Both Sides of the Table

DECEMBER 27, 2011

They have have raised $2-3 million, built a product that has some amount of market traction and got to annualized revenues of around $1 million. If you had huge customer growth but just didn’t focus on revenue that’s a different story. Is it one product line or multiple? If you don’t, somebody else WILL!”

Startup 418

Startup Revenue Technical Review Flash 418

Up and Running

APRIL 18, 2014

With my third business, I didn’t even try to be original—I purchased a custom framing franchise and piggybacked to success on someone else’s name. David sold his recording equipment for $50,000 and they borrowed the rest of their seed money from a bank. My next venture didn’t fare much better. David’s advice. Rob’s advice.

Detroit 156

Detroit Technical Review Cofounder North America 156

Version One Ventures

APRIL 30, 2013

This means the overall costs of launching a hardware product are coming down considerably, yet hardware is still costlier (and thus riskier) than software. Instead of taking a year to develop and launch one product, it might be advantageous to run through four development cycles in smaller batches. Related articles.

Venture Capital 128

Venture Capital Software Review Incubator Startup 128

Steve Blank

APRIL 8, 2010

When were done we followed your advice and got out of the building and started talking to potential users and customers.” He replied, “Well the customers are not acting like we predicted in our plan! We thought we’d take our plan and go raise seed money. We can’t raise money knowing our plan is wrong.”. Here’s why.

Business Model 331

Business Model Business Plan Customer Cap Table 331

Both Sides of the Table

JANUARY 5, 2010

They often make great team members such as head of products, CTO, head of sales, CFO, etc. And we’re lucky because they deliver many of the great products, services and content that we consume in our lives every day. I want our associate to have empathy for the customers we serve — our portfolio companies. Not my problem.

Entrepreneur 293

Entrepreneur CTO Hire South America Salary 293

YoungUpstarts

OCTOBER 28, 2015

Startups need to understand how to manage the seed money they receive from investors and VCs. With direct customers, personally identifiable data is of most concern. Law firms that focus on emerging technology companies understand their legal issues from multiple perspectives and offer excellent advice. Domain Squatting.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

Version One Ventures

DECEMBER 14, 2016

At the same time, seed money is still abundant due to the proliferation of micro VC over the past few years. First, there was the Industrial Revolution, followed by the Age of Steam and Railways; Steel & Heavy Engineering; Oil, Autos & Mass Production; and now the Information and Communications Technology Revolution.

Technical Review 60

Technical Review Early Stage Portfolio Valuation 60

ReadWriteStart

SEPTEMBER 17, 2021

If you’re running a business without products currently deployed, it can be difficult to negotiate with investors in good faith. How can either of you confidently give a valuation of a business that doesn’t make money? Usually, a product they can see, use, or touch will not be enough. More Leverage.

Startup 130

Startup Revenue Cofounder Angel Investor 130

Steve Blank

JUNE 11, 2009

Passionate – is the company/product/customers the most important thing in your life? However, you will be dealing with almost daily change, (new customer feedback/insights from a Customer Development process and technical roadblocks ,) as the company searches for a repeatable and scalable business model.

Cofounder 227

Cofounder Founder Silicon Valley Technical Cofounder 227

Up and Running

MAY 12, 2015

Drawing on advice from our own Tim Berry, founder of Palo Alto Software and Josh Cochrane, our VP of Product Development, I’ve broken down a few of the different options for entrepreneurs looking for feedback on their pitch. They ended up with a nice pitch, and approximately $300K in seed money.”. Eric agrees with Josh. “In

Angel Investor 60

Angel Investor Software Review Technical Cofounder Due Diligence 60

Both Sides of the Table

MAY 13, 2013

And they might give a premium if the team has been around a longer period of time, has built some hard-to-build proprietary technology or has some customer traction. Let’s assume $2 million in seed money. It says if you want to make “real” money - quit. Get some famous angel or seed money.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Both Sides of the Table

JUNE 17, 2017

I want to understand how many units the company is selling, whether this is increasing over time and how well they’re doing at retaining the customers that they do acquire. Is it one product line or multiple? Do 20% of the customers make 80% of the revenue or do the top 3 customers represent 80% of the revenue.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Rob Go

NOVEMBER 15, 2016

For most companies, this means top-line revenue, but in some cases it’s more about numbers of active users or number of customers. You might do unscalable, hacky things to get customers. Option 2 is to focus on product (and proof points more broadly). The product and proof strategy might also fail at the series A.

Product 28

Product Seed Stage Seed Money Metrics 28

ReadWriteStart

SEPTEMBER 17, 2021

If you’re running a business without products currently deployed, it can be difficult to negotiate with investors in good faith. How can either of you confidently give a valuation of a business that doesn’t make money? Usually, a product they can see, use, or touch will not be enough. More Leverage.

Startup 78

Startup Revenue Cofounder Angel Investor 78

Up and Running

MAY 30, 2018

My first company, Digital-Tutors , grew from a startup in my living room with $54 of my own seed money into a multi-million-dollar business with customers around the world. I was proud of the fact that we never used any outside investment money to grow the company. The day’s productivity was shot.

Startup 107

Startup Seed Money Employee Conversion 107

Startup Professionals Musings

JUNE 2, 2011

But when your only capital is your hard-earned seed money, every penny that goes out will be scrutinized painfully. If you will be making a product to sell, be sure the cost of materials is minimal and beyond that it costs only your labor. Ask satisfied customers to spread the word on yelp, tripadvisor, Angieslist, etc.,

Sweat Equity 231

Sweat Equity Startup Angel Investor Seed Money 231

crowdSPRING Blog

APRIL 23, 2018

Many successful products and services share the origin story of “I needed something like this, so I built it.”. A challenge that some entrepreneurs don’t consider is that innovative, never-before-seen products and services often stand alone. They can’t rely on existing markets or customer awareness to help generate interest.

Entrepreneur 69

Entrepreneur Startup Seattle Social Media 69

cdixon.org

SEPTEMBER 17, 2011

You’ll learn about competitive products that exist or are being built. You’ll gauge people’s excitement level for the product and for various features. You are building awareness around your product and, presumably, persuading others of its value. link] What’s the right amount of seed money to raise?

Stealth 68

Stealth Startup NDA Cofounder 68

Hippoland

APRIL 24, 2016

Company A: -Raised a seed round of $500k -Now raising another seed round of $2.5m to expand the business Company B: -Raised a seed round of $2m -Now raising another seed round of $1m to expand the business Should both companies successfully raise, they would’ve raised the same total amount of seed money - $3m.

Seed Money 48

Seed Money Bootstrapping B2B Acquisition 48

Austin Startup

SEPTEMBER 17, 2017

There are about 32 million left-handers in the US, you have a special product for them, and surely you can get just 5% of that market and have 1.6 million customers. Maybe a desired distribution channel was more costly or less productive than expected. If you know your customers, you know what’s repeatable and what may not be.

Valuation 48

Valuation Forecast Seed Money Business Model 48

Both Sides of the Table

APRIL 3, 2010

Chris Dixon provided some commentary on Twitter that he believes I missed “the most important point about fund size.&# He’s specifically referring to his point of view that entrepreneurs shouldn’t take seed money from “big VC’s&# (he defines them as > $100 million).

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Hearpreneur

DECEMBER 9, 2018

We’ve also improved productivity through some helpful tips to our employees, and become a more streamlined and efficient small business overall. Thanks to Andrew Schrage, Money Crashers ! #3- Photo Credit: Andrew Schrage. 3- A number of things. We started talking, seriously about the idea. Thanks to Robert Sollars. #9-Increase

South Korea 58

South Korea Entrepreneur Portugal Social Media 58

The Equity Kicker

AUGUST 20, 2014

With no team and no technical expertise Matt was planning to find a team and build out some product before starting to raise some seed money. Talking to customers doesn’t seem very difficult but learning how to intuitively ask open questions, deviate from a script and synthesise the information gathered takes practice.

Cofounder 95

Cofounder Founder Technical Cofounder Technical Review 95

Rob Go

MARCH 20, 2013

Even Mailbox (which just got acquired by DropBox for likely a big number) I’m sure faced a trough of sorry when they shifted resources away from their original product (behind which their raised their seed round) and pursued what could have been yet another email client. The trough I’m sure happens even for every successful companies.

Bootstrapping 46

Bootstrapping Finance Dividend Vesting 46

Startup Lessons Learned

MAY 31, 2019

Many very successful, non-technology companies have also been products of venture capital, including Home Depot, Starbucks, and Staples. First, the introduction of seed money as an institutional form of capital. Morgan credit card business to acquire tons of Square customers at a very low cost.

Lean 108

Lean Venture Capital Conversion IPO 108

Rob Go

MARCH 10, 2012

There may be little swings one way or another when markets are stronger or weaker, but for the most part, our valuation band is pretty tight (controlling for company characteristics like product maturity, quality of team, etc). In some seed rounds, we invest mainly with seed investors and angels. Syndicate diversification.

Seed Stage 49

Seed Stage Syndicate Syndication Marketing 49

www.paulgraham.com

OCTOBER 23, 2010

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. The woman in charge of sales was so tenacious that I used to feelsorry for potential customers on the phone with her. This doesnt work well. Thats nonsense.

Startup 105

Startup Cofounder Software Stock 105

Both Sides of the Table

SEPTEMBER 2, 2009

I raised $500k in seed money to start the company. The company did well in 2006 as we delivered a phenomenal product that got much industry acclaim at conferences and with initial customers. When we moved to Palo Alto we rented a place. year old boy and another one due in 1 months. Many term sheets ensued.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The product gets a lot better. Here’s the scenario.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Mike Michalowicz

MARCH 24, 2013

They have to develop strategies and build relationships to help them get the best sources for their products and provide the best chance of generating positive word of mouth publicity. In order to sell, you need to communicate a certain level of confidence in yourself and your product. No excuses. Kids are social media mavens.

Entrepreneur 167

Entrepreneur Seed Money Social Media Sales 167

techcrunch.com

OCTOBER 23, 2010

So for this first post, here’s the best advice I can give you: join an awesome founding team and get your product out the door ASAP. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door.

Technical Review 84

Technical Review Cofounder Technical Cofounder Software Review 84

Hippoland

JANUARY 23, 2018

It will be hard to raise a pre-seed round through traditional methods If you are raising money through traditional methods (such as with angels / micro VCs / VCs) via a convertible note or convertible security or equity deal, it will be a lot harder to raise pre-seed money in 2018. Cons: Slow.

Early Stage 48

Early Stage Convertible Security Seed Stage SEC 48

Hippoland

JANUARY 23, 2018

It will be hard to raise a pre-seed round through traditional methods If you are raising money through traditional methods (such as with angels / micro VCs / VCs) via a convertible note or convertible security or equity deal, it will be a lot harder to raise pre-seed money in 2018. Cons: Slow.

Early Stage 48

Early Stage Convertible Security Seed Stage SEC 48

Growthink Blog

DECEMBER 25, 2012

For example, while doggy dental products could be a wonderful niche (as almost any dog owner can attest) you could narrow your focus down to a certain type of dog (such as German Shepherds). If you are looking only at one community or small geographic region then you may well doom your product or service to failure.

Seed Money 112

Seed Money Campaign Small Business Global 112

www.paulgraham.com

APRIL 28, 2010

It wasnt because they werent accredited investors that I didntask my parents for seed money, though. When we were starting Viaweb,I didnt know about the concept of an accredited investor, anddidnt stop to think about the value of investors connections.The reason I didnt take money from my parents was that I didntwant them to lose it.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

crowdSPRING Blog

FEBRUARY 16, 2016

William Bygrave, an entrepreneurship professor at Babson College, cautioned in an article for The Wall Street Journal: What we really don’t want to do is literally spend a year or more essentially writing a business plan without knowing we have actual customers. Myth #2: You need a lot of money to start. So are the ants.

Washington 48

Washington Incubator Cofounder Angel Investor 48

www.paulgraham.com

AUGUST 1, 2008

In essense, let the market design the product. Series A rounds, where you raise a million dollars or more, will be custom deals for the forseeable future. He was a precise sort of guy, so hed measured their productivity before and after. He found they were one thirteenth as productive after the acquisition.

Web 54

Web Startup Silicon Valley Technical Review 54