Financials and Key Metrics for M&A

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In selling your business, the buyer will look for key financial metrics.

Here are some key metrics to include in your pitch:

Total revenue -- revenue before discounts, returns, and adjustments.

This shows top-line sales for the company.

Sales in units -- the number of units sold over a period of time.

This helps the buyer in estimating forecasts.

Cost of customer acquisition -- the cost to acquire new customers.

This shows how much is required to gain a new account.

Gross margin -- revenues minus cost of goods sold yields gross profit.  

Gross margin is the gross profit divided by revenues and shows how much revenue is left over for sales and marketing expenses.

Growth rate -- percent increase in sales month over month, or year over year.

This shows how fast your startup is growing 

Burn rate -- the amount of cash spent over and above the incoming revenue.

This shows how much cash is required to maintain the current business level.

Fixed costs -- the costs that are fixed regardless of the amount of units sold.

This shows the overhead required to run the business.

EBITDA -- the revenue minus the cost of goods sold and sales and marketing costs.

This shows the amount of revenue available to reinvest in the business.

Acquirers will want to see these numbers to consider buying your company.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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On this episode of Investor Connect, Hall welcomes Ivan Maltsev, General Partner at 3x Capital.

3x Capital is an investment and advisory firm focused on seed-stage web3 startups. Visit 3x Capital at www.3xcapital.fund.

Holding an MS in Business Law and being a PhD candidate in International Economy, Ivan transitioned into crypto investments in 2016, focusing primarily on BTC and ETH. Since 2017, he’s been actively managing his own crypto portfolio and investing in early-stage tokens.

Ivan shares the importance of education for both investors and founders in the blockchain space. Ivan highlights the challenges of talent acquisition and stresses the need for more experienced founders in the industry. That is why 3x Capital decided to launch 3x Education in order to help investors and founders to overcome challenges. Visit the website of the program: www.3xcapital.fund/education

Connect with them on LinkedIn at www.linkedin.com/company/3x-capital and with Ivan personally at www.linkedin.com/in/ivanxmaltsev.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.