© 2017 by The Revenue Group

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August 24, 2017

A big reason early stage companies fail is because they ran out of cash. A key job of the CEO is to understand how much cash is left and whether that will carry the company to a milestone that can lead to a successful financing, or to cash flow positive.

Milestones for Raising Cash

The valuations of a startup don't change in a linear fashion over time. Simp...

July 25, 2017

The #1 reason most companies fail, even more than running out of cash, is that their business model was not viable.

We have good ideas, but bad businesses.

After spending time with hundreds of early stage CEOs companies over the years I’ve noticed that CEOs and Founders are too optimistic about how easy it will be to acquire customers. They assume that beca...

June 20, 2017

Business leaders need great people both inside the company and out - investors, customers, partners, advisors - as well as a great support network at home. All of these people are critical to the business.

As important as any other aspect of your job as CEO is the need to cultivate the best team possible given the limitations of your budget, mission and he...

May 11, 2017

Confession time.

I have done exactly what I have been telling my clients NOT to do.  I’ve been working “in” my business, not “on” my business.

It’s been a long time since I’ve written a blog post.  I started out writing a post 3 times per week, then 2x/week, then 1x/week, then 2x/month, then 1x/month, then….. nothing. Nothing for over 8 months.

I’ve been bus...

January 13, 2016

The single most important factor in determining the valuation of a software company is the revenue growth rate.

In real estate what matters is location, location, location.  In software it’s growth, growth, and growth.

Software companies are primarily valued based on revenue multiples. What drives the revenue multiple is expectations for future revenue grow...

March 4, 2015

The market makes you look smart or dumb.  When it’s going your way, it covers up a lot of mistakes.  When it’s not going your way, when the market is down, all your weaknesses seem to be exposed.  This is a big issue when you’re growing your business.

One of the things the market does is pull your senior management’s focus away from what it shoul...

January 7, 2015

When building your company you’re bound to hit “growth walls”.  All growing companies encounter walls of complexity, usually when they hit certain revenue milestones. For some there is a wall at $10 million, then $25 million, then $50 million, then $100 million, and so on.

But what does that mean?

In truth these “walls” aren’t really related to revenues at...

November 22, 2013

Why do companies buy other companies?  Is it because they can get a positive IRR (internal rate of return) or ROI (return on investment)?  Do they do deals because the return may be greater than their WACC (weighted average cost of capital)?  No, absolutely not.

Then why are those measurements used to determine if an acquisition was successful? T...

August 14, 2013

Wish, Want, Walk.  A simple method to better negotiating.  In M&A and Strategic Partnerships we negotiate all the time.  There are a lot of different techniques and advice on How to Negotiate, all with multiple steps that you can never remember when you’re in the heat of negotiation.  Wish, Want, Walk, is an easier way, one that I use because it’s easy fo...

May 9, 2013

You’re looking to grow your business.  You’ve got your sales force and you’re spending money on marketing.  But wouldn’t a strategic partnership help you leverage someone else’s sales team?  How do you do that?  What are the issues to be aware of?

Strategic partnerships take many forms: cross-licensing, OEM, equity and non-equity alliances....

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