Startup Professionals Musings

DECEMBER 11, 2022

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Steve Blank

FEBRUARY 26, 2020

Not all startups need outside investment to grow. What most founders don’t realize is: Every stage of a startup requires a different set of metrics and milestones and founder skills. Here’s the first 2½ years of a startup journey. The Startup Investment Landscape. Team, Product, Traction, Business Model and Market.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Hunter Walker

JULY 18, 2022

Why I’m Not Telling Every Startup To ‘Pull The Brakes’ Just Yet. Multiples dropped in public and private markets, growth expectations were cut, and business models with high spend for promise of future ROI became quite unfavorable. The ‘valuation multiples’ reset also came with an increase in slope of the curve.

Valuation 116

Valuation Cap Table Startup Later Stage 116

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? August 2010 Two years ago I wrote about what I called " a huge, unexploitedopportunity in startup funding :" the growing disconnect betweenVCs, whose current business model requires them to invest largeamounts, and a large class of startups that need less than theyused to.

Startup 93

Startup Valuation Non-Compete Deal Flow 93

Both Sides of the Table

MAY 23, 2012

I can’t help feel a bit of rear-view mirror analysis in all of “VC model is broken” bears in our industry. I have been close to the tech & startup sectors for more than 20 years and I can’t think of a period in which I felt more optimistic about the innovation and value creation I see in front of us. Thank you, Aaron Sorkin!

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Austin Startup

AUGUST 20, 2017

August 20, 2017: This is another in my series of posts all leading up to a book on Startup Decision Making. One of the most common mistakes I see in startups is making decisions that lose sight of the context , including the past, present, and future. Sooner or later everybody in a startup knows what everyone else is getting paid.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? Its equivalent toasking how to make a startup succeed—if you avoid every cause offailure, you succeed—and thats too big a question to answer onthe fly. 1 ] In a sense theres just one mistake that kills startups: not makingsomething users want. Get funded by Y Combinator.

Startup 108

Startup Software Review Hiring Detroit 108

Reid Hoffman

JANUARY 19, 2021

True, many boards are dysfunctional, but when you build a great startup board, it will be a powerful tool that can help the CEO make the company successful. This essay, which is based on Part 1 of a two-part episode of the Greymatter Podcast, will cover the fundamentals of building great startup boards.

Startup 36

Startup Cofounder Advertising Hiring 36

Lightspeed Venture Partners

OCTOBER 7, 2012

That’s why most entrepreneurs do not make a specific ask on valuation, but wait to hear offers from investors. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. The last company was a bit of a puzzler.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Hearpreneur

AUGUST 5, 2020

The global automakers and suppliers will be adapting their business models accordingly, forming new partnerships and investing in new technologies. These businesses have had to completely reimagine their business models and will likely be pivoting for a long time to come. parents and students) remain engaged.

Technical Review 155

Technical Review Software Review Entrepreneur China 155

www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? You need three things to create a successful startup: to start withgood people, to make something customers actually want, and to spendas little money as possible. Most startups that fail do it becausethey fail at one of these. Most startups that fail do it becausethey fail at one of these.

Startup 105

Startup Cofounder Software Stock 105

Steve Blank

SEPTEMBER 14, 2009

Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. The world of building profitable startups as the primary goal of Venture Capital would end in 1995.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

Transformify

JULY 23, 2018

When speaking of startups’ funding, most founders first consider VC or Angel Investor funding. Somehow, it is perceived in the startup world that this is the way to go. EUR 3 billion are available to fund a maximum of 7,500 startups by 2020! The startups are not selling equity or issuing new shares. Definitely.

Intellectual Property 66

Intellectual Property Angel Investor Dilution Startup 66

Startup Professionals Musings

AUGUST 1, 2016

That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

betashop.com

OCTOBER 8, 2012

This past week while I was in Tokyo for meetings with potential partners for Fab, I was invited to participate in a panel discussion on startups. All the rest is noise. But, you can iterate and iterate on features, but you cannot iterate your way to a business model. There’s no time to dicker around at a startup.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Steve Blank

MAY 13, 2010

Consultants can help startups leverage their limited resources. But startups can shoot themselves in the foot when founders use consultants at the wrong time or in the wrong way. A friend of mine asked me to chat with a startup he’d invested in. The rest of his story was mostly a blur. Here’s why.

Founder 199

Founder Cofounder Business Model Customer Development 199

Up and Running

OCTOBER 3, 2018

So be sure to write it last, after you have already thought through the other sections of your business plan. Investors will read your executive summary and decide whether or not it’s worth their time to read the rest of the plan. Financial Summary: Explain your business model, startup costs, revenues, and liabilities to the company.

El Paso 61

El Paso Business Plan Technical Review Forecast 61

This is going to be BIG.

NOVEMBER 7, 2011

"Every investor and entrepreneur knows there is something scary about the current startup economy. At least nine out of ten high-quality angel-funded startups face an unnecessary death, because there is no Series A money to help them survive critical expansion. Valuations. Are their valuations justified?

Angel Investor 104

Angel Investor Valuation Startup Revenue 104

Lightspeed Venture Partners

SEPTEMBER 23, 2012

post money valuation. Mark Cuban offered $300k for 33% of the company, implying a $900k post money valuation. implying a $600k post money valuation. The company ended up negotiating with Cuban and settled on $300k for 30% of the company, or a $1M post money valuation. post money valuation and a $1.35M pre money valuation.

Pre-Money Valuation 163

Pre-Money Valuation Post-Money Valuation Valuation Dilution 163

Austin Startup

MAY 3, 2017

The University of Texas at Austin’s Longhorn Startup Demo Day AND Texas Venture Labs are underway and given the incredible and increasing impact Texas is having on entrepreneurship and innovation, I thought we should talk about cattle. The Unicorn Startup The Unicorn is a mythical beast. What we have is a company changing the world.

Texas 48

Texas Startup Silicon Valley Bootstrapping 48

OnlyOnce

JULY 26, 2018

Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. On the other side, what’s an example of a “good” loss?

Cap Table 61

Cap Table Lead Investor Valuation Reputation 61

Startup Professionals Musings

AUGUST 13, 2012

Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Convince investors that your team is experienced in starting a new business, and have great expertise in the selected business domain.

Business Plan 283

Business Plan Sweat Equity Exit Strategy Intellectual Property 283

OnlyOnce

JULY 26, 2018

Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. On the other side, what’s an example of a “good” loss?

Cap Table 48

Cap Table Lead Investor Valuation Reputation 48

This is going to be BIG.

DECEMBER 26, 2011

There are a lot of things I love about my Android phone--like the easy integration into the rest of my Google life. What's the business model? I hope they can get there, because it would be a major boon to the rest of the market for them to justify their lofty valuations and hopefully the valuations of exits and IPOs.

Technology 116

Technology Valuation Community Restful 116

Lightspeed Venture Partners

OCTOBER 1, 2012

pre money valuation). Cuban has interest in a gluten free diet, and claimed that he liked the company, but his only concern was valuation. Since an early exit caps the upside potential, getting in at the right, low valuation is necessary to be able to make a high multiple on your investment. This would never happen in real life.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

David Teten

AUGUST 6, 2015

Jake Perlman-Garr of Datavore points out that this helps facilitate both the auditing and tweaking of forecasts, and also helps a potential investor understand better what the entrepreneur thinks are the important drivers of their business. 11) Separate out your model output. once a model has been finalized.

Balance Sheet 60

Balance Sheet Software Review Forecast Acquisition 60

Startup Professionals Musings

MAY 13, 2011

Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it assumes at least 100M users and $50M investment. Convince investors that your team is experienced in starting a new business, and have great expertise in the selected business domain.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Up and Running

MARCH 29, 2017

million for the SaaS startup I founded because sometimes we see success coming out of the blue, when really that person benefited from a broad network of support. At the same time, I was starting to realize that both the elegance of cloud-based software and the business models it enabled were what really got me excited.

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60

reidhoffman.org

NOVEMBER 12, 2013

It has many stylistic errors — and a few substantive ones, too — that I would now change having learned more, but I realized that it still provides useful insights for entrepreneurs and startup participants outside of the Greylock network, particularly across three areas of interest: how entrepreneurs should approach the pitch process.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Reid Hoffman

JANUARY 26, 2021

Last week, we explored the topic of startup boards of directors. The primary goal of this conversation was to explain how and why a great startup board can be a powerful tool to help the CEO make the company successful. One of the things a financing round brings is an opportunity to strengthen the startup’s overall network.

Startup 36

Startup Equity Early Stage Green 36

Growthink Blog

JANUARY 24, 2018

What can your business easily learn from them to perform far better in 2018 than ever before? Well, here are 11 quick business wisdoms from these 11 great companies: #11. Elon Musk’s electric car maker saw its valuation grow to more than $60 billion last year, greater than that of General Motors in spite of selling 90% less cars!

Artificial Inteligence 48

Artificial Inteligence San Francisco Valuation Reputation 48

Hearpreneur

JANUARY 29, 2017

I’m a big believer of lean startup. It will gratify some people and astonish the rest. She didn’t let rules or other’s fear become instilled into her work ethic; Blakley’s strength lies in the acceptance of endless possibilities as long as you’re willing to work for it and make it happen, so long as you stand out from the rest.

Entrepreneur 48

Entrepreneur LLC Cofounder Montana 48

The Next Web

JANUARY 15, 2014

There are five strategies, or patterns, that set apart leading internet startups – or the billion-dollar club companies – from all the rest. I’ve studied a host of startup ventures in quest of the patterns behind their success. This post originally appeared on Geektime. Asset #2: Cashing the most.

Web 141

Web Tampa Non-Compete Search 141

Lightspeed Venture Partners

SEPTEMBER 16, 2012

This founder isn’t ready to be a startup CEO. The founders clearly believed in the upside of the company and that is why they were willing to take a lower valuation but wanted minimal dilution. He was clearly trying to get the Sharks to collude to avoid driving valuation up. They should listen to advisors, of course.

Silicon Valley 167

Silicon Valley Salary Dilution Indiana 167

Startup Professionals Musings

APRIL 22, 2010

Explain the business model. Many people seem to use the social network advertising model for revenue, but forget it requires at least 100M users and $50M investment. Convince investors that your team is experienced in starting a new business, and have great expertise in the selected business domain.

Business Plan 186

Business Plan Exit Strategy Sweat Equity Intellectual Property 186

Software By Rob

AUGUST 18, 2010

Join nearly 6,000 startup entrepreneurs by subscribing to my RSS feed. August 18th, 2010 | Micropreneurship , Startups Building your startup? Follow me Startups for the Rest of Us. If youre trying to grow your startup youve come to the right place. Check out my book Like this post? 2 Paul Cowan on 08.18.10

Software Review 78

Software Review Software Revenue Cofounder 78

Up and Running

DECEMBER 9, 2014

I have been involved in startups since I graduated from college in 1996. My background with entrepreneurialism is this is my sixth startup. One, I’m an entrepreneur or in the startup stage of a business. Two, I’m a small business owner or manager. This is really an exciting panel to be a part of.

Small Business 95

Small Business Finance Forecast Metrics 95