![]() I am really not comfortable about going into next year with only 13 months of cash and the need to generate revenues to extend runway or do a 2014 financing when the sharks smell blood in the water in the form of a short runway. On the other hand, we could do a small financing now at any valuation you want (short of $4B) and put ~$50MM on the balance sheet. I want us to be able to be really, really patient and get it right. We have to assume there is no AdWords-like magic bullet. It’s going to take a while to come up with a cluster of monetization schemes that get you to the point where you want to be judged on revenue/earnings multiples. Take subscriptions: if you got ~2% MAU conversion to subscription at $1.99 for the balance of the year with no churn, which would be pretty good, it’s $25-30MM post Apple/Google tax. Once you introduce revenue, that becomes the dominant paradigm. Right now it's all about users and growth and engagement, which we know will go up and to the right for a while. If we think we are going to change the market’s perspective through revenue generation, I think that is quite dangerous to assume. ![]() I’m not that valuation-focused anyway, so this matters less to me. We always run the risk that overall froth in the market declines, and we end up filling a leaking bucket - doing everything right to "prove it" while macro valuations decline. I'm not exactly sure what that "proof" would be. On the one hand, we could pull back and attempt to "prove it" to the market to get the higher valuation. At this point, we can take a couple of different paths: ![]() ![]() ![]() Here are some of the things I think we should have on the agenda:ġ) Financing. We should get on the phone at some point soon - I'm around the balance of the week at your convenience, other than today, where I am locked in meetings until late tonight. Rather than add too much commentary, I’ll jump straight to the content.īenchmark GP and Board Member Mitch Lasky wrote: I strongly recommend reading the whole email. This email snagged in the Sony email hack is an excellent example of the mindset and form through which companies are built! The VC and startup world has been overrun with content marketing - very very few publicly available pieces reflect how business is actually done. ![]()
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