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Venture Capital Analysis - All Revenue Is Not the Same

Published: 5/26/2011 8:44:01 AM


Excellent if long piece by noted VC Bill Gurley about how to value startup companies when there are so many future variables involved. This post is particularly relevant given the recent IPO of social network LinkedIn.

View post here

He discusses a variety of key business characteristics that can be used to separate high-quality revenue companies from lower quality revenue companies:

  • Sustainable competitive advantage
  • Network effects
  • Visibility & Predictability
  • Customer lock-in with high switching costs
  • Gross Margin Levels
  • Marginal profitability calculation
  • Customer concentration
  • Major partner dependencies
  • Organic Demand
  • Growth Trajectory

Happy reading...

VentureDeal

 

Don Jones
CEO, VentureDeal

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