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1/ Some signs to look for that suggest your startup equity won't be worth shit
(note: there are probably exceptions but generally, these will steer you right)
2/ Companies who talk about innovation in HR and other functions more than they talk about innovating on the product
Gimmicky isht like this is never a good sign
3/ Billion dollar valuation pre-product
4/ Mid- to later-stage company and the about us page is all about their investors
That's ok at the early stages but eventually you gotta build some shit for customers
If you're bragging about your investors at Series B, C, the actual biz model is fundraising
5/ Where the revenue/raised ratio is totally f^cked aka low
This is co revenue / total raised
Esp problematic as companies get more mature
The best companies are machines at turning $ raised into revenue at some point
Bit more here
(note: there are probably exceptions but generally, these will steer you right)
2/ Companies who talk about innovation in HR and other functions more than they talk about innovating on the product
Gimmicky isht like this is never a good sign
3/ Billion dollar valuation pre-product
4/ Mid- to later-stage company and the about us page is all about their investors
That's ok at the early stages but eventually you gotta build some shit for customers
If you're bragging about your investors at Series B, C, the actual biz model is fundraising
5/ Where the revenue/raised ratio is totally f^cked aka low
This is co revenue / total raised
Esp problematic as companies get more mature
The best companies are machines at turning $ raised into revenue at some point
Bit more here
Some SaaS revenue/raise ratios of cos (anonymized) who've raised in last 3 months.
— Anand Sanwal (@asanwal) November 30, 2018
Collaboration software = 0.25-0.37x
Research & data analytics = 0.28x
Biz Intelligence = 0.12x
Some comparison points
Domo pre-IPO = 0.16x
Tableau (at IPO) = 8.51x
Frothy out there or rational?