10 Immutable Truths of Entrepreneurship (Updated Keynote)

10 Immutable Truths
of Entrepreneurship
Margaret Wallace, CEO, Playmatics
Twitter: @MargaretWallace

About Me
Entrepreneur
Adviser
Inventor
Margaret Wallace, CEO, Playmatics
Twitter: @MargaretWallace
Tech, Media, Gaming Focus

About
Playmatics
A company that creates highly engaging games, media, user experiences and applications on the Internet, as part of social media networks, and on a variety of connected platforms.

Start-UpFunding Options(I’ve done them all!)

Funding Options

$
Raised $3.5 million in VC
Copyright 2010. Margaret Wallace. Please Attribute Proper Credit if You Use These Slides

Different Considerations
Lessons Learned
Sharpened Focus
Takeaway: Experience is the Best Teacher.

#1.
Know Yourself

What is your tolerance for risk?
Is your business a lifestyle?
What are the likely exit scenarios?
Takeaway:
Don’t Chase After The Money, Go Inside and Find Out What Makes You “Tick.”

#2.
Develop a keen
sense of others.

Gamify It!

“User” Motivations
Relationship Management
Not Fixed in Time

Example:
Raising Venture Capital

How VCs Rate Your Chances of Success
Break-Out Success
Break-Even
#FAIL
Takeaway: VC & Start-Up Goals Are Not Always in Alignment.

“To the VC, 3x [exit] and a dead startup are essentially the same given the way they calculate their batting averages. At this point you have a problem.”
Hillel Cooperman, Jackson Fish Market, Web startup in Seattle.

Strength of Idea
Market Size
Strength of Team
Competition
Takeaway: VCs are all about managing risk. The more risk you remove, the more comfort they have with you.

But it’s not that easy….

“The Unspoken Language of Pitching Game”
Good,Bad, Indifferent? *
Instructions: I give you a few scenarios and you tell me if that’s good, bad or indifferent.
* Based on Personal Experiences.

The Unspoken Language of Pitching Game
Scenario:
First-time pitching this VC firm.
You are incredibly detailed and on-point.
You Leave No Stone Unturned.
Good,Bad, Indifferent?
(Bad!)

Scenario:
Recently Made a Lot of Investments in Your Space
(Indifferent) *
* Can Be A Bad Sign 

Scenario:
First meeting with Partners.
They offer you water and copious treats.
(Bad!)

Scenario:
First meeting
All the Partners are in the Room
Meeting Lasts 1 hour
Everyone Checking Their Blackberries/iPhone
Mid-way through – start joking about girls in bikinis.
(Good!)

Scenario:
An Associate of the VC Firm Calls You because they are impressed with your business and want to learn more.
(Bad!)*
* Or KOD (Kiss of Death)

Scenario:
Second Follow-Up Meeting:
Person You’re Scheduled With Can’t Make it – Meeting with an Associate or Different Partner.
(Bad)!

Scenario:
First meeting
All the Partners are in the Room
Meeting Lasts 2 hours
Agree with Everything You Say
(Indifferent)
* Was Bad for Us

Scenario:
First meeting with a Partner
Talking About Industry Gossip
Meeting Lasts 1 hour.
(Bad!)

#3.
Understand the Impact of Funding Choices

Funding Type Comparison
Takeaway: The Roadmap for a VC-Funded Company Will Generally Be More Accelerated.

Market Size & Competition
Takeaway: VCs Will Want To See You’ve Thought Through Strengths, Weaknesses, Opportunities, Threats (SWOT).

Growth & Staffing
Takeaway: Structure your staffing plan to reflect your investment approach.

#4.
Know Your Weaknesses

#5.
Hire Superstars

Staffing = Magical Alchemy

#6.
Nothing is Constant But Change

#7.
Know When to Pivot

#8.
You Only Have Yourself to Blame

#9.
Accept Failure Swiftly & Gracefully

#10
The “Truth” is Not Out There.

“My” Immutable Truths

When to Raise?

How Much to Raise?

When do you have the most negotiating power?

Choose your Investor (or VC firm) carefully.

Choose your individual VC carefully.

VCs: Traditionally Not
Founder-Friendly

Choose your attorney carefully.

Guard Board Composition with your Life!

What do you say when you are asked about valuation?

Options and Option Pool

Summer – everything shuts down.

Know when it’s time to go.

Questions?
Margaret Wallace
margaret@playmatics.com
@margaretwallace

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10 Immutable Truths of Entrepreneurship (Updated Keynote)

by Margaret Wallace on Jan 22, 2011

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