Lean Startups aren't Cheap Startups

Steve Blank

For those of you who have been following the discussion, a Lean Startup is Eric Ries ’s description of the intersection of Customer Development , Agile Development and if available, open platforms and open source. Lean Startups aren’t Cheap Startups A Lean Startup is not about the total amount of money you may spend over the life of your startup. Over its lifetime a Lean Startup may spend less money than a traditional startup.

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5 Ways to Make Your Startup a Choice Investment

Startup Professionals Musings

Since Angel investors put money into 60 times as many companies as venture capital funds, according to Wikipedia, early-stage startups need to focus first on the key thresholds that drive these investment decisions. The single most important ingredient of success is not the idea, but having a team in place that has impeccable integrity, can iterate the product quickly, pivot the business model as necessary, and keep costs down in the process.

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6 Keys To Managing Funding From People Close To You

Startup Professionals Musings

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup.

The Damaging Psychology of Down Rounds

Both Sides of the Table

a) doing what is effectively a down round preemptively when I don’t have to, by underpricing my current round in this market vs. b) accepting the market price along with some risk of taking a down round in the future, if I don’t hit my milestones, why would I ever choose b)?” I would love it if other people would weigh in on the comments section below if you’ve had experiences with down rounds. The Damaging Psychology of Down Rounds.

How To Take Money From Friends And Still Be Friends

Startup Professionals Musings

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. The only way an entrepreneur can really dodge this issue is to totally fund the startup with personal funds (bootstrapping). That means writing down and signing the terms of the agreement, after making sure everyone understands them.

The Good The Bad And The Ugly Of Funding From Friends

Startup Professionals Musings

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. The only way an entrepreneur can really dodge this issue is to totally fund the startup with personal funds (bootstrapping). That means writing down and signing the terms of the agreement, after making sure everyone understands them.

Don’t Hurt Friends and Family Investors Who Love You

Startup Professionals Musings

In their passion to succeed, too many entrepreneurs treat friends and family investments as “low-hanging” fruit, only to find out later, after a stumble, that the pain of lost relationships is greater than the loss of their beloved startup. The only way an entrepreneur can really dodge this issue is to totally fund the startup with personal funds (bootstrapping). That means writing down and signing the terms of the agreement, after making sure everyone understands them.

The Pros and Cons of Filing Business Bankruptcy

The Startup Magazine

Chapter 13 can be used by sole proprietors, one-person corporations, and certain LLCs in some states to repay some debt, “cram down” any assets that are subject to loans and otherwise reorganize their business under a three- to five- year repayment plan. The value of assets can be “crammed down” to market value; debtor pays less. The post The Pros and Cons of Filing Business Bankruptcy appeared first on The Startup Magazine.

Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits. The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1.

Want to Know How First Round Capital was Started?

Both Sides of the Table

As a courtesy if you enjoyed his write-up please check out his startup company, ChannelStack. They chose the name First Round Capital because they thought capital would be deployed most efficiently at smaller seed stage rounds considering the cost to build an internet business had come down drastically. He also says it is important to be able to participate in follow on rounds so as not to get “crammed down”. Startup Advice This Week in Venture Capital

Are Investors Being Unreasonable? - Startups and angels: Along the.

Tim Keane

Startups and angels: Along the way to success. "  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur.  Funding startups. Startup ideas. Resources for startups.

A Year of Reckoning for Angels and Seed Funds

A Crowded Space

We expect there to be an increase in down rounds, flat rounds, inside rounds and various pay-to-play scenarios. These companies shut down. While these are painful outcomes for everyone, it’s a necessary part of the startup ecosystem. These shut downs are likely to happen when companies are funded solely by seed funds and angel investors that have not reserved significant capital for follow-on investments. A 5% equity stake could get cut down to 1%.

The Biggest Threats to My Business

Rob Go

Getting Crammed Down. If a), you reduce the cram-down risk, but also reduce the fund’s upside because you own less of your portfolio companies to begin with. Just like any startup, to stay successful, you need to stay inventive, stay hungry, and keep putting out the best product time and again. I think it’s sometimes a good exercise for companies to take a step back and think about the big external threats to their businesses.

Nobody Gets Consumer in Boston

Rob Go

This is counter-intuitive, but Boston startups I find are often too early. But overall, I think there is one major issue at work, and it does come down to the culture and high-brow intellectualism of this market. Angels don’t want to look stupid by having the large number of losses required to catch winners, or get crammed down by VCs investing big dollars ahead of them. Everyone knows that nobody gets consumer in Boston.

Does raising money mean you should start scaling?

The Next Web

In startup-land, people seem to think raising money is a signal that their business is sound and they should start scaling as soon as possible. The main challenge, as we’ll discuss below, is that startups need to internalize two conflicting attitudes. Weaknesses inside the founder team kill startups. I want startups and first time entrepreneurs to be more frugal and stay in discovery mode longer. In fundraising, the goal is to show that your startup will be successful.