Gust

DECEMBER 6, 2011

A medical device company, on the other hand, may need cash resources to pay for FDA testing, designing the prototype, manufacturing the product, establishing an inventory of the devices and establishing marketing and sales channels for the products. Most high-impact companies need substantial cash resources to sustain their rapid grow.

Angel Investor 179

Angel Investor Venture Capital Valuation Software Engineering 179

Gust

JANUARY 4, 2012

Sales and marketing plans , lists of prospects, supplier and subcontractor relationships, pricing data, media buying plans and strategies, etc. Large companies] win by locking competitors out of their sales channels. If you do manage to threaten them, they’re more likely to buy you than sue you. trade secret).

Intellectual Property 143

Intellectual Property IP Startup United States 143

Gust

JUNE 17, 2012

An example would be getting free office space by agreeing to be the property manager for the owner. Exchanging equity for services is worth negotiating with legal counsel, accountants, engineers, and even sales people. Bartering technically means exchanging goods or services as a substitute for money.

Technical Review 164

Technical Review Bootstrapping Venture Capital Incubator 164

Gust

JUNE 7, 2014

Every investment round in a company is made on the basis of extensivepaperwork (often upwards of 100 pages in total) specifying *precisely* what happens when it comes time to pay out the proceeds (if any) from the sale or dissolution of the company. Management carve-out (if any). Management carve-out (if any).

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

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 2, 2011

Quality Management Team. Product Rollout or Sales. It has been used by angels since, however Dave updated the model for 2009 ACA Leaders Workshop in Richardson, TX. Here is his latest version. Characteristic. Add to Pre-money Valuation. Zero to $0.5 Sound Idea. Zero to $0.5 Working Prototype. Zero to $0.5 Quality Board of Directors.

Valuation 79

Valuation Pre-Money Valuation Intellectual Property Southern California 79

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.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

DECEMBER 14, 2014

For example, more customer leads are predictive of more sales revenue later. Startup founders also need to realize that building and managing a company is quite different from learning to search for and solidify an idea that can grow into a company. Define a compelling scoreboard.

Entrepreneur 189

Entrepreneur Founder Revenue Startup 189

Gust

MAY 25, 2014

After my sales pitch, he was so excited I knew he could do the job.” Some hiring managers spend the interview selling the company under some mistaken impression that the level of candidate excitement they can generate is indicative of future performance. Everyone you hire has to fit effectively with many others on the team.

Hiring 170

Hiring Hosting Naming Entrepreneur 170

Gust

OCTOBER 12, 2014

Other common previous roles were executives in Sales, Marketing, and Product Management, all suggesting that VCs back experience. Amazingly, no founding teams in the Gen-Y 18-25 year range received any funding in California. Experience does count. Fully 39% of founders funded were formerly CEOs or had founded prior companies.

Silicon Valley 182

Silicon Valley Venture Capital Massachusetts California 182

Gust

JULY 29, 2012

Managing employees is a whole separate discipline, and most true entrepreneurs aren’t very good at it anyway. An example would be getting free office space by agreeing to be the property manager for the owner. Exchanging equity for services is worth negotiating with legal counsel, accountants, engineers, and even sales people.

Bandwidth 155

Bandwidth Bootstrapping Equity Startup 155

Gust

FEBRUARY 2, 2014

During his ten-year tenure, Apple’s sales increased from $800 million to $8 billion. If you have a technical career with no business background, and you want to start your own business, an MBA can be a blessing by giving you the basic knowledge you need to manage your business. John Scully, former CEO of Apple.

Entrepreneur 175

Entrepreneur Salary .Net Revenue 175

Gust

DECEMBER 16, 2011

And, a bit misty-eyed, this old war veteran can actually remember the glory days: Venture capitalists would commit tens of millions for a startup to buy expensive infrastructure; hire sales and marketing teams as products were still being built; and lease out big slugs of office space for the coming hiring spree.

IPO 87

IPO .Net Social Network Mobile 87

Gust

OCTOBER 14, 2012

Don’t make wildly optimistic sales forecasts. Wise people admit their mistakes easily, and move the focus away from blame management and towards learning. Test and adjust your projections, based on experienced advisor input and industry norms, rather than the Google high exception. Wise people can become great entrepreneurs.

Entrepreneur 174

Entrepreneur Forecast Hiring Leadership 174

Gust

DECEMBER 6, 2011

Optimism ought to be a combination of potential market, product-market fit, scalability, defensibility, and management experience. Better yet, early sales, initial growth rates, proof of concept in buyers or users or subscribers or signups or something equally concrete. Tell your story well.

Angel Investor 70

Angel Investor Early Stage Business Plan Sales 70

Gust

NOVEMBER 29, 2011

Hockey stick sales forecasts are cool when they’re based on some justifiable logic. I always look for marketing expenses as a percent of sales, and headcount and personnel costs, and compensation for management. Well said. And to add some specific examples: I hate the high growth rates that aren’t built on detailed assumptions.

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). Sales contracts accounting for significant revenue. Office and equipment leases.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Gust

OCTOBER 11, 2011

She, the CEO of a fledgling pharmaceutical company with a lot of intellectual property, research, management experience, was confident, rolling through slides, and building momentum. She was interrupted when she clicked to the financial summary, a bar chart showing three years of annual sales, gross margin, and net income.

Intellectual Property 70

Intellectual Property Differentiation .Net Sales 70

Gust

OCTOBER 20, 2011

The next step in determining the pre-money valuation of pre-revenue companies using the Scorecard Method is to compare the target company to your perception of similar deals done in your region, considering the following factors: Strength of the Management Team 0-30%. Marketing/Sales/Partnerships.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

OCTOBER 14, 2011

Obviously, a frantic reaction to someone else’s move will damage the way your biz dev, sales, product managers, engineers, PR people, and strategy teams interrelate. They’re relaxed. Your customers should feel the same way. It reinforces processes. And that’s hard enough to get right already!

Product 70

Product PR Matching Engineer 70

Gust

MAY 24, 2012

Management control is further entrenched by other provisions including a “controlled company” designation , exempting the company from the customary stock exchange-imposed corporate governance rules that apply to the vast majority of public companies in the post-Sarbanes-Oxley era.

IPO 159

IPO Equity Common Stock Stock 159

Gust

JANUARY 5, 2012

But, this SEC limit has created some problems for these high-tech phenoms, both in raising additional capital and in private sales through secondary markets in which early investors resell shares to a large number of smaller US buyers.

SEC 131

SEC Angel Groups Technical Review Private Equity 131

Gust

NOVEMBER 25, 2012

He does a great job in the book of making the case for management systems, rather than gut-level reactions, to make required course corrections (pivots), to dramatically improve the odds for success. In sales terminology, the mechanism by which a company delivers it product to customers is called the sales channel or distribution channel.

Silicon Valley 187

Silicon Valley Architecture Startup Channel 187