The User Generated Source for Venture Capital, Private Equity, and Start-up SWAGs
Dec 13
Other click-through rate, cpc, ctr, google adwords, online advertising, pay per click, Rule of Thumb No Comments
As a rough rule of thumb, click through rates of a typical campaign should be above 0.025% and probably closer to 1%. Highest click through rates for a broad campaign can be in the 4% range.http://partner.linkedin.com/directads/bestpractices/index.html#performance
http://www.gootheory.com/2006/01/30/what-is-considered-to-be-a-good-ctr/
Jan 26
Legal, Personal Finance Contingent Fee Agreement, No Win No Fee Compensation, personal injury claim, Rule of Thumb No Comments
A general rule of thumb for a contingent fee agreement is that for a personal injury claim case it will take 9-12 months to reach agreement on compensation.
Jan 13
Startup, Venture Capital equity, ownership, Rule of Thumb, stock options No Comments
A rule of thumb for startups is to set aside a pool of stock options that equates to 10% of the company following its first round of funding. This employee stock option plan will be used as compensation for future employees, that is, employees beyond the founding team.
Jan 13
Personal Finance auto insurance, auto insurance quote, Insurance, Rule of Thumb, Savings No Comments
As a rule of thumb, you should estimate that you can reduce your auto insurance by 10-15% by combining your automobile insurance with the same carrier as your homeowners or renters insurance. This discount could be applied to your auto insurance or you homeowners insurance. For example, I received a 10% discount on my homeowners insurance because I had my auto insurance with the same insurance provider.
It’s important to note that despite this discount, you should still shop around to get homeowners and auto insurance quotes from separate providers. I did this and was able to save over $500 per year even after having my homeowners increase because I was no longer getting the discount.
Nov 21
Acquisition, Valuation Maintenance, Multiple, Revenue, Rule of Thumb, Software, Valuation 1 Comment
A rule of thumb for the acquisition value of a revenue stream from software maintenance is 3 to 4 times trailing twelve months revenue (3-4x revenue multiple). This assumes that the maintenance stream has a high renewal rate (typically in the 85% to 90% range) with high gross margins (80% or higher).
Oct 07
Business Financial, Rule of Thumb, stock No Comments
A very very loose Rule of Thumb for gauging when the stock market has hit bottom is when news of the crash has become main stream. This is typically indicated by front page articles in the main stream (i.e., non-financial press) that are talking about the financial crisis.
Jan 25
Acquisition, Business Acquisition, LOI, M&A, Rule of Thumb No Comments
Most large corporations require approximately 9 months to identify an acquisition target. Once a corporation has defined its strategy and identified a target area for acquisition, it typically takes about 9 months to identify the players in the space, conduct preliminary due diligence, gain necessary internal approvals, and negotiate an LOI (letter of intent). Once the LOI has been signed by both parties, it will usually take 1-2 months to complete due diligence and negotiations so that a Definitive Agreement can be executed. Including this time, a corporation may take as long as a 1 year to complete an acquisition.
Nov 27
Business, Startup ASP, Average Selling Price, business model, Rule of Thumb, sales force, Start-up No Comments
A product or service needs to have an Average Selling Price (ASP) of at least $200,000 to justify a direct sales force. Anything less than $200k needs to be sold via partners, channels, or inside sales. This should be helpful in developing business models for start-up companies, particularly in the enterprise software space.
Nov 08
Legal, Private Equity, Venture Capital 99/1 Rule, Committed Capital, GPs, LPs, Rule of Thumb No Comments
For a myriad of complex legal reasons, Limited Partners require General Partners to contribute their own capital into their venture capital fund. While this amount can vary, the vast majority of the time GPs need to contribute 1% of the committed capital with LPs contributing the remaining 99%. Thus the 99/1 rule.
Nov 08
Private Equity, Venture Capital Fund, J Curve, Rule of Thumb No Comments
The depth of an venture capitalist or private equity investor’s “J curve” is typically 3 years. In good times (such as 1999) it can be as short as 1 year. In bad times (such as 2002) it can be as long as 5 years…or infinite. A “J curve” is the graphical representation of the value of a portfolio of illiquid investments over time. For example, in the first years of a venture capital firm’s new fund, they are deploying capital at cost and collecting management fees. Therefore, until they have a reason to write up the value of their investments (follow-on funding at higher valuations) or a liquidity event, the value of their fund is lower than the capital contributed. So, the depth or length of the “j curve” is the length of time that a funds value is less than the capital contributed.