One of the questions I get asked often by entrepreneurs is how they can build a really valuable business, and what metrics they should consider. It's a big question and there are so many qualitative and quantitative as well as subjective parts to this.
At a high level, the answer is that when you reach scale, the business will be valued by the size of your potential market opportunity, your demonstrated leadership and growth in the market, based on some differentiated and defensible advantage* with a business model that shows real financial leverage. And of course there will be many other elements such as the quality of your team and the trust in your brand.
Looking at the business model, I have been lucky enough to work with some terrific investment banks over the years while building, taking public and selling companies and asked Goldman Sachs to share the work done recently around SaaS and Cloud companies where I focus my investing.
Here are some introductory slides from our Business Model session that highlight the some of the key elements such as Retention and Upsell that can not only be correlated to, but drive high leverage in your valuation.
This is part of the workshop on Game Changing Business Models - itself part of the series on Startup Secrets, by Michael J Skok on how to get competitive advantage as a startup.
Michael's slides are the framework for the workshop, and are NOT self contained. For fuller coverage of the slides, visit Michael's website http://mjskok.com/