Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) As we described in previous posts , startups fail on the day they’re founded if they are organized and managed like they are a small version of a large company. that make up a business model.

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Burn Rate Management Business Model Customer Development 250

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) You can continue to grow the business based on organic cash flow or you now can develop a business plan that deserves investment based on observed outcomes (“facts&# ).

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Lean Silicon Valley Startup RSS 259

Up and Running

APRIL 2, 2020

Now more than ever, the answer is business planning , which right now, you might call it your emergency plan, contingency plan, disaster plan, or whatever. . If you’re looking for a place to start, I suggest focusing on effectively managing your cash flow. A working business plan connects the dots.

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Forecast Salary Business Plan Balance Sheet 157

Genuine VC

FEBRUARY 9, 2011

So most of your calculus in selecting the right startup role should involve understanding the company’s market and business plan in executing toward a grand vision. Employee count is the strongest (but not a perfect) proxy for management’s and investors’ outlook on the business.

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Startup Burn Rate Technical Review Down Round 146

Tim Keane

DECEMBER 14, 2009

  A low burn rate is a pearl of great price.    It provides lots of options that high burn rates take away.    A low burn rate is a pearl of great price.    It provides lots of options that high burn rates take away.  Managing Company Growth.

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Burn Rate Angel Groups Seed Stage Startup 60

Startup Professionals Musings

JULY 4, 2021

More recently, the concepts have been applied to the general business management context, in a classic book by Certified Turnaround Professional, Thomas H. Gray, titled “ Business Techniques for Growth.” Delays in sharing, or lack of communication from the top, result in time and effort wasted, adding no value to the business.

Startup 404

Startup Lean Metrics Matching 404

Startup Professionals Musings

DECEMBER 15, 2014

Entrepreneurs who plan to complete a business plan the first month, find an investor the second, and roll out a product the third month are just kidding themselves. Count on several months of effort and costly assistance to court investors, with less than a 10% success rate.

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Bootstrapping Entrepreneur Startup Burn Rate 276

Startup Professionals Musings

AUGUST 14, 2015

That does work once in a while, usually with some serious collateral damage, but a less painful approach is to prepare and plan for each step along the way. One preparation example is the value of building a business plan before you start. Calculate and manage your financials.

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Elevator Pitch Burn Rate Startup Metrics 120

Startup Professionals Musings

JUNE 28, 2013

Entrepreneurs who plan to complete a business plan the first month, find an investor the second, and roll out a product the third month are just kidding themselves. Count on several months of effort and costly assistance to court investors, with less than a 10% success rate.

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Startup Burn Rate Bootstrapping Valuation 264

Both Sides of the Table

JULY 13, 2013

I started as a programmer, and then a database designer, and then a project manager, and I led conversion teams. And for every time I’ve felt hugely stressed that our burn rate was getting too high, and I didn’t know who else was going to fund the company, and I’m all in on this company, right?”

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Cofounder Technical Cofounder Startup San Diego 337

Gust

DECEMBER 7, 2014

Entrepreneurs who plan to complete a business plan the first month, find an investor the second, and roll out a product the third month are just kidding themselves. Count on several months of effort and costly assistance to court investors, with less than a 10% success rate.

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Bootstrapping Entrepreneur Startup Burn Rate 191

Steve Blank

FEBRUARY 16, 2010

You would think that would be enough to get wrong, but entrepreneurs and investors compound this problem by assuming that all startups grow and scale by executing the Revenue Plan. Reality Meets the Plan. The VC’s were very concerned that the revenue the financial plan called for wasn’t being delivered by the sales team.

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Revenue Balance Sheet Hockey Stick Burn Rate 232

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. There are no standards for what each side (board versus management) does. Most board meetings never get past big company metrics to focus on the crucial startup numbers. The Wrong Structure.

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Silicon Valley Business Model Venture Capital Balance Sheet 296

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. There are no standards for what each side (board versus management) does. Most board meetings never get past big company metrics to focus on the crucial startup numbers. The Wrong Structure.

Silicon Valley 269

Silicon Valley Business Model Venture Capital Balance Sheet 269

Up and Running

OCTOBER 1, 2014

When you’re starting a business to build your own luck, you don’t often have a lot of start up capital. Nelson has some tips: Know your burn rate. Plan ahead. Business planning has been a big factor for Theme Dragon since the beginning, and in any smart business, you want to know where you’re headed.

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Bootstrapping Cofounder Portland Burn Rate 107

Up and Running

MAY 22, 2018

But, if you have an idea for an awesome app but no technical app development skills, you’ll go through pretty much the same drill as small business owners looking to scale. You’ll be looking for both investors and the right talent on your management team to drive growth. Nerdy term: Burn rate. Master the numbers.

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Exit Strategy Angel Investor Search Elevator Pitch 90

Professor VC

OCTOBER 11, 2010

I'd be happy to send you our business plan, exec summary, and ppt. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. If I could have coffee with you sometime and talk either in San Jose or Palo Alto that would be great.

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Social Network Networking Software Review San Jose 28

Startup Lessons Learned

MARCH 13, 2009

Figuring this out takes time, and few entrepreneurs have the patience to wait it out, because the business plan does such a good job of explaining what customers are going to think. The problem is that customers dont read your business plan. We didnt manage todo that yet. I think it comes down to managing risk.

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San Francisco PR Lean Early Stage 168

Up and Running

AUGUST 21, 2014

Once you start making some revenue and you’re actually charging customers, you’re going to have to be able to answer all questions: what’s your burn rate, what’s your CAC, how much money do you have in the bank, what is your average AR and AP, what are your direct costs, what’s your net profit, what’s your EBITDA?

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Metrics Startup Churn Rate Forecast 84

Professor VC

DECEMBER 18, 2008

Many entrepreneurial programs feature a business plan competition, which is a great exercise. At SJSU, we also have a business plan competition in the spring, which ideally allows the students to build a viable business model around their NIF projects. Can Entrepreneurship Be Taught? ► October. (1).

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San Jose Silicon Valley Technical Review Angel Investor 28

Professor VC

MAY 29, 2008

An entrepreneur will pitch their business plan to what they think is a group of angel investors and will get a number of follow-up calls afterwards, but they are pitches for services not investment interest. I think this sentiment has given angel groups a bad name. Can Entrepreneurship Be Taught? ► October. (1). ► July. (1).

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Angel Investor Angel Groups Accredited Investor San Jose 28

Professor VC

NOVEMBER 19, 2009

They need to have a place where they can gain an understanding of their different options for financing the venture, how to determine exactly what is needed in the marketplace, how to negotiate, how to read contracts, the role of technology, how to write a business plan, understand what your ratios are saying. March 19, 2012 11:12 AM.

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San Jose Silicon Valley Las Vegas Venture Capital 43

Professor VC

FEBRUARY 12, 2008

I first met Jeff about 8 years ago when he was finishing his first year at the Stanford GSB and was beginning to raise money for a business plan he developed for a secondary market ticket exchange. I started thinking about this yesterday when Jeff Fluhr, founder of Stub Hub spoke at my San Jose State class. ► October. (1).

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San Jose Technical Review Venture Capital Angel Investor 31

www.paulgraham.com

APRIL 28, 2010

And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. The fund managers, who are called"general partners," get about 2% of the fund annually as a managementfee, plus about 20% of the funds gains. At Viaweb we managed to raise $2.5

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Technical Review Startup Software Review Angel Investor 76

Professor VC

MAY 30, 2009

We held our annual business plan competition at San Jose State this month and first prize was $10,000. Ryan was actually working on another business plan for my class when he came to discuss this concept with me a few weeks before the business plan competition. The last blogger in Silicon Valley.

San Jose 28

San Jose Angel Investor Silicon Valley Bootstrapping 28

Professor VC

JUNE 20, 2011

Now that iControl has raised over $100M, this got me thinking back to our original business plan. But of course, the model had us requiring only $10M equity to breakeven and to achieve $185M in revenues in 2008 (the magic Year 5 in all business plans). Can Entrepreneurship Be Taught? ► October. (1). ► July. (1).

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San Jose Angel Investor Term Sheet Venture Capital 28

Professor VC

AUGUST 26, 2011

To that last one, there is certainly some truth as the standard time vs. revenue chart in most business plans looks like this: Im not teaching Entrepreneurial Finance this semester for the first time since Fall 2007. Is the model consistent with the business plan? Does the business model make sense? ► July.

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Silicon Valley San Jose Hockey Stick Venture Capital 35

Professor VC

FEBRUARY 26, 2010

Of course, given the state of venture returns, perhaps randomly picking from a stack of business plans would provide as good or better results than an entrepreneur selection algorithm or detailed due diligence. I recall that the WSJ used to run a contest in stock picking between investment analysts and selection by darts.

San Jose 28

San Jose Silicon Valley Venture Capital Angel Investor 28

Professor VC

SEPTEMBER 26, 2008

As I am quoted in the article, it is easy to pick holes in a business plan. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. Can Entrepreneurship Be Taught? ► October. (1). Watch Out for the Red W(h)ine. ► May.

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Angel Groups San Jose Early Stage Angel Investor 28

dondodge.typepad.com

JANUARY 15, 2011

The theory is that if they trust you and your business plan enough to give you $5M, then you have probably created something that is already worth $5M. If a VP level person gets 100,000 shares, then a director level person might get 50,000, and a manager/supervisor might get 25,000 shares. 5% Managers -.25%

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Equity Employee Dilution Valuation 40

Professor VC

JANUARY 20, 2009

Evaluate Business and Financing Needs - We initially went out seeking $10 million in financing, but listened to the prospective investors and watched the market. Mid-way through the process, we took another cut at our business plan and built a model where $5 million would be sufficient to get us beyond breakeven. ► July.

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Venture Capital Silicon Valley San Jose Bootstrapping 28