Gust

JANUARY 4, 2012

The only exceptions that come to mind are if the IP seems likely to provoke costly litigation, costs too much to develop, or taints the startup with some kind of ties to other ventures or people that give it a checkered past. If you do manage to threaten them, they’re more likely to buy you than sue you.

Intellectual Property 143

Intellectual Property IP Startup United States 143

Gust

DECEMBER 7, 2014

Managing investors is a distraction from your core business. The best partners are ones who share costs and risks. With no investors, you will work harder to find vendors who will absorb costs and associated risks for a potentially bigger return later. Anyone who gives you money is likely to be a tough boss.

Bootstrapping 191

Bootstrapping Entrepreneur Startup Burn Rate 191

Gust

APRIL 9, 2014

This typically happens when the company is facing tough times, and the value of management’s original options has greatly decreased to the point that the equity no longer serves as an incentive for staying with the company.

Dilution 150

Dilution Equity Vesting Stock Options 150

Gust

NOVEMBER 18, 2012

The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary. Assign probabilities to active customer sales efforts, just as sales managers do in quantifying a salesman’s forecast. This one doesn’t help NewCo just yet.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

DECEMBER 22, 2011

It’s possible to have a company with literally millions of customers (users) that employs only a handful of people, working in a small rented office, with hardware and software costing in the tens of thousands rather than millions of dollars. Most of our early-stage startup clients fit this description.

Intellectual Property 149

Intellectual Property Technical Review Software Review IP 149

Gust

DECEMBER 29, 2013

In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. Carrying a non-performing employee probably triples the costs, since you are paying two people to do the job, and at least one other is de-motivated by the inequity. Let your accountants manage the expenses.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

AUGUST 22, 2012

” There is no law, other than the word of the manager on duty — who decrees that we could get in with the camera if we paid some ludicrous amount of money to procure a permit on the spot. Perhaps most importantly, IT and Internet business are simply a breed of their own.

Technical Review 172

Technical Review Egypt Morocco Russia 172

Gust

AUGUST 10, 2014

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Financial projections for investors should always show an annual cost of goods sold and gross margins line, as well as revenue.

Liquidity Event 176

Liquidity Event Equity Venture Capital Merger 176

Gust

NOVEMBER 3, 2013

But why not learn as well from the mistakes of others, without suffering their cost, time, and pain? Even a non-profit has to generate revenue (or donations) to offset operating costs. Having too much cash, not managed wisely, can be just as devastating as too little cash. Even viral marketing costs real money and time.

Intellectual Property 183

Intellectual Property Startup Viral Early Stage 183

Gust

DECEMBER 24, 2012

New product startups rightfully begin with a heads-down focus on creating the ultimate product – whether it’s a new technology, a new look and ease of use, or a new low-cost delivery approach. Quantify the value and cost of acquiring every new customer. Image via Facebook. Personalize your offering to each customer or group.

Customer 166

Customer Startup Retention Differentiation 166

Gust

MAY 10, 2014

Since the average investment amount per angel per company is about $35,000, you can calculate that using the same 2-3% management fee metric as a venture fund, the opportunity cost of the angel’s time for all those deals would be somewhere between $700 and $10,000 per year.

Angel Investor 132

Angel Investor Accredited Investor Limited Partner Portfolio 132

Gust

JUNE 15, 2014

I select vendors carefully, and manage them well, to keep my costs down.”. “I couldn’t do this job without the full support of my team.”. Exceeding customer expectations is my competitive advantage.”. “I With limited time, I’ve learned to focus only on key issues, and delegate the rest.”. “I

Entrepreneur 174

Entrepreneur Bootstrapping Employee Restful 174

Gust

JULY 29, 2012

Even though the cost of commercial office space is down, you still need to sign long-term contracts, make payments up front, outfit the space, and staff it. Managing employees is a whole separate discipline, and most true entrepreneurs aren’t very good at it anyway. Don’t hire any employees. Consultants don’t need any inventory.

Bandwidth 155

Bandwidth Bootstrapping Equity Startup 155

Gust

DECEMBER 12, 2011

I have seen startups implode when principals were pitted against each other on mutually exclusive objectives, like adding more technology versus keeping costs down. Quantify time and cost goals early, get agreement from all, and measure results regularly to verify alignment. Manage priorities. Every process needs a system.

Cost 114

Cost Business Plan Entrepreneur Startup 114

Gust

FEBRUARY 2, 2014

If you plan to become an entrepreneur, and already have business experience or an undergraduate business degree, skip the two-year delay and cost of the MBA. If you are still in school, and contemplating an MBA before stepping into the entrepreneurial world, go for it.

Entrepreneur 175

Entrepreneur Salary .Net Revenue 175

Gust

OCTOBER 31, 2011

If your business offers a service, like marketing or management consulting, you are the product. Being the low-cost commodity level service provider is not a recipe for success. You don’t have tangible product items which can be compared for quality and cost in the value proposition. Make sure your service is innovative.

Angel Investor 143

Angel Investor Venture Capital Partner Networking 143

Gust

DECEMBER 9, 2012

It also means that it’s time to stop micro-managing, hire some of the right people, and start giving up some control. Scaling models charge by the transaction, or subscriptions, or have digital assets with no cost to reproduce. Scale the business. Switch to a mindset of working “on” your business, rather than “in” your business.

Elevator Pitch 163

Elevator Pitch Startup Bootstrapping Entrepreneur 163

Gust

JANUARY 22, 2014

It is used by hundreds of thousands of companies in 195 countries to organize all of their investor relations material; it is used by over a thousand angel investor networks, venture capital funds and startup accelerators to manage their deal flow and collaboration; and it is used by over 50,000 individual accredited angel investors in 75 countries (..)

Angel Investor 150

Angel Investor Angel Groups Accredited Investor Early Stage 150

Gust

OCTOBER 6, 2011

Second – timely, cost-effective customer acquisition is a matter of life-or-death to most startups. There’s only one catch though: it takes a complete marketer to make that kind of contribution, and the skill set of a complete marketer goes way beyond, let’s say, managing a PPC campaign. It’s almost counter-intuitive.

Acquisition 87

Acquisition Marketing CPA PPC 87

Gust

DECEMBER 23, 2011

Randall Munroe has managed to slowly create a real enterprise out of a free webcomic. Similarly, start calling VCs if your customer acquisition costs can only be recaptured over a substantial period of time. Let’s start at one extreme end of the spectrum, with my favorite startup: XKCD.

Intellectual Property 127

Intellectual Property Balance Sheet Dilution Bootstrapping 127

Gust

JANUARY 22, 2014

It is used by hundreds of thousands of companies in 195 countries to organize all of their investor relations material; it is used by over a thousand angel investor networks, venture capital funds and startup accelerators to manage their deal flow and collaboration; and it is used by over 50,000 individual accredited angel investors in 75 countries (..)

Angel Investor 89

Angel Investor Angel Groups Accredited Investor Early Stage 89

Gust

NOVEMBER 29, 2011

I always look for marketing expenses as a percent of sales, and headcount and personnel costs, and compensation for management. In those rare cases where they can be possible, I say that if a business is that profitable, spend more on marketing and grow it faster. Reasonable estimates on these points add to credibility.

Hockey Stick 70

Hockey Stick Forecast Early Stage Finance 70

Gust

DECEMBER 8, 2011

Take any steps needed to qualify Newco to conduct the business it plans to conduct wherever it’s located (for example, a filing made in California qualifying a Delaware corporation to do business there if the management team is located in San Francisco).

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Gust

AUGUST 8, 2012

Never have I worked so hard to get a business to take such a small amount of money for something so trivial to them (assuming near-zero variable cost) yet valuable to me. I’m no UI/UX designer or product manager, but I do work with entrepreneurs daily. All of the above isn’t mere venting.

Customer 143

Customer Southern California San Jose Marketing 143

Gust

SEPTEMBER 13, 2011

The “system” as it existed at the time broke down, with every point of failure costing innocent lives. Yet when it comes to risk management of user communities – content, community or commerce – failure to be looking around the curve ahead can result in pretty ugly crashes. Empower users to spot and report issues of all kinds.

Startup 98

Startup Silicon Valley Reputation Community 98

Gust

SEPTEMBER 23, 2012

Traditional risk management focuses only on bad risks, and seeks to contain losses. Use “coopetition” for cost sharing, economies of scale, and open access to new markets. The challenge with all risks is that they must be proactive, measured, and managed. That way of thinking is simplistic and wrong. Partner with a competitor.

Forecast 188

Forecast Viral Social Network Business Model 188