Law and entrepreneurship at duke 01 26 2012


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I presented these slides at a lunch hosted by Duke Law School's Law & Entrepreneurship Society on January 26, 2012.

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Law and entrepreneurship at duke 01 26 2012

  1. 1. Startup & Venture Lessons Law & Entrepreneurship Society at Duke Jay Jamison Partner, BlueRun Ventures | @jay_jamison | CONFIDENTIAL
  2. 2. Agenda Introduction Top 10 Lessons Q&A CONFIDENTIAL
  3. 3. Introduction• Duke, BA, English, 1992• Emory Law School, 1995-96• MBA, Wharton,1998• Microsoft, 1998-2007• Founder, Moonshoot, 2007-10• Partner, BlueRun Ventures, 2010-Present CONFIDENTIAL 3
  4. 4. About BlueRun Ventures• Over $1.0B under management• Investing out of Fund IV ($240M)• Focus: Mobile & consumer internet• Seed & Series A CONFIDENTIAL 4
  5. 5. Stuff that surprised me• Having nearly 10 years at MSFT didn’t matter at all.• Having an MBA from Wharton mattered even less.• Having had a year of law school didn’t register.• But, several of the skills from all this really helped. CONFIDENTIAL 5
  6. 6. Top 10 Startup Lessons1. Today’s Golden Age For Founders & Its Double-Edge Sword2. What’s #1: Markets, Team, or Product?3. Picking Co-Founders & How to Split the Equity Baby4. Make It Happen5. Get used to ―No‖6. Hire Slow, Fire Fast7. Distribution is Really Hard & Really Important8. If You Stop Loving It, Make a Change9. Values From Day 110. Pitching & Fund-Raising11. Getting into Venture Capital12. Thoughts on Legal13. My go-to resources CONFIDENTIAL 6
  7. 7. Lesson 1:It’s a Golden Age for Entrepreneurs…. Cheaper than ever to start a company. Better resources • Incubators: Y-Combinator, 500Startups, … • Resources: Startup Digest, Lean Startup, TC, VB Technology is easier to learn, access, &c. • Codecademy • RoR • AWS CONFIDENTIAL
  8. 8. … And Investors Understand This. I see lots of great companies that are: • Capital efficient • High velocity in coding and releasing • Product in market with traction • Clear customer insight on what works • Battle-tested founding teams • Clear, concrete ask on what $$$ they need CONFIDENTIAL
  9. 9. Implication While we’re in a Golden Age for Entrepreneurs, it is raising the bar for most very early stage companies… You need to prove more on verylittle money, because so many other start-ups are already doing so. CONFIDENTIAL
  10. 10. Lesson 2:What’s #1: Markets, Team, or Product? Which is most important?A.MarketB.ProductC.Team CONFIDENTIAL
  11. 11. Which is most important?A.MarketB.ProductC.Team CONFIDENTIAL
  12. 12. Analysis• 75 pitches / quarter Market• 0-2 get to term sheet Team• Score each Traction• Multiple regression Product CONFIDENTIAL 12
  13. 13. How I think about MarketsChoose Any 4 Companies, Stack Rank Vision • World’s largest store • Redefine social • Organize & access information • Reinvent money Your Company • ???? CONFIDENTIAL
  14. 14. Lesson #3:Finding a Technical Co-FounderMore important than fund-raisingRequires almost the same skills• Pitching and salesmanship• Capacity to speak enough geek• Resourcefulness CONFIDENTIAL 14
  15. 15. Default founder split: equal 33% 33%50% 50% 33% CONFIDENTIAL 15
  16. 16. Lesson 4: The Get It Done PrincipleYou never get a second chance to If you’re not embarrassed with your make a first impression. – Anon. first launch, you’re waiting too long. – Reid Hoffman Lean StartupRevenue from Day 1 Never stealth! Building for Scale Scrum Everything Inhouse Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 16
  17. 17. Just Get Stuff DoneYou never get a second chance to make a first impression. – Anon. If you’re not embarrassed with your My Advice & Learning: you’re waiting too long. – first launch, Reid Hoffman • Absorb all this stuff Lean Startup • Listen to people you trustRevenue from Day 1 Never stealth! • Use what works Building for Scale for you Scrum Everything Inhouse • The key is work fast & economically Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 17
  18. 18. Lesson 5:Get Used to NoAs Founder: Heard ―No‖ a lot, especially fund-raising• At least 150 times• From 5 different countriesAs an Investor: I say ―No‖ a lot, especially to fund-raisers• Probably 1% CONFIDENTIAL 18
  19. 19. What’s weird about this…• These numbers are probably about average• Generally ―No‖ coming from smart, polite person(Not always the case, so be careful)• Under 10% of founders really follow-up and stay after it• Lesson: build a plan to deal with ―No‖… CONFIDENTIAL 19
  20. 20. Lesson 6:Hire Slow, Fire FastHire Slow Fire Fast• Wait for real pain • When perf lags, speak up• Everyone interviews • Set clear expectations• Share feedback • Set a crisp timeline• Do reference checks • Fire• Dinner w/ SO • Ensure lawyer is in loop CONFIDENTIAL 20
  21. 21. Lesson 7:Distribution, distribution, distribution This is by far the weakest part of your business at this point And, it is also one of the most important… CONFIDENTIAL
  22. 22. Love It or Leave It CONFIDENTIAL 22
  23. 23. Lesson 9ValuesValues are key from day 1• Set them & talk about them constantly.• No ―right‖ way to do this, but doing it is important• Make sure everyone knows them, everyone buys in CONFIDENTIAL 23
  24. 24. Lesson 10Thoughts on Fund-Raising CONFIDENTIAL
  25. 25. Logistics : Pre-Meeting • Arrive 15 minutes early every time • Have back-ups (2nd PC, Dongles, USBs) • Treat everyone you interact with politely • Setup & preflight ppt & demo before meeting starts • Bring ideally 2-3 people Remember: You are SELLING CONFIDENTIAL
  26. 26. Logistics: During Meeting• Give everyone who attends a role• Script which person handles which slide(s)• Assign a scribe, every time CONFIDENTIAL
  27. 27. Logistics: Q&A During MeetingOften badly managed, and very importantAnswer questions directlyScript answers on the obvious questions – How much are you raising? – How long does this last? – What beachhead markets do you think are most promising? – What holes exist in your team? – Why won’t Google, Facebook, Twitter, or someone else eat your lunch? – What makes you the right team to do this? CONFIDENTIAL
  28. 28. Logistics: Post Meeting• Scribe: Write down all new QA for FAQ• Follow-up in email that day w/ thanks, etc.• Do what you need to handle rejection• Keep positive & keep in touch CONFIDENTIAL
  29. 29. Getting a Job in VentureNo clear career path into ventureSmall, private partnership—bespoke culturesSeveral routes inMy advice : Add Value• Proprietary Deal Flow• Earn Founders’ Trust and Respect• Win the Right Business• Showcase that you’re a great team player CONFIDENTIAL 29
  30. 30. Thoughts on Legal Michael Arrington Matthew Prince Chris Sacca David Hornik CONFIDENTIAL 30
  31. 31. Thoughts on LegalMost important early stage needs• Board composition• All employee contracts & invention assignments handled• Liquidation preferences & rightsAttracting clients• Get out there and build presence• Yokum Taku, e.g., CONFIDENTIAL 31
  32. 32. Go To Resources• TechCrunch, VentureBeat, TechMeme, etc.• JoelonSoftware•• Startup digest• Netflix on Culture•• Igor International Naming Guide• Paul Graham’s blog. CONFIDENTIAL 32
  33. 33. Thanks! CONFIDENTIAL 33