Gust

JUNE 23, 2014

The biggest excuse most startup founders mention is too much to do building a product, mapping strategy, investors, etc. Most of the people you would want as co-founders are now cruising the relevant blogs for ideas and partners. Writing a blog is all about communication, and that’s your number one job as founder of a new startup.

Startup 174

Startup Cofounder Social Media SEO 174

Gust

FEBRUARY 2, 2014

With a little research I found a few notable names in relatively recent businesses, although each of these actually started with some big-company experience: Fred Smith, chairman and founder, Federal Express. The company now has more than 160,000 employees and revenues of $44 billion. He built an overnight competitor to the U.S.

Entrepreneur 175

Entrepreneur .Net Salary Revenue 175

Gust

JANUARY 5, 2014

This rather crude expression weighs heavily on the mind of all good startup founders, no matter how confident they appear. This whole process is particularly worrisome to many startup founders, since their expertise and background more likely technology than sales. Your revenue model has to make sense.

Business Model 171

Business Model Sales Customer Distribution 171

Gust

DECEMBER 14, 2014

No startup founder or leader can just order these changes to happen, because it isn’t that easy to get other people to change their ways. For example, more customer leads are predictive of more sales revenue later. The team needs to see the process practiced by the startup founder, as well as preached regularly.

Entrepreneur 189

Entrepreneur Founder Revenue Startup 189

Gust

JUNE 22, 2014

The biggest excuse most startup founders mention is too much to do building a product, mapping strategy, investors, etc. Most of the people you would want as co-founders are now cruising the relevant blogs for ideas and partners. Writing a blog is all about communication, and that’s your number one job as founder of a new startup.

Startup 125

Startup Cofounder Social Media SEO 125

Gust

NOVEMBER 18, 2012

Two founders have spent $200K of personal and family funds over a one year period to start the company, get a prototype site up and running, and have already generated some “buzz” in the Internet community. On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

DECEMBER 31, 2012

In addition to being startup founders, like Richard Branson , founder of more than 400 companies and still going strong, there are several other key roles that I see Boomers taking more often these days to drive successful startups: Advisory Board. Customer service.

Advisory Board 177

Advisory Board Angel Investor Startup Equity 177

Gust

JULY 8, 2012

Seed-stage means promising companies that don’t yet have a revenue stream, and may not yet have a proof of concept. Since the economic downturn started, neither angels nor VCs have given much attention to startups without a product and a revenue stream. For VCs, early-stage means customer revenue is less than $10M. Super Angels.

Early Stage 177

Early Stage Finance Seed Stage Entrepreneur 177

Gust

JULY 1, 2012

These people are highly focused on investment areas they know, which have a large opportunity for growth, revenue projection of $20M or more in five years, and a high return that can be realized via an exit within five years. First-time founders will find that most angels turn into mirages.

Angel Groups 143

Angel Groups Angel Investor Early Stage Startup 143

Gust

MARCH 9, 2014

When questioned, founders usually mention word-of-mouth, viral marketing, and a top quality product. These founders need a reality check on what recognized brand names have spent to reach that threshold, and how long it is likely to take.

Marketing 146

Marketing SEM Viral Social Media 146

Gust

AUGUST 7, 2012

Problems with the founders. For example, I saw a founder tell investors, during a pitch session, that some investors screwed him and his previous partners were dishonest. Founders making no money at all is a problem for many investors, because — while the bravado is impressive — it isn’t realistic over the long term.

Business Plan 172

Business Plan Sweat Equity Salary Founder 172

Gust

JULY 6, 2014

In fact, most startup founders pay themselves no salary for the first year or two, and investor money is hard to find. I tell new entrepreneurs not to quit their “day job” until they have real revenue. Remember, the grass always look greener on the other side of the fence. More money in the short term is unlikely as an entrepreneur.

Startup 183

Startup Salary Employee Entrepreneur 183

Gust

OCTOBER 26, 2014

Most startup founders already do this, rather than take a salary, to improve their offering. In most cases there is a direct correlation between the quality of your decisions and the size of your revenue stream. Don’t justify over-spending initially with “long-run” thinking. Reinvest gross profit.

Bootstrapping 176

Bootstrapping Startup Merger Salary 176

Gust

DECEMBER 8, 2011

Likewise, founders can benefit from understanding basic characteristics of the overall legal structure, formation and governance documents, rights and responsibilities of team members, etc. Determine who will serve on the Board of Directors and in executive officer positions (usually founders). Newco, Inc.”)

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Gust

JULY 10, 2012

Narrow the market, narrow the business offering, and shorten the time from zero to revenue. Maybe you weren’t the founder, but you were there early and stayed long enough to get the idea. Scale down and focus: So don’t be the next Facebook, at least not immediately. Lower your valuation. Partner up.

Bootstrapping 165

Bootstrapping Valuation Restful Sales 165

Gust

DECEMBER 16, 2012

If the founders are not experienced, find a couple of advisors from the business sector to fill the gap. As a founder, you may think that everyone understands your vision and plan from your passion and words, but it doesn’t work that way. Remember the old adage that “investors fund people, not ideas.”

Angel Investor 179

Angel Investor Intellectual Property Elevator Pitch Angel Groups 179

Gust

DECEMBER 7, 2014

At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. Investors like to replace Founders who don’t seem to be moving fast enough. You will squeeze harder on your own dollars than investor dollars.

Bootstrapping 191

Bootstrapping Entrepreneur Startup Burn Rate 191

Gust

JUNE 10, 2012

Even for low-tech startups, the scope of information available on the Internet, and its global reach, has had a similar financial impact on the many other challenges facing every startup founder. Founders now routinely use their home to operate their startup until they are well into the revenue phase. Facilities and staff.

Cost 139

Cost Burn Rate SEM Startup 139

Gust

NOVEMBER 25, 2012

Many founders envision their solution as a platform for future products, but don’t have a single killer application just yet. This refers to the monetization or revenue model. This requires repositioning, or a completely new product, to find a problem worth solving. Platform pivot. Most customers buy solutions, not platforms.

Silicon Valley 187

Silicon Valley Architecture Startup Channel 187

Gust

JULY 16, 2014

So it would seem on the surface that I contributed $100,000 and you as the founder contributed $900,000, so we should therefore both just get a proportionate number of shares of the same kind of stock, right? That certainly makes sense, except for one thing: there is a substantial difference in the form of the two contributions.

Stock 167

Stock Startup Matching Revenue 167

Gust

SEPTEMBER 17, 2014

Revenue multiple? I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. But most VCs don’t bother so many convertible note founders get screwed and never know it until they sell their companies. How will you price the next round? Your A round? Him: On metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Gust

NOVEMBER 4, 2011

For more page-turning corporate drama, including the feud between Intermix co-founders and UCLA college buddies Brett Brewer and Brad Greenspan, Nasdaq delisting, proxy contest and lawsuits by Greenspan after he was fired as CEO, see Stealing MySpace by WSJ reporter Julia Angwin. MySpace became its own company, MySpace, Inc., of MySpace, Inc.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

SEPTEMBER 5, 2012

” Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum” Taku , a partner at my “alma mater” law firm Wilson Sonsini Goodrich & Rosati , created quite a stir this past week by announcing a new set of template deal documents dubbed “ Convertible Equity.”

Finance 134

Finance Convertible Security Equity Seed Stage 134

Gust

OCTOBER 12, 2011

It’s worth mentioning two key attributes of convertible note venture deals here: The debt is almost always unsecured , meaning there are no underlying assets to be seized as collateral in the event of default (unlike, say, a mortgage or car loan), and is not personally guaranteed by founders or shareholders.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107