One of the most common questions we get is how do you value early stage companies (at a seed stage) before there’s revenue?

Generally as businesses get larger and raise more capital, you’ll get access to metrics that will drive a business valuation. Especially when these business go public, you can use comparable metrics with other companies on a multiple basis; such as on a profit multiple or revenue multiple.

While these businesses are much larger, these metrics are a great guide for what to expect in the future.

But in an early stage startup, when there’s no revenue, very few metrics, and the business is essentially an idea or a PowerPoint where teams are looking to get formed – there’s no real comparables or metrics to look at.

So typically valuation comes down to a negotiation between founders and investors.

But what rules do you need to keep in mind when it comes to negotiation?
David Gowdey, Managing Partner at Jungle Ventures breaks it down for us.

0:00 – How to value a seed stage business
0:18 – Public company vs startup valuations
1:02 – Founder & investor negotiation
1:36 – Don’t price too high
2:09 – Know how much capital you want to raise
2:53 – Collect information about the market
3:41 – Summary

WHO ARE WE?

Jungle Ventures is a Singapore based Venture Capital Firm that invests in regional or global technology category leaders from Asia.

We collaborate closely with Founders to build the intrinsic value of their company by building a scalable organization and providing dependable long-term capital.

We have grown to become one of Southeast Asia’s largest independent venture capital firms.

FIND US:

Website: https://www.jungle.vc
LinkedIn: https://www.linkedin.com/company/jungle-ventures
Medium: https://medium.com/jungle-ventures
Facebook: https://www.facebook.com/JungleVentures/
Twitter: https://twitter.com/jungleventures@jungleventures

#businessvaluation #businessgrowth #saas

Swedish fintech startup Open Payments has raised a €3 million seed round led by Industrifonden, existing investors Brightly Ventures, Luminar Ventures, and angel investors also participated.

Founded in 2017, Open Payments is one of the leading open banking platforms in the Nordic region. It offers PSD2 (Payment Services Directive regulation) compliant API aggregation and enables businesses to easily and efficiently integrate with banks and other financial services.

Open Payments is licensed by the FSA to provide financial services, openness, and modularization for businesses and developers to build their unique customer offerings. The startup aims to create an ecosystem, where third-party providers and business partners will further enhance the development of the platform going forward.

Open Payments also closed a pre-seed investment of around €125K last year, in May 2019. So far, it has launched its services in Sweden and Finland and plans to continue expanding into more markets across the Nordics and EU by the end of the year.

#Europe #Technology #Sweden #Industrifonden
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In this video, you’ll learn the absolute first things you should do when closing a seed round. What comes after a seed round?

00:00 Introduction
00:10 Steps after closing a seed round
01:02 Getting accounting setup
02:53 Final little tip
03:33 Conclusion

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Additional Resources

https://www.youtube.com/watch?v=2hWlU41KCXg
https://www.youtube.com/watch?v=e7kDwEEkuKk

***********************************

Kruze’s clients have raised over $10 billion in venture funding – find out how we help companies fly through diligence and raise the next round: https://kruzeconsulting.com/startup-venture-capital-finance-experts
#closingaseedround #stepsafterclosingseedround

Be sure to subscribe for more accounting, HR, and finance tips for your startup.
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Hey, it’s Scott Orn at Kruze Consulting, and today we’re covering the absolute first few things your startup should do when it closes a seed round. This is important stuff, seed rounds are usually like the first material amount of money into a company, and you want to do things right when you raise that institutional investor money.

So the first thing you should do is develop a cash management policy. Like super important, be very clear about where you’re keeping the excess cash, because you’re going to keep some of the money in an operating account, some of the money in like a money market savings investment account.

Just do a quick cash management policy that the board can ratify. There’s templates all around the internet, just Google for that. The next thing you want to do is set up a corporate credit card, if you’ve been using your personal card. Now it is not okay to use your personal card. Obviously sometimes you’re going to do this a little bit and submit an expense report, but you want to be professional, you don’t want to be tempted by fraud, so set up a corporate credit card program. Next thing up, get a good accountant. Yes, of course the fine folks at Kruze Consulting CPA are available to do this. But actually having an accountant allows you to buy back some of your own time. You’re not going to have to do the accounting yourself anymore.

Also important, you have a second set of eyes. So there’s a little bit of like separation of duties, which again reduces the threat of fraud. Just make sure your financials are accurate so that you can report good burn rate statistics to your board. You also want to get on QuickBooks, like that’s what all the best accounting firms use. And the great thing about QuickBooks is it integrates with all the new SaaS financial tools. So you kind of get the best of both worlds using QuickBooks. Another thing you are going to want to do is tune up your financial model. You probably had some sort of financial model when you’re raising, if not, now’s the time to build one. But just spend a little bit extra time projecting out next couple years in your financial model. Another thing you’re going to want to do is have budget to actuals. I love budget to actuals, it tells me exactly where we’re overspending and underspending, great for communication with the board. Super, super powerful. So budget to actuals are your friend.

Another thing that a lot of companies just don’t do is send your investors a monthly update. Prefer to be early in the month, like maybe the 15th of the month, something like that, but just give them an update on what’s going on with the company. This is really important because I see companies that have been silent for a long time, all of a sudden they’re in a crisis or maybe they’re short on money, and they go back to their investors asking for more money quickly, and the investors don’t have any context. Also the investors can’t help you, like these people all invested in your company so they can help you out. And if they’re not part of the journey, they’re not going to be able to help you out as easily as they could have if they were just part of the journey and knew exactly what was going on. Final little tip, hire a recruiter/contract with a recruiter, get someone in place who could start helping you build your team. We see something like 70, 75% of all venture capital raised goes to salaries and contractors.

Are you raising capital for your startup?
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How to Raise money?
Raising money is hard. It’s so hard most companies fail at it.
In this video, we’ll look into traction requirements, pitch decks, alternative funding sources, and on how to find investors. This is seed funding for entrepreneurs.

I’m Caya, the CEO of a startup company called Slidebean, and thousands of startups have used our platform to create their pitch decks. Their success is our success, and this is why we get involved with them and have learned a thing or two about what works and what doesn’t.

I started my first company in 2011, and I failed at raising capital. I know the pain of shutting down a website you spent countless hours on and having to email all your customers to say it’s game over.

The problem with my first company is that we spent too much time trying to find investors, hence we failed to notice some of the fundamental flaws in our product.

#seedfunding #startups #venturecapital #slidebean

—
Elizabeth Yin Article:
https://elizabethyin.com/2018/10/18/should-you-raise-money-or-bootstrap/

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Slidebean is a platform for founders to scale their startups. Our platform offers everything you need to build your startup, your pitch deck, set up your company, and start gaining traction.
Our team of experts can also help you write and design your pitch deck and build the financial model for your startup.

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