Gust

SEPTEMBER 12, 2011

It’s the result of several decades in high tech, three years as an investor in a local Oregon angel investment group , some consulting in due diligence for venture capital, and my experience as founder and co-founder of successful ventures. I’m talking about what Marc Andreeson calls product/market fit.

Technical Review 70

Technical Review Software Review Angel Investor Exit Strategy 70

Gust

OCTOBER 17, 2012

In addition, angels were up against a selection problem: All the best entrepreneurs and opportunities would naturally gravitate to the best venture capital funds, leaving only the “scraps” for angel investors. This is absolutely competitive with venture capital returns. So which is it? Only they’re not.

Angel Investor 152

Angel Investor Venture Capital Seed Stage Silicon Valley 152

Gust

NOVEMBER 22, 2011

For instance, if your company is only a few weeks old and you have zero customers and your product offering is still in design, don’t expect someone to hand over $10 million to fund your efforts. Angel investors typically provide early-stage funding, while venture capital firms typically come in at later stages. Growth stage.

Venture Capital 171

Venture Capital Investment Bankers Angel Investor Initial Public Offering 171

Gust

OCTOBER 14, 2011

But one crucial one that you can implement might be called the “Rhythm Method”: imparting a well-known beat to your product and service upgrades. 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.

Product 70

Product PR Matching Engineer 70

Gust

SEPTEMBER 27, 2014

In order to be competitive, a company needs to have just about everything in place, from its product to its team to market traction, before it is ready to seek funding. Your private profile is where investors will look with a critical eye on everything that makes you a business rather than just a product or a sexy idea.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

Gust

NOVEMBER 29, 2011

Consequently, US regulators have discouraged the selling of equity (shares) through crowd funding websites, so online companies, such as Kickstarter.com , offer the opportunity to donate funds to interesting US startup ventures in exchange for the right to become early product users or simply listed on the new ventures’ websites.

Securities and Exchange Commission 154

Securities and Exchange Commission Accredited Investor Angel Investor Due Diligence 154

Gust

OCTOBER 31, 2011

Many writers have outlined the critical success factors for product companies, like sell every unit at a profit, patent the design, and continuous product improvement. The distinction between product companies and services companies is easy to see. The distinction between product companies and services companies is easy to see.

Angel Investor 143

Angel Investor Venture Capital Partner Networking 143

Gust

DECEMBER 22, 2011

So you’ve chosen a name for your startup, product, or both. Trademarks , which we touched on last week, are brand and product names, graphic logos, slogans, taglines, and other indicators of origin of the goods or services in question. Hence this “Cliff’s Notes” refresher, to be followed by a discussion of why it matters.

Intellectual Property 149

Intellectual Property Technical Review Software Review IP 149

Gust

OCTOBER 8, 2014

I found this annoying (I can’t think of a better word for the behavior) because it seemed like entrepreneurs were more concerned about the optics of the financing round than who was participating, would the lead (me) but supportive or simply focusing on building a great product and trusting that the financing nomenclature would work itself out.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

Gust

DECEMBER 29, 2013

Some entrepreneurs can’t decide if they want to be a Limited Liability Corporation (LLC) or a C-corporation, or they don’t have the money, so they put off doing anything until the first venture capital round, or until the first lawsuit occurs. Too many founders think it’s more important to work on products and customers.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

OCTOBER 8, 2014

You are ready to start when you can: 1) identify a grand and worthy vision; 2) predict a trajectory for your growth; and 3) share marketing/sales, product, and financing plans that will enable you to get there. My answer is almost always the same. When you embark on the financing process, you should expect it to take at least 6 months.

Venture Capital 163

Venture Capital Finance Early Stage .Net 163

Gust

DECEMBER 5, 2011

Too many entrepreneurs develop a new product without regard for market demand , then build an entire strategy based on creating a need, rather than acting on an existing market need. Temper your product with actual market and customer feedback. Investors characterize this approach as a “solution looking for a problem.”

Technology 167

Technology Angel Investor Early Stage Viral 167

Gust

OCTOBER 20, 2011

Product/Technology 0-15%. Some are surprised to find that investor rankings of product and technology are below those of the management team and the size of the opportunity. A great team will fix early product flaws, but the reverse is not true. Product/Technology.

Valuation 146

Valuation Pre-Money Valuation Intellectual Property Technical Review 146

Gust

NOVEMBER 28, 2011

Often I find that experienced investors flip to the management page of a business plan, even before they read the product description. The most common solution is that you “bootstrap” your business, or fund it yourself, at least to the point that your “traction” is evident (you have a product, you have customers, you have revenue).

Startup 147

Startup Bootstrapping Social Network Internet 147

Gust

DECEMBER 19, 2011

A good answer might be “We have several patents on the base technology, which is so robust that we expect to roll out new products every year for the next ten years, always staying a step ahead of our competitors.” Our product is truly disruptive technology.” The concept is called “sustainable competitive advantage.”

Viral 98

Viral Advertising Lead Investor Revenue 98

Gust

DECEMBER 20, 2011

I liked this from Steve Blank: The Startup Team , explaining why the team is so important: “In a perfect world you build your vision and your customers would run to buy your first product exactly as you spec’d and built it. You need a combination of skills.

Angel Investor 93

Angel Investor Oregon Business Model Search 93

Gust

JANUARY 4, 2012

Entrepreneurs: if you’re looking seriously at angel investment, and you have the kind of product-market fit and management experience investors will like, you need to take a good look at convertible notes. Do yourself and the investors you want to talk to a favor: take a few minutes and do some homework on this issue.

Angel Investor 114

Angel Investor Valuation Angel Groups Equity 114

Gust

OCTOBER 25, 2011

Assume you have the right factors to get angel investment: experienced team, good product-market fit, growth potential, defensibility, and a reasonable shot at a successful exit. Have you asked yourself whether that’s what you really want? Have you considered the tradeoffs?

Cofounder 133

Cofounder Angel Investor Equity Software 133

Gust

DECEMBER 16, 2011

Your most important story tells how and why somebody buys your product. You can’t overemphasize the stories when you describe your business. The best business plans are stories, and the best pitches are stories. That buyer, not you, is the hero of the story. Except in special cases you should lead with that story.

Exit Strategy 98

Exit Strategy Angel Investor Differentiation Audience 98

Gust

DECEMBER 6, 2011

Optimism ought to be a combination of potential market, product-market fit, scalability, defensibility, and management experience. What I don’t like is the complete lack of experience that’s causing it. Ideally, a business pitch is exciting because the business potential is exciting.

Angel Investor 70

Angel Investor Early Stage Business Plan Sales 70

Gust

NOVEMBER 1, 2011

Somebody likes numbers, somebody likes to sell, somebody builds product, and these somebodies are rarely all the same people. It also usually takes a team, not just an individual, because two or three people are more likely to span some of the skills needed. Are you committed to an exit?

Angel Investor 93

Angel Investor Intellectual Property Finance Web 93

Gust

OCTOBER 21, 2011

Rule #2 is: demonstrate not just your wonderful idea, but that you understand the concept of product-market fit. But you must be able to articulate, from the start, a very clear and compelling benchmark for success once a million has gone out the door… and, ideally, intermediate goals for each few hundred thousand spent along the way.

Early Stage 79

Early Stage Metrics Audience Revenue 79

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

DECEMBER 12, 2011

After the idea, it’s all about execution. I often hear from investors that a great idea is necessary, but not sufficient. The most important thing is a proven team , meaning one who has built a startup before, and has experience with the execution process in this domain.

Cost 114

Cost Business Plan Entrepreneur Startup 114

Gust

DECEMBER 22, 2013

Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant. Professionals will tell you that the sequence is friends and family first, angel investors second, and only then venture capital.

Entrepreneur 184

Entrepreneur Angel Investor Bootstrapping Venture Capital 184

Gust

AUGUST 6, 2014

As such, this could cover many different things, such as: Your parents loaning you money to cover your expenses while you code your product. a single venture capital fund putting in the full amount as Series A Convertible Preferred investment. 25 individual angel investors funding a startup on a convertible note.

Term Sheet 170

Term Sheet Lead Investor Preferred Stock Common Stock 170

Gust

JULY 1, 2012

Generally, the same criteria applies to venture capital investors, although they invest other people’s money, at a later stage, in larger amounts. Both are excited by innovative new products and services, and neither is normally interested in deals in the following domains: Consulting services. Restaurants and retail.

Angel Groups 143

Angel Groups Angel Investor Early Stage Startup 143

Gust

DECEMBER 12, 2011

Without a doubt, Birchbox is one of the hottest startups on the planet right now. They are mentioned in any print, website, or television content concerning beauty, startups, New York, great entrepreneurs, women leaders , or the next generation of IPOs. So, its almost impossible to avoid them.

IPO 70

IPO Social Network Revenue Aggregator 70