party CRM tools annually. Delete the ones that are no longer relevant to your expanding business.

Among all of the ever-evolving tech-based business solutions, it’s CRM systems that best allow you to stay ahead of the competition. Optimize yours now for top performance.

The post How to Optimize Your Customer Relationship Management (CRM) System appeared first on Business Opportunities.


via Business Opportunities Weblog
How to Optimize Your Customer Relationship Management (CRM) System

Being a jerk at work doesn’t pay off for long

Bosses who are jerks to their employees may improve their well-being, but only for a little while, new research suggests.

Bullying and belittling employees starts to take its toll on a supervisor’s mental state after about a week, according to the study in the Academy of Management Journal.

“The moral of the story is that although abuse may be helpful and even mentally restorative for supervisors in the short-term, over the long haul it will come back to haunt them,” says coauthor Russell Johnson, associate professor of management at Michigan State University and an expert on workplace psychology.

While numerous studies have documented the negative effects of abusive supervision, some bosses still act like jerks, meaning there must be some sort of benefit or reinforcement for them, Johnson says.

Indeed, the researchers found that supervisors who were abusive felt a sense of recovery because their boorish behavior helped replenish their mental energy and resources. Johnson says it requires mental effort to suppress abusive behavior—which can lead to mental fatigue—but supervisors who act on that impulse “save” the mental energy that would otherwise have been depleted by refraining from abuse.

Johnson and colleagues conducted multiple field experiments on abusive bosses in the United States and China, verifying the results were not culture-specific. They collected daily survey data over a four-week period and studied workers and supervisors in a variety of industries including manufacturing, service, and education.

The benefits of abusive supervision appeared to be short-lived, lasting a week or less. After that, abusive supervisors started to experience decreased trust, support, and productivity from employees—and these are critical resources for the bosses’ recovery and engagement.

How abusive bosses make themselves miserable

According to the study, although workers may not immediately confront their bosses following abusive behavior, over time they react in negative ways, such as engaging in counterproductive and aggressive behaviors and even quitting.

To prevent abusive behavior, the researchers suggest supervisors take well-timed breaks, reduce their workloads, and communicate more with their employees. Communicating with workers may help supervisors by releasing negative emotions through sharing, receiving social support, and gaining relational energy from their coworkers.

Coauthors are from the University of International Business and Economics; Peking University; and Communication University of China.

Source: Michigan State University

The post Being a jerk at work doesn’t pay off for long appeared first on Futurity.

via Futurity.org
Being a jerk at work doesn’t pay off for long

Disney Releases Vintage EPCOT Video From Before the Park Opened in 1982

GIF

I’ve seen a lot of EPCOT concept art in my day. But a new video released by Disney has some behind-the-scenes shots that I’ve never seen before, including scale models of everything from the Horizons attraction (RIP) to the countries of the World Showcase. It’s all pretty cool.

The video, titled “The Dream Called EPCOT,” ran on a loop at the “EPCOT Preview Center” in the Magic Kingdom during the late 1970s. And since I wasn’t born until 1983, so much of the video’s models and concept art are brand new to me.

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The Disney Parks blog posted the 15-minute video in its entirety to YouTube, and it’s pretty fascinating for any EPCOT-nerd to watch all the way through. Not only do you see rare concept art, but you also get a look at some of the preparations necessary for opening rides like World of Motion and Food Rocks at the Land Pavilion.

Take, for instance, this awesome/horrifying shot of an audio-animatronic figure from Food Rocks without its skin. They appear to be wrapping it in some kind of blanket, probably to be moved somewhere else.

GIF

From the Disney Parks blog:

The purpose of the film was to introduce a new kind of Disney theme park to guests, showcasing exciting experiences they could have in the park’s Future World and World Showcase areas. The film offered sneak peaks at attraction models, renderings and animation for The Living Seas, Horizons, World of Motion, CommuniCore and Spaceship Earth, as well as early construction footage. It also offered a first-listen to some of the fun music composed for this new park, including songs like “It’s Fun to Be Free,” “Universe of Energy” and “Listen to the Land.”

As we’ve established before, that music from Listen to the Land is one of my favorites.

It’s a fascinating look at the park before it opened in October of 1982. Especially if you long for the days when Future World had some of the coolest dark rides in all of Disney World.

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Do you spot anything in the video that you’ve never seen before? Or, at least, never seen in its infancy?

[Disney Parks]

via Gizmodo
Disney Releases Vintage EPCOT Video From Before the Park Opened in 1982

10 Working From Home Tips That Are Guaranteed To Make You Extra Productive

Have you ever had one of those days when you wake up promising yourself that you’ll have a successfully productive day…but you end up sitting in front of the television all day instead?

This used to happen to me quite a lot when I first started working from home. I’d lounge around in my pajamas all morning, trying to find the motivation to do something. And, well, I never found it.

Then, one morning, I decided that enough was enough! I needed to change my routine. Otherwise, I’d end up being a lazy, unsuccessful and miserable woman- and that doesn’t sound appealing to anyone.

Here’s my list of 10 working from home tips that can make your day more productive than ever.

Get dressed

As much as I love being in my pajamas, I never ever get anything done in them. It’s just a fact for me now. Pajamas were invented to wear to bed or to watch TV in. So, get out of them now and throw on a nice (and clean) outfit and get to work. You’ll feel much better.

Make a list

This is one of my favorite things to do before I begin a productive day. Setting goals and writing them down makes me feel much more organized and I’m sure it’ll help you, too. Once you’ve completed a task from your list, you’ll get that great satisfaction of crossing the task off of your list and starting your next chore.

Clear distractions

working at home tips

Now, everyone has different distractions. These can be social media, your phone or the television.

You’ll never get anything done if you give in to these distractions all day. After all, they are just that, distractions. So, get rid of them! Hide your phone, throw away the biscuits, turn off the television and focus on the things you need to be concentrating on.

Don’t multitask

Not only does multitasking stress your brain out, it also stops you from giving your 100% concentration on your tasks. It’s much better to focus on one task at a time and complete it successfully rather than rush a bunch of tasks at once.

See Also: 7 Unhealthy Behaviors That Affect Your Mental Health

Eat healthier

This one may sound a bit weird. How will eating healthy make you more productive?

Well, it’s a fact that junk food can make you put on weight and make you mentally slower and less motivated, too. Try snacking on walnuts as they are a powerful weapon against binge eating and depression.

Take regular breaks

You don’t want to burn all your energy out by trying to take on too much at once. Set your alarm at regular intervals throughout the day and allow yourself some time to relax in-between tasks.

Go for a walk

walking exercise

For this one, you’re going to have to actually step outside your house. But, trust me, it’ll be worth it.

Just a 15-minute walk will help clear your mind and you’ll be feeling much more productive when you get back. After all, research shows that regular exercise can make you feel happier, smarter and more energetic. This walk can be included in one of your regular breaks.

Reward yourself

Now, this one I love! I mean, who doesn’t like rewards?

Refer back to your list and promise yourself that after completing 3 tasks, you’ll reward yourself with a little something. It can be a 5-minute Facebook break or one piece of chocolate. Whatever floats your boat.

Write tomorrow’s to-do list tonight

By this point, you’ve hopefully had an extra productive day, but you don’t want this to just be a one-off. So, write a list of all the things you want to achieve tomorrow. This will make your morning easier and you’ll wake up knowing exactly what you need to do. It also crosses one task off your list before the day’s even started.

Get an early night

Did you know that 1 in 5 adults don’t get enough sleep? Don’t let that 1 in 5 be you!

Lack of sleep can affect your alertness, productivity, stress levels and problem-solving skills. So, give yourself a regular bedtime schedule and try your hardest to get enough sleep. You’ll thank yourself in the morning.

See Also: Five Ways of Overcoming the Problem of Getting Sleep

And there we have it, my 10 working from home tips that are guaranteed to make your day more productive. They might not work for everyone, but they certainly worked for me. What’s the harm in giving them a try?

 

The post 10 Working From Home Tips That Are Guaranteed To Make You Extra Productive appeared first on Dumb Little Man.


via Dumb Little Man – Tips for Life
10 Working From Home Tips That Are Guaranteed To Make You Extra Productive

Jeff Gonzales: Concealed Carry For Beginners

Back in the day, there weren’t many resources for questions about concealed carry. Simple trial and error taught me what did and didn’t work. These days, the Internet offers an enormous amount of concealed carry advice; some of it bad, most of it good, all of it fragmented.

The most important feedback I can give a new concealed carrier: think of concealed carry holistically. Think of carrying a firearm as a three-part system, where each part connects to form a comfortable, safe, secure and efficient whole.

Part 1 – It’s All About the Base (No Trouble)

Like layering in inclement weather, a good concealed carry system starts with your base. Your base includes the firearm, holster and belt.

Gun

Carefully consider what firearm you will start carrying. I emphasize “start” because your choice of handgun will evolve as you become a more experienced shooter and gain experience with the ins and outs of everyday carry.

A compact 9mm handgun holding a minimum of 10 rounds of ammunition is a great jumping off point. A small-but-not-tiny 9mm gun loaded with 10+1 rounds of powerful-but-not-overwhelming self-defense ammo enables reasonable concealment, controllable recoil, considerable accuracy and more-than-merely adequate “stopping power.”

Holster

There’s a huge not-to-say bewildering variety of holsters from which to choose, made from a wide range of materials, using a number of attachment systems.

IMHO new concealed carriers should stay away from anything other than a traditional holster worn on the hip (i.e., apex, pocket, shoulder and ankle holsters). While outside-the-waistband holsters are the open carrier’s friend, inside-the-waistband holsters offer optimal concealment.

Find a store that lets you try holsters before you buy. If you can’t — and even if you can — understand that holster selection is an ongoing process. Most gun owners have a shoebox or two full of rejected holsters. While it’s both expensive and time-consuming, it’s always best to leave uncomfortable and/or impractical and holsters behind as soon as possible, and move on.

Belt

A concealed carry belt needs to be rigid enough to support the weight of your gun and holster and hold up your pants. That’s not going to be your everyday dress belt. It’s a belt designed for the job. Gun belts come in several different widths and styles, many with built-in reinforcement. A good gun belt isn’t cheap but it’s well worth the money.

Part 2 – Your Lower Body 

Whether you wear dress pants, khakis, blue jeans or shorts, your pants should support the size, weight and shape of your gun, holster and belt.

If you’re carrying a gun in an inside-the-waistband holster, you may need to buy your pants a size larger than normal, to create enough extra space to fit your firearm. Make sure there are enough belt loops of the appropriate width (in a suitable position) to accommodate and support your gun belt.

Ideally, your front pockets should be horizontal to conceal supporting equipment such as knives and flashlights. The back pockets should be patch pockets without flaps or closure options, for those times when you need to carry additional equipment.

If you can’t or won’t change your wardrobe to “dress” around the gun, you may need to forgo my advice on the ideal starter gun and buy a slimmer, lighter gun in a smaller caliber with a lower capacity (e.g., a 7+1 Ruger LCP II). Or opt for an outside-the-waistband holster.

[Obviously this advice doesn’t apply to women carrying in a dress, skirt, yoga pants, etc. That’s the subject of a separate article.]

Part 3 – Your Upper Body

What you wear on the top half of your body helps conceal your gun and holster. There are two main considerations: visual and practical.

When someone can see an outline of your gun (or a part of your gun) even though it’s covered, that’s called “printing.” It’s not illegal, but it’s not ideal. Unfortunately, it’s not always possible to avoid “printing.” Shirts in a dark or neutral color are better for disguising a firearm’s bulge or sharp corner, as are shirts with stripes or broken patterns.

Whether your upper body’s covered by a single layer or multiple layers, whether your shirt is button down or open front, you need to be able to retrieve your firearm from under your cover garment quickly and efficiently. That takes a careful combination of gun, holster, belt and clothing — and a lot of practice.

Many people decide to carry a concealed firearm without realizing that they have to create a discreet, comfortable and efficient concealed carry system. A goal that requires an interplay of equipment and dress, and a great deal of experimentation. Trial and error. Time and money. Given the stakes, both well spent.

via The Truth About Guns
Jeff Gonzales: Concealed Carry For Beginners

Amazon Canoeist Emma Kelty: It Should Have Been A Defensive Gun Use

Whenever pro-gunners suggest that a victim of rape, murder or torture should have been armed, the anti-gunners accuse them of “blaming the victim.” No, the blame for any violent attack rests squarely on the shoulders of the attacker or attackers. Full stop. But providing we’re talking about healthy adults . . .

the responsibility for self-defense lies with each of us. That’s why millions of Americans carry a firearm. And it’s a damn shame that Amazon Canoeist Emma Kelty wasn’t armed during her trip down the Amazon river.

The British headmistress brutally murdered by Amazonian pirates turned down a safe boat ride through one of the most lawless stretches of water in the world, MailOnline has learned.

Emma Kelty was specifically warned about the danger of the river she was about to paddle through but insisted on sticking to her schedule as she was ‘losing time’.

In her last known conversation, the 43-year-old said she felt she had no choice but to carry on in order to complete her 4,000 odyssey from the Amazon source to the sea.

Tragically, her bravery and determination led her straight into the path of cold blooded killers who shot and stabbed her in her tent.

I get that Ms. Kelty was determined to complete her Amazonian mission despite many dangers — everything from animal attack (including insects) to dehydration. I assume she took precautions against those dangers: insect repellant, water, first aid supplies, maybe even a sat phone. And a quick trawl through YouTube reveals that Ms. Kelty took some precaution against a violent attack . . .

VIDEO

Clearly, Ms. Kelty was aware that she needed to protect herself against a violent attack. So why did she enter the territory of known murderers without the best possible form of personal defense (outside an armed escort): a gun?

Whatever the reason — personal, legal or PR (her trip was all over social media) — Ms. Kelty paid the price. Which she might have done anyway, even if she had been armed. But life is about managing risk, not eliminating it. It should have been a defensive gun use.

via The Truth About Guns
Amazon Canoeist Emma Kelty: It Should Have Been A Defensive Gun Use