4. 4
IVP Summary
Current Fund: IVP XIV, a $1 billion later-stage venture capital fund
Target Sectors: Tech only (Consumer and Enterprise)
Investment Focus: Growth companies, generally with over $10 million in revenue
Geography: Primarily United States
Team: 6 General Partners with over 100 years of combined experience
Portfolio: Over 300 companies, 99 of which have gone public
14. 14
Magic Number
Magic Number =
(Q1 GP$ - Q4 GP$) *4
Q4 S&M$
A Magic Number of 1 means you break even on
your sales and marketing spend after 1 year
15. 15
Magic Number Example
Q4 2013 Q1 2014
Revenue 22,501 25,092
Gross Profit 14,848 16,097
Operating Expenses
R&D 4,551 5,178
S&M 11,404 14,287
G&A 4,693 6,384
Operating Loss (5,800) (9,752)
Magic Number 0.44x
Time to Breakeven 2.3 years
Magic Number = = 0.44x or 2.3 yrs to breakeven
($16.1 – $14.8) *4
$11.4
16. 16
LTV / CAC
LTV / CAC =
GP$ Per Customer * Avg. Customer Life
Customer Acquisition Cost
17. 17
LTV / CAC Example
LTV / CAC = = 7x
$700 * 5
$500
• You sell your product for $1,000 per year at 70% GP
• Customers churn 20% per year (5 year average life)
• It costs $500 to acquire each customer
30. 30
Cohort Revenue (Negative Churn)
Source: Model adapted from Startup Calculus (Joe Floyd)
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug12 Sep 12 Oct12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13
Revenue Growth by Cohort
Mar 13
Feb 13
Jan 13
Dec 12
Nov 12
Oct12
Sep 12
Aug12
Jul 12
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
31. 31
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug12 Sep 12 Oct12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13
Revenue Growth by Cohort
Mar 13
Feb 13
Jan 13
Dec 12
Nov 12
Oct12
Sep 12
Aug12
Jul 12
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
Source: Model adapted from Startup Calculus (Joe Floyd)
Cohort Revenue (8% Churn)