Business 101 for startups by Fred Wilson
A couple weeks ago, in a comment to an MBA Mondays post, Dan Lewis wrote “LTV has to be higher than your CPA or you’re not going to make it.” I asked Dan to elaborate in a MBA Mondays guest blog post on this topic and he agreed. Here’s Dan’s post:
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Last week in MBA Mondays we talked about margins, which I defined as:
Margin is the amount of money you make on each incremental sale or unit of revenue before factoring in the “fixed costs” of your business.
That led Amish Shah to leave me this comment…
Continue readingMargins (continued)
Margin or margins is a word you hear a lot in business. I want to talk about what it means and why it is important today on MBA Mondays. I did talk about margins once before, in the context of the income statement, back when we were walking through the basic financial statements. But I’d like to…
I’m a fan of 360 reviews for companies of all shapes and sizes. I was talking to the CEO of one of our portfolio companies yesterday about his company and he said “we have about 50 employees. is it time to do 360s?” I told him that he was well past the point where he should start them. He asked for some…
This is my final MBA Mondays post on M&A Issues. I’ve been posting about M&A since last December. It feels like a semester long effort. And frankly I’m a bit tired of talking about M&A every monday. But selling your company is an important topic and I think we’ve done it justice now on MBA Mondays.…
Continue readingM&A Issues: Price
We are getting to the end of the series on M&A. Two more M&A Issues to talk about and then I am done. The final two are consideration and price. Today I’ll talk about consideration and next week I’ll talk about price.
Consideration is the way in which you and your shareholders will get paid. The most…
Continue readingM&A Issues: Consideration
Yet another post in the M&A Issues series. This one is about timing, ie how long it should take from the first serious conversation about a sale transaction until the closing.
I’ve seen acquisitions done in a week. I’ve seen acquisitions take over a year from the first serious conversation to close. And one thing I know…
Continue readingM&A Issues: Timing
Yet another post on issues in M&A. This one is about the things you will sign up to when you sell your business and the money you will set aside to cover them.
First things first. I am not a lawyer. And this post is about legal stuff. I barely know how to spell indemnities. I had…
Continue readingM&A Issues: Reps, Warranties, Indemnities, and Escrows
Continuing our discussion of M&A Issues, we are going to talk about breakup fees today.
A breakup fee is a payment made by the buyer to the seller if the M&A transaction doesn’t close.
Many M&A transactions do not include breakup fees, particularly smaller transactions. But as the value of the transaction rises and the…
Continue readingM&A Issues: Breakup Fees
Yesterday I went up to Harvard Business School and participated in a lunch and a class. My friend Jeff Bussgang arranged the trip and we were hosted by HBS Professor Tom Eisenmann. Jeff and I sat in front of Tom’s class Launching Technology Ventures and talked for almost 2 hours on topics like Lean Startup…