Venture Capital Strategy: How to Think Like a Venture Capitalist

The best tool for estimating exit valuations is identifying comps, or comparables: other startups that have already exited.

To identify comps, we should keep in mind that there are several ways a comp could be considered comparable to the startup we’re looking at. Variables to consider include: the problem/solution, level of disruption, team, competitive landscape, scalability and pretty much every other section of the VC Razor.

Trade secrets are not limited to technology leads. They can also include ways that we operate our business that give us an advantage over competition. Our founding team, for example, may have core competencies that others simply cannot copy. Or we might have exclusive access to better, faster or cheaper suppliers. We may also have developed an in-h

how easily other companies might enter the market, whether there are other types of products that could solve this problem and the relative power of buyers and sellers.

lacks necessary granularity to explain the context for a specific startup.

Product companies sell things, such as apps, games and software. Service companies sell getting things done, traditionally requiring human labor, such as consultants or lawyers.

that acquirers are looking for, often in combination: revenue, customers and capabilities.

Trade secrets refer to anything that we are doing as part of our business that others cannot easily figure out. This advantage is the source of the phrase “secret sauce,” and was made famous by food producers like Coca Cola

TurboTax has significant stickiness. A consumer would have to choose to re-enter the information into a new system.