Gust

APRIL 27, 2014

This will include the first version of many critical processes that can be split out later, including market opportunity, requirements, product definition, business model, sales process, and organization. Write down the key elements of your business plan very early, and keep it current as things evolve. Product development process.

Startup 187

Startup Institutional Investors Angel Investor Bootstrapping 187

Gust

DECEMBER 15, 2013

Even in these cases, all other options should be explored first: Sales are strong – too strong. If nothing else, these make good excuses for failure – no freedom, wrong guidance, etc. On the other hand, there are clearly situations where your needs call for investors.

Bootstrapping 183

Bootstrapping Sweat Equity Entrepreneur Technical Review 183

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. Building and populating databases of user-supplied information and content (copyright). trade secret).

Intellectual Property 143

Intellectual Property IP Startup United States 143

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

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

NOVEMBER 15, 2011

Sales and marketing risk. While this method certainly considers the level of management risk it also prompts the user to assess other risk types,” including: Management. Stage of the business. Legislation/Political risk. Manufacturing risk. Funding/capital raising risk. Competition risk. Technology risk. Litigation risk. International risk.

Valuation 102

Valuation Pre-Money Valuation Ohio Early Stage 102

Gust

JUNE 17, 2012

Exchanging equity for services is worth negotiating with legal counsel, accountants, engineers, and even sales people. An example would be getting free office space by agreeing to be the property manager for the owner. Partner with distributor or beneficiary.

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.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Gust

NOVEMBER 2, 2011

Product Rollout or Sales. Quality Management Team. Zero to $0.5 Sound Idea. Zero to $0.5 Working Prototype. Zero to $0.5 Quality Board of Directors. Zero to $0.5 Zero to $0.5 Note that the numbers are the maximum for each class (not absolutes) so a valuation can be $800K (or less) as easily as $2.5

Valuation 79

Valuation Pre-Money Valuation Intellectual Property Southern California 79

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Gust

APRIL 9, 2014

Rather more common is the practice of “evergreening” employee options, in which employees are given one or more additional option grants once their original grants have fully (or partially) vested.

Dilution 150

Dilution Equity Vesting Stock Options 150

Gust

SEPTEMBER 20, 2012

However, the fascinating wrinkle is that it looks like startups will NOT be able market this sale to anyone, but that instead the sale will have to be done through a new form of web site called a funding portal (think “Kickstarter for equity” ).

Accredited Investor 121

Accredited Investor SEC Stock Startup 121

Gust

AUGUST 5, 2012

Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Convince investors that you have lined up sales channels, strategic partners, and a viable marketing strategy. Competing with IBM, Microsoft, and other large companies should never be minimized.

Business Plan 182

Business Plan Sweat Equity Exit Strategy Intellectual Property 182

Gust

NOVEMBER 18, 2012

Assign probabilities to active customer sales efforts, just as sales managers do in quantifying a salesman’s forecast. For this to be a premium factor for you, your target market should be at least $500 million in potential sales if the company is asset-light, and $1 billion if it requires plenty of property, plants and equipment.

Valuation 187

Valuation Pre-Money Valuation NPV Intellectual Property 187

Gust

JULY 10, 2012

Nothing validates a new business like actual sales. If you don’t have the product to sell yet, cook up a deal for pre-sales. Find somebody to write you a written promise of sales and contracts as soon as you’re ready. . Sell Something. Checks written and signed say way more than big market numbers.

Bootstrapping 165

Bootstrapping Valuation Restful Sales 165

Gust

AUGUST 19, 2012

Marketing, sales, and partners. Describe marketing strategy, sales plan, licensing, and partnership plans. What is the planned exit strategy (IPO, merger, sale, including likely candidates)? List and position your competition, or alternatives available to the customer. Show a breakdown of the intended uses of these funds.

Elevator Pitch 146

Elevator Pitch Exit Strategy Burn Rate Merger 146

Gust

JULY 9, 2014

According to that theory, Apple should cut out its entire multi-billion dollar sales and marketing and retail store divisions, because all of its great products will sell themselves. “would a great idea be promoted without any marketing?” ” By whom?

Salary 138

Salary Hosting Restful Advertising 138

Gust

MARCH 9, 2014

In fact, the average spent by Inc 500 companies for sales and marketing expense continues to hover around 10% of overall revenues. If your early-year budgets for marketing aren’t 10% of projected sales or more, plus an early kicker for setup, you are probably underestimating reality, and jeopardizing your credibility with investors.

Marketing 146

Marketing SEM Viral Social Media 146

Gust

MAY 29, 2012

You can’t have a $20 million sales estimate with 10 employees in the company and a few hundred thousand dollars of marketing expense. By far the best validation of a plan is actual sales made already. I want realistic expenses. Most plans are pretty good about estimating direct costs but bad about underlying expenses.

Business Plan 174

Business Plan Forecast Channel Cost 174

Gust

JANUARY 30, 2014

Proven team (tech/product/design/mark eting/sales/domain/etc.). External validation (ideally traction and/or passionate customers). Viable business structure and cap table. Reasonable valuation. But most important of all , it must have an entrepreneur on whom I’m willing to bet.

Cap Table 119

Cap Table API Valuation Startup 119

Gust

SEPTEMBER 6, 2014

For a very brief time, when Facebook, LinkedIn, Groupon and Zynga were still private, there was a quick flurry of private secondary sales through platforms like SecondMarket and SharesPost. The secondary market for private company stock is brand new, and so nascent that it is virtually nonexistent.

Stock 104

Stock Marketing Sales 104

Gust

AUGUST 12, 2012

Equally important, marketing and sales people should be able to identify benefits and marketing strategies, set prices, and validate a business model. Business model, executive team, marketing & sales, financials, and funding. For software, websites, and high-tech products, this is the “meat” of what you intend to build.

Product 150

Product Business Plan Differentiation Business Model 150

Gust

MAY 18, 2015

Positive exits – Companies that liquidate with capital gains to investors, usually via a cash sale to a larger company. Three outcomes dominate exits of angel-funded companies: Dead bugs – Startups that go out of business, returning less-than-invested capital to angels (usually zero). The exits can range from simply return of Read more >.

Capital Gains 70

Capital Gains IPO Sales Startup 70

Gust

MAY 18, 2015

Positive exits – Companies that liquidate with capital gains to investors, usually via a cash sale to a larger company. Three outcomes dominate exits of angel-funded companies: Dead bugs – Startups that go out of business, returning less-than-invested capital to angels (usually zero). The exits can range from simply return of Read more >.

Capital Gains 70

Capital Gains IPO Sales Startup 70

Gust

OCTOBER 26, 2014

As soon as you bring in investors, they force you to plan for an exit (merger or sale) in three to five years. All you need is a blog, Twitter, email, some business card stock, and a little creativity. Don’t think about the exit. Sometimes the tiniest details will throw your startup company into disaster.

Bootstrapping 176

Bootstrapping Startup Merger Salary 176

Gust

DECEMBER 14, 2014

For example, more customer leads are predictive of more sales revenue later. Hold the lagging measures for later (results available after the fact), and focus on lead measures first (predictive of achieving a goal). Define a compelling scoreboard.

Entrepreneur 189

Entrepreneur Founder Revenue Startup 189

Gust

MAY 18, 2014

Sell yourself as the expert, and business sales will follow. Offer a story, entertainment, or a compelling idea that you can link convincingly to your brand, rather than trying to sell products or services directly. People buy from people, and in a startup, you are the brand. Offer utility to each audience member.

Customer 166

Customer Audience Advertising Social Media 166

Gust

SEPTEMBER 14, 2014

Effective leaders have to be courageous enough to communicate authentically from the basis of their real values, whether they are pitching to investors, closing a customer sale, or conversing informally with the team. Merely understanding what matters will not assure that you can communicate to inspire.

Technology 174

Technology Startup Leadership Global 174

Gust

NOVEMBER 15, 2012

In my own portfolio I have companies that are generally perceived to be extremely successful with high profile customers and lots of sales…but they just happen to have a liquidation preference ladder of $25 million!

Seed Stage 131

Seed Stage Hockey Stick Cap Table Liquidation Preference 131

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

AUGUST 3, 2014

They hate sales, and don’t understand what making a profit even means. Creative and artistic. You have to give the creator some resources, time, and throw in some food once in a while, and a “completed design” will appear in due time. Then they are done. Realistic if not pessimistic.

Entrepreneur 165

Entrepreneur Algorithm Business Plan Design 165

Gust

JUNE 13, 2012

But in the real world, when you get to business numbers, sales are not accounts receivable and revenue isn’t income and people who read financial projections need to know that an apple is an apple, and not an orange. . Numbers are numbers, after all.

Finance 121

Finance Revenue Sales Startup 121

Gust

JANUARY 12, 2014

For example, a result is not forty hours of work, but a prototype complete, partner contract signed, or first customer sale. Build your business plan and day-to-day operations around real results that are quantifiable and measurable. Focus and prioritize. There will always be more things to do than anyone has hours in a day.

Entrepreneur 171

Entrepreneur Hiring Employee Operations 171

Gust

SEPTEMBER 29, 2011

For a traditional VC financing round structured as a sale of preferred stock, the best resources I can recommend are the Term Sheet Series by Brad Feld and Jason Mendelson and Startup Company Lawyer by Yokum Taku. Knowledge is power. Every installment or post in those series is a good read, and I won’t attempt to reinvent the wheel here.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Gust

FEBRUARY 2, 2014

During his ten-year tenure, Apple’s sales increased from $800 million to $8 billion. She is a graduate of Princeton University and has an MBA from the Harvard Business School. John Scully, former CEO of Apple. He has an MBA from the Wharton School of Business.

Entrepreneur 175

Entrepreneur Salary .Net Revenue 175

Gust

OCTOBER 11, 2011

She was interrupted when she clicked to the financial summary, a bar chart showing three years of annual sales, gross margin, and net income. As they summarized their numbers, they were projecting enormous growth in sales with relatively tiny marketing expenses and huge profits, like 50 percent of sales before taxes.

Intellectual Property 70

Intellectual Property Differentiation .Net 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