Startup Professionals Musings

MARCH 23, 2011

I’ll try to offer some guidelines to address these issues, but I generally recommend you keep the day job until your new company is producing real revenue. Otherwise, I suggest that founders be up-front with their employers, with an honest commitment that the “side” work on the potential startup will not jeopardize committed results.

Founder 233

Founder Startup Cofounder Angel Investor 233

Startup Professionals Musings

NOVEMBER 28, 2020

But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. Excellent detailed resources are everywhere, including a classic book, “ The Startup Checklist ,” by serial entrepreneur and founder of the New York Angels, David S. Incorporating a business entity early through online services.

Intellectual Property 404

Intellectual Property Startup Angel Groups Social Media 404

Startup Professionals Musings

JANUARY 28, 2015

One 11-year study of over 200 companies, detailed in “ Corporate Culture and Performance ,” found that those working on their culture improved revenue by 516%, and increased net income by 755%. Building an ethical business is more than just compliance and meeting legal requirements, and it has big paybacks.

Founder 120

Founder Software Review Offshore Startup 120

Startup Professionals Musings

JUNE 26, 2020

All startups, including non-profits, need revenue to thrive, such as such as from subscriptions, retail, online, licensing, or services. They want to see revenue to share in the return. Here I recommend a 5-year projection of revenues, expenses, and funding requirements. Provide specifics on the customer business model.

Business Plan 423

Business Plan Product Intellectual Property Elevator Pitch 423

Startup Professionals Musings

JANUARY 18, 2020

Supportive co-founder and executive positions. Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold. They want to share your satisfaction in success, maybe as a reward for their own mistakes and learning earlier in life in their own businesses.

Advisory Board 312

Advisory Board Startup Dividend Angel Investor 312

Startup Professionals Musings

DECEMBER 5, 2021

The founder explains that the product or service is so “buzz-worthy” that the merits will spread rapidly through word-of-mouth only, meaning people loving it and recommending it to their friends. That’s a double death wish.

Viral 348

Viral Marketing SEM Campaign 348

Startup Professionals Musings

APRIL 14, 2021

Blake Mycoskie, founder of TOMS shoes, set a higher purpose of donating a pair of shoes to the needy for every pair sold, and found that the return was far greater than the cost of donated shoes. Yet don’t assume that any of these will override the basic need of every business to be self-sustaining via revenue to meet expenses over time.

Customer 432

Customer Social Media Dividend Technical Review 432

Startup Professionals Musings

AUGUST 31, 2014

The revenue model you select is basically the implementation of your business strategy, and the key to attaining your financial objectives. So what are some of the most common revenue models being used by startups today? It definitely requires founders with deep pockets and investors willing to take a huge leap of faith.

Revenue 287

Revenue Startup Business Model Retention 287

Startup Professionals Musings

NOVEMBER 9, 2020

Great entrepreneurs are always focused on the growth dimensions of more revenue, change impact, and profit. In any business, it’s hard to be an A-Player in a business that is not healthy. In this highly competitive world, no growth means falling behind, as a business or in your career.

Founder 397

Founder Employee Entrepreneur Revenue 397

Startup Professionals Musings

SEPTEMBER 17, 2021

Smart founders and smart salesmen look for customers with a painful problem, rather than pushing a nice-to-have solution. With the best solutions, the customer gets value which exceeds your revenue. Putting all your effort into driving your favorite solution can lead to forgetting the problem being addressed in the first place.

Sales 348

Sales Startup Bootstrapping Technical Review 348

Startup Professionals Musings

SEPTEMBER 29, 2018

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. This could equate to two technical founders (with a minimal salary), funding two developers for a year.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

Startup Professionals Musings

JULY 20, 2013

After working with dozens of startup founders, I’m still amazed that some seem to be able to do the job easily and effectively, always in control, while others always seem to be struggling, out-of-control, and fighting the latest crisis. In that context, startup founders should carefully review the points made by Denny F.

Founder 260

Founder Leadership Employee Management 260

Startup Professionals Musings

MAY 15, 2019

For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect. Don’t attempt to scale it until you have a proven repeatable business model that predictably generates revenue. Process myth: Why building a product leads to failure.

Startup 245

Startup Angel Investor Technical Review Incubator 245

Startup Professionals Musings

MARCH 12, 2012

One of the biggest red flags I see in many Internet-related business plans today is advertising as the initial revenue stream, or a key part of it. Until you get a million page-views per month, your revenue will be negligible, and advertisers won’t be interested in your site. Now back to the revenue realities. Face reality.

Revenue 266

Revenue PPC Advertising CPA 266

Startup Professionals Musings

OCTOBER 21, 2023

How do you convince investors that your business model will really work, before you have a revenue stream that exceeds your expenses? Too many founders have learned that passion and free beta products do not imply a sustainable business. Of course, that has be a repeatable event, with enough revenue to sustain the business.

Business Model 273

Business Model Customer Angel Investor Bootstrapping 273

Startup Professionals Musings

JULY 1, 2020

In the spirit of helping you prepare and respond positively, I offer my list of the most common new venture founder unexpected realities, with some thoughts on how to mitigate each one: The business seems to be driving you, rather than you driving it. You need all the positive traction you can get to survive and prosper.

Due Diligence 306

Due Diligence Entrepreneur Startup Acquisition 306

Startup Professionals Musings

FEBRUARY 21, 2012

Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. For example, a web-based startup should be able to operate for a year if they raise $500,000 from the founders or angels. Great strategy. Do it yourself and barter for services.

Burn Rate 232

Burn Rate Startup Salary Equity 232

Startup Professionals Musings

OCTOBER 16, 2023

Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Doubling revenue each year is a good target. You need 5 percent or more of revenue for marketing, maybe more for ongoing development, and people costs will double as you add benefits, insurance, training, IT and new processes.

Forecast 290

Forecast Burn Rate Widget Business Plan 290

Startup Professionals Musings

SEPTEMBER 22, 2022

Great marketing is required to generate revenue and grow every business, especially new businesses which have no brand recognition nor loyal customer base. Usually these are described as revenue growth drivers, as outlined in a new book, “ The Revenue Accelerator: The 21 Boosters to Launch Your Startup ,” by Dr. Allan Colman.

Marketing 333

Marketing Revenue Matching Viral 333

Startup Professionals Musings

OCTOBER 5, 2014

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. This could equate to two technical founders (with a minimal salary), funding two developers for a year.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

JUNE 23, 2023

The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. In my experience, some startup founders do overcome these odds, but you need to be realistic and do your homework. Demonstrate an ability to repay from revenues, not collateral.

Silicon Valley 292

Silicon Valley CPA Small Business Administration Startup 292

Startup Professionals Musings

NOVEMBER 21, 2016

They expect to hear about founders and team member’s prior experience in building a startup, and knowledge in the relevant solution domain. Many naïve startup founders believe that they can make good money with low margins. Declare a $10 million valuation with no revenue or customers. Higher numbers cause investors to walk away.

Intellectual Property 120

Intellectual Property Valuation Technical Review Equity 120

Startup Professionals Musings

JANUARY 28, 2011

Pay people with equity or future revenue. Another one to avoid cash burn for software development is a contract for percent of future revenue. For example, a web-based startup should be able to operate for a year if they raise $500,000 from the founders or angels. Great strategy. Do it yourself and barter for services.

Burn Rate 231

Burn Rate Startup Salary Equity 231

Startup Professionals Musings

FEBRUARY 24, 2019

The founder explains that the product is so “buzz-worthy” that usage will spread rapidly through word-of-mouth only, meaning people loving it and recommending it to their friends. Every time I challenge a business plan with little or no budget for marketing, I get the answer that they will be using “viral” marketing, which costs nothing.

Viral 268

Viral Marketing SEM Campaign 268

Startup Professionals Musings

APRIL 24, 2011

Your friends and family are really the only answer until you have a significant revenue stream. They want founders who have been there and done that before, in the same business domain. Use friends, family, and angels, if possible, to get a product, revenue, and customers first before the VC connection. Line up a winning team.

Venture Capital 233

Venture Capital Revenue Elevator Pitch Silicon Valley 233

Startup Professionals Musings

DECEMBER 14, 2015

It really takes a complementary pair of founders to improve the odds. Consider the original founders of Apple and Microsoft as examples. Since both skills are required in equal amounts for success, the single founder failure rate today is reported to far exceed 50 percent.

Technical Review 120

Technical Review Startup Angel Investor Social Media 120

Startup Professionals Musings

AUGUST 31, 2019

Friendly or hostile takeover attempts are just a couple of the many ways that company founders sense a loss of control of their own destiny. The board of directors, as well as public stockholders, are no longer part of the inside team focused on the founder’s vision to change the world. Startup founders don’t fit in a public company.

IPO 210

IPO SEC Prospectus Startup 210

Startup Professionals Musings

OCTOBER 23, 2013

They evaluate you like you should assess a possible co-founder or first employee. Are revenues and costs reasonable and projected for five years? entrepreneur startup idea investor funding founder business' Investors are people too. What are your credentials? Marty Zwilling.

Founder 270

Founder Cofounder Bootstrapping Entrepreneur 270

Startup Professionals Musings

APRIL 10, 2016

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

JULY 12, 2023

But the insights I see from her book and elsewhere are equally applicable to startup founders of all ages, and businesses of all ages. Look for operations that are hogging resources without generating significant revenue. Look for hidden sources of revenue. Examine every cost center in your business. Snap up top talent.

Viral 232

Viral Revenue Distribution Campaign 232

Startup Professionals Musings

NOVEMBER 1, 2014

Supportive co-founder and executive positions. Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold. They want to share your satisfaction in success, maybe as a reward for their own mistakes and learning earlier in life in their own businesses.

Entrepreneur 266

Entrepreneur Advisory Board Dividend Angel Investor 266

Startup Professionals Musings

JANUARY 22, 2021

How do you convince investors that your business model will really work, before you have a revenue stream that exceeds your expenses? Too many founders have learned that passion and free beta products do not imply a sustainable business. Of course, that has be a repeatable event, with enough revenue to sustain the business.

Business Model 414

Business Model Angel Investor Bootstrapping Revenue 414

Startup Professionals Musings

SEPTEMBER 27, 2020

The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. In my experience, some startup founders do overcome these odds, but you need to be realistic and do your homework. Demonstrate an ability to repay from revenues, not collateral.

Silicon Valley 431

Silicon Valley CPA Small Business Administration SBA 431

Startup Professionals Musings

APRIL 4, 2011

After working with dozens of startup founders, I’m still amazed that some seem to be able to do the job easily and effectively, always in control, while others always seem to be struggling, out-of-control, and fighting the latest crisis. In that context, startup founders should carefully review the points made by Denny F.

Founder 263

Founder Startup Leadership Employee 263

Startup Professionals Musings

APRIL 8, 2015

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Startup Professionals Musings

OCTOBER 10, 2014

Tie payments to your product or service revenue. Some founders are too focused on quick repayment, and they compromise strategic decisions. That means writing down and signing the terms of the agreement, after making sure everyone understands them. Try to avoid obligations with fixed repayment schedules.

Founder 254

Founder Cram Down Angel Investor Equity 254

Startup Professionals Musings

JANUARY 18, 2014

For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect. Don’t attempt to scale it until you have a proven repeatable business model that predictably generates revenue. Process myth: Why building a product leads to failure.

Entrepreneur 283

Entrepreneur Startup Angel Investor Technical Review 283