#sharktank

Day

7

of

decoding

startup

terminologies...

What

is

the

significance

of

burn

rate

in

businesses

and

why

are

Sharks

so

interested

in

knowing

the

burn

rate

of

a

business?

Read

below

⬇️

to

know.

The

business

which

is

not

making

profit

would

be

burning

some

money

to

sustain,

right

?

This

burn

would

include

all

the

marketing

cost,

salaries,

operational

expenses,

cost

of

goods

etc.

So,

whatever

loss

the

business

would

be

incurring

on

a

monthly

basis

would

be

its

monthly

burn

rate.

Now

Sharks

or

investors

are

interested

in

this

number

to

know

how

sustainable

a

business

is.

Basically

there

would

be

one

of

these

2

scenarios

where

a

business

needs

to

create

balance.

1️⃣

If

the

burn

rate

is

very

high,

there

might

be

liquidity

issues

in

future

(in

case

of

lack

of

funding)

and

the

business

might

also

have

to

shut

its

operations

if

the

burn

rate

is

too

high.

2️⃣

If

the

business

is

not

doing

enough

marketing/branding

and

is

spending

too

less

or

the

burn

is

low,

they

might

not

grow

in

the

pace

they

want

and

might

be

left

behind

by

the

competition.

#Business

#startup

#entrepreneurs

#marketing

#sharktank

#burnrate

Day

5

of

decoding

startup

terminologies...

In

season

3

of

Shark

Tank

India

you

would

have

noticed

that

Sharks

are

asking

for

royalty

it

a

lot

of

deals

they

do.

So

what

exactly

is

this

Royalty

and

why

are

Sharks

so

keen

to

have

this

as

par

of

their

investment

terms?

See

Royalty

is

nothing

but

a

commission

which

Sharks

would

get

on

every

sale

the

business

will

make.

For

example

if

a

pen

is

sold

for

Rs.

10

and

Shark

wants

a

10%

Royalty.

This

means

that

the

Shark

will

get

Re.

1

on

each

pen

sold.

As

simple

as

that.

Now

comes

the

part

that

why

they

want

Royalty?

So

the

very

simple

answer

to

this

would

be

that

there

are

businesses

which

seems

risky

to

invest

and

in

order

to

get

some

assurance

of

the

returns

,

Sharks

asks

for

royalty.

It

makes

then

feel

safe

and

reduce

the

risk

of

investment.

I

personally

don't

like

this

concept

and

I

will

tell

you

the

reason

in

the

next

video.

What

are

your

thoughts

on

this

?

#Sharktank

#India

#Royalty

#business

#entrepreneur

#marketing

#sales

#MBA

#bba

#startup

#founder

#Money

#MoneyMatters

#HipiMoney

#HipiFinance

#HipiFunds

#FinancialTips

#HipiFinance

#FinanceonHipi

#Hipi

Day

3

of

decoding

startup

terminologies...

This

is

why

founders

fight

for

high

valuations

for

their

business

in

Shark

Tank...

Imagine

you

are

running

a

business

and

have

100%

of

its

equity

at

a

valuation

of

1

crore...

So

you

net

worth

will

also

me

1

crore...

Now

after

increasing

some

revenue,

you

go

on

shark

tank

to

raise

funds

and

you

gave

10%

of

your

equity

in

exchange

of

20

lacs

(at

a

valuation

of

2

crores).

So,

you

equity

will

go

down

from

100%

to

90%,

but

your

net

worth

will

now

be

1.8

crores

(90%

of

2

crores).

Because

of

higher

valuation

of

business,

despite

the

reduced

equity,

your

net

worth

increases

and

this

is

the

main

reason

founder

fight

for

higher

valuation

of

the

business...

#sharktankindia

#business

#growth

#reels

#Marketing

#startup

#entrepreneurs

#Sharktank

#Money

#MoneyMatters

#HipiMoney

#HipiFinance

#HipiFunds

#FinancialTips

#HipiFinance

#FinanceonHipi

#Hipi

Day

2

of

decoding

startup

terminologies...

How

do

founders

come

up

with

such

hefty

valuation

?

Basically

there

is

no

right

or

wrong

formula

to

calculate

a

proper

business

valuation

and

it's

always

a

negotiable

thing...

Typically

founders

calculate

the

valuation

by

applying

a

multiplication

factor

to

their

annual

revenue.

It

ranges

somewhere

3x

to

10x

of

the

revenue...

And

then

they

use

many

factors

to

justify

this

valuation

like

they

quote

-

1.

Annual

run

rate

(ARR)

2.

Founders

education

3.

Founders

experience

4.

Competition

5.

Market

size

6.

Repeat

rate

7.

EBIDTA

margin

If

you

want

to

know

more

details

on

any

of

these

topics,

let

me

know

in

the

comments

section...

#sharktank

#sharktankindia

#businessreels

#casestudy

#marketing

#valuation

#Entrepreneurship

#Money

#MoneyMatters

#HipiMoney

#HipiFinance

#HipiFunds

#FinancialTips

#HipiFinance

#FinanceonHipi

#Hipi

Day

1

of

decoding

startup

terminologies...

Do

you

know

the

difference

between

Pre-money

and

Post-money

Valuation

?

Read

below

⬇️

Pre-money

Valuation,

is

the

Valuation

of

the

business

prior

to

the

external

investment

whereas

Post-money

valuation

is

the

Valuation

of

the

business

after

adding

the

investors

fresh

money

in

the

overall

business

Valuation.

I

have

explained

this

concept

with

the

help

of

a

simple

example

in

the

video

itself.

Follow

for

more

such

informative

video

where

I

de-code

some

of

the

business

and

marketing

concepts

with

easy

examples.

#Valuation

#SharkTank

#businesslessons

#marketing

#concepts

#business

#knowledge

#Entrepreneurship

🙌🏼🙌🏼🙌🏼#sharktank

#DigiscapeAI

#AI

#Celebrity

#CelebrityLookAlike

#Art

#Design

#HipiKaroMoreKaro

#Trending

#Fun

#Dance

#Music

#Viral

Day

7

of

decoding

startup

terminologies...

#sharktank

#marketing101

#business101

#burnrate

60000000

करोड़

का

अंपायर

#sharktank

#sharktankindia

#sharktankindiaseason3

#sharktankindiaseason3episode1

#sharktankindiaseason2

#sharktankusa

#sharktankscrubdaddy

#sharktankseason3

#sharktankindiasea

50000

हजार

सी

खड़ी

कर

दी

कम्पनी

#sharktank

#sharktankindia

#sharktankindiaseason3

#sharktankindiaseason3episode1

#sharktankindiaseason2

#sharktankusa

#sharktankscrubdaddy

#sharktankseason3

#sharktank

Ashneer

Grover

is

not

Watching

Shark

Tank

season

2

#motivation

#shark

#sharktank

#sharktankindia

#sharktankseason2

#sharktankseason3

#sharemarket

#sharks

#sharktankseason1

#podcast

#motivationalvid

Yale

University

Pune

on

Sasta

Tank

#SharkTank

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#AshishChanchlani

#HipiKaroMoreKaro

Sasta

Tank

#SharkTank

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#AshishChanchlani

#HipiKaroMoreKaro