Two Ways to Get to a $100 Million Valuation
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Two Ways to Get to a $100 Million Valuation
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Re: Two Ways to Get to a $100 Million Valuation
#2To get an idea of how likely it is, how many startups are reaching a $100+ million valuation in a given year?
Re: Two Ways to Get to a $100 Million Valuation
#3To get an idea of how likely it is, how many startups are reaching a $100+ million valuation in a given year?
The rule of thumb among VCs is about 15 per year. Assuming $100+ million is considered a "big success". The cap for big success might be higher.
See more here: http://www.paulgraham.com/invtrend.html
Actually, this article here has some good quantitative data. It puts the number around 200. It looks like most of the companies are non-tech/outside the Valley though.
http://bostinno.streetwise.co/2013/05/14/only-200-startups-p...
Re: Two Ways to Get to a $100 Million Valuation
#4To get an idea of how likely it is, how many startups are reaching a $100+ million valuation in a given year?
Here's some good recent data on how many exits and for how much in the past few years: http://tomtunguz.com/the-3-different-strategies-of-venture-f...
Re: Two Ways to Get to a $100 Million Valuation
#5what about businesses without users?
Re: Two Ways to Get to a $100 Million Valuation
#6what about businesses without users?
What do you mean by "users"? A business has to have customers, at least in the long run. Those customers may or may not be the people who actually use the products (Google/Facebook/Yahoo/etc - you're not the customer, you're the product). But whether you're making tires or milk or websites or religious experiences or whatever, you have a product, and someone is using it.
Re: Two Ways to Get to a $100 Million Valuation
#7"Do the exact opposite. Don’t spend money acquiring users, instead build your product to go viral, and then monetize through selling access to users (and their data) to advertisers."
This idea that viral=free is pretty dangerous. "Viral" can be a very expensive way to acquire customers. Who develops these viral features? free developers? Who tests them, deploys them, scales systems to handle viral growth? Viral is only free if you aren't paying your development, testing, and ops staff.
Re: Two Ways to Get to a $100 Million Valuation
#8"Do the exact opposite. Don’t spend money acquiring users, instead build your product to go viral, and then monetize through selling access to users (and their data) to advertisers." This idea that viral=free is pretty dangerous. "Viral" can be a very expensive way to acquire customers. Who develops these viral features? free developers? Who tests them, deploys them, scales systems to handle viral growth? Viral is on…
You're going to pay for those anyway if you are growing. The point is that those are fixed costs and not costs per costumer.
Re: Two Ways to Get to a $100 Million Valuation
#9Warning! The entire article is filled with arcane finance newspeak and obscure acronyms!
tl;dr:
1. Have a high LTV:CAC ratio (what???)
2. Have high viral co-efficient. (okay.)
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LTV = Loan to value, a ratio of the outstanding debt on a property to the market value of that property. (or is it "Lifetime value" of a customer?)
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CAC = Customer acquisition cost is the resource a business needs to allocate in order to acquire an additional customer.
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And, oh yeah, just "be viral".
Re: Two Ways to Get to a $100 Million Valuation
#10To get an idea of how likely it is, how many startups are reaching a $100+ million valuation in a given year?
The rule of thumb among VCs is about 15 per year. Assuming $100+ million is considered a "big success". The cap for big success might be higher. See more here: http://www.paulgraham.com/invtrend.html Actually, this article here has some good quantitative data. It puts the number around 200. It looks like most of the companies are non-tech/outside the Valley though. http://bostinno.streetwise.co/2013/05/14/only-200-st…
I believe the rule of thumb is that there are 15 that reach $100M revenue. We could square the figure of 200 at $100M valuation with this rule of thumb if we assume valuation is say 10X revenue, so 200 reach ~$10M revenue. Thus maybe 1/15 or so of the companies that reach $10M in revenue hit the next level of scale and get to $100M revenue.