Startup Funding Espresso -- Rating Your Deal Flow
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Deal flow is the lifeblood of the startup investor. It\u2019s important to assess the deals in short order to prioritize follow-up. One way to help this process is to apply a rating to each deal. Here are some key factors and how to calculate them to use in your rating: Revenue run rate - take your current monthly revenue and multiply by 12 to annualize it. Gross Margin - take your Cost of Goods Sold, divide by the revenue, and subtract 1.\xa0 Burn Rate - monthly cash expenses minus monthly revenue. Cohort Analysis - take the number of users who join the program and track the outcome of each.\xa0 Cost of customer acquisition - monthly sales and marketing expenses divided by revenue from the customers signing up that month. Payback - number of months of recurring revenue to cover the cost of customer acquisition. Magic Number - revenue over two months multiplied by four and divided by sales and marketing costs over the same timeframe. Sales Cycle - average number of days from first contact to customer signing up. Lifetime Value - the total amount of revenue generated from a customer. Total Available Market - the total amount of money spent in a target market. Give each factor a score, say 1 to 10 with 10 being the best.\xa0\xa0 Add up the factors to give the deal a score on a scale of 1 to 100. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0 For Feedback please contact info@tencapital.group\xa0\xa0 Music courtesy of