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The Startup Process   Dan Gould   Startonomics La 2009
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The Startup Process Dan Gould Startonomics La 2009

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  • 1. the startup process dan gould vp, technology fox interactive media (img cc flickr user karlequin)
  • 2. you
  • 3. here
  • 4. startup
  • 5. change the world
  • 6. build something
  • 7. make money
  • 8. (lots of easier ways)
  • 9. (img cc flickr user noelleandmike)
  • 10. (img cc flickr user casasroger)
  • 11. need you
  • 12. value
  • 13. about:me
  • 14. entrepreneur
  • 15. corridor
  • 16. failed
  • 17. good
  • 18. social interfaces machine learning
  • 19. do
  • 20. something
  • 21. janitorial functions $$$ people idea marketing resources engineering
  • 22. why?
  • 23. metric: do you know your goal? (boolean)
  • 24. idea
  • 25. matters? yes
  • 26. > execution? no
  • 27. 100% * 100% = 100% 90% * 90% = 81% 100% * 0% = 0%
  • 28. cc flickr user cayusa
  • 29. people with problems
  • 30. niche niche niche niche niche niche niche niche niche
  • 31. metric: can you show me your ideal user?
  • 32. mission
  • 33. quot;To serve the world's most engaged community.quot; (AOL 2006) dumb quot;To scout pro table growth opportunities in relationships, both internally and externally, in emerging, mission inclusive markets, and explore new paradigms and then lter and communicate and evangelize the ndings.quot;
  • 34. A Computer on Every Desk and in Every Home (1975)
  • 35. The World On Time
  • 36. Organize All the World’s Information
  • 37. people
  • 38. rst 5-10 ==
  • 39. don’t compromise
  • 40. a -> a b->c c->d
  • 41. metric: did i hire someone better than myself?
  • 42. incentivize
  • 43. options
  • 44. CEO 5-10% COO 2-5% VP 1-2% (Ind) Board .5-1.5% Director 0.3-1.2% Lead Eng 0.5-1% 5+ exp Eng .33-.66% Mgr, Jr Eng 0.1-0.33% rough post-Series A
  • 45. vesting + acceleration, etc
  • 46. founders too
  • 47. milestones
  • 48. come up with a series of milestones and break down tasks to get there e.g., product design done rst customer test beta ready
  • 49. prioritize relentlessly
  • 50. types
  • 51. right
  • 52. consulting
  • 53. lifestyle
  • 54. cash ow
  • 55. 50% of $1M or 5% of $20M
  • 56. venture-backed
  • 57. (img cc flickr user omnidirectional)
  • 58. (img cc flickr user willie_901)
  • 59. for most: VC==wrong (but it’s what I’m going to talk about)
  • 60. fundraising
  • 61. sex
  • 62. (img cc flickr user irlandainquieta)
  • 63. (some typical amounts) self ? 3Fs 10-100K angel 200K-1M vc (series a) 1-8M vc (series b) 5-25M mezz 25+M IPO $lots
  • 64. friends & family
  • 65. (img cc flickr user martin_hartland)
  • 66. angels
  • 67. successful entrepreneurs retired execs professional angels “trailblazers” angel groups
  • 68. sophisticated
  • 69. risk / reward
  • 70. equity
  • 71. Guy Kawasaki’s rule of thumb: $500K per engineer -$250K per MBA (said for series a in a better market)
  • 72. convertible disappearing in this market disappeared
  • 73. (last deals i saw for conv angel rounds w/1st-time entrepreneurs in this market before they stopped) 75% warrant coverage 50% discount 10% per month warrant coverage 20-30% discount in good market
  • 74. vc
  • 75. pensions, endowments carry
  • 76. “sure bets”
  • 77. success: 20 investments 13 op/sideways 5 2-3X 2 10X
  • 78. 10Xes pay
  • 79. only 10X potential
  • 80. 1000 plans 250 initial pitches 12 due dilligence 6 investments
  • 81. (img cc flickr user protoflux)
  • 82. (img cc flickr user bargas)
  • 83. angel portfolio entrepreneur advisor lawyer CS profs
  • 84. advisors
  • 85. advice <-> $
  • 86. pitch
  • 87. practice
  • 88. 10
  • 89. 1 hour: 20 mins - VC late 20 mins - pitch 20 mins - questions
  • 90. team
  • 91. elevator pitch
  • 92. revenue model
  • 93. customer acquisition
  • 94. competition/barriers
  • 95. amount
  • 96. milestones
  • 97. customer traction
  • 98. 1-page exec sum
  • 99. deal
  • 100. Company Value $2M
  • 101. Cash in the bank $1M Company Value $2M
  • 102. Cash in the bank $1M } $3M Company Value $2M
  • 103. before = $2M 100% Your Share
  • 104. after 33% = $2M 67% Your Share VC Share (but you did give up a bunch of rights)
  • 105. eventual size discounted for time, risk, dilution
  • 106. people risk market risk execution risk competition risk technology risk financing risk
  • 107. competition
  • 108. (img cc flickr user ohadby)
  • 109. preferred shares vetoes over sales/stock iss liquidation preferences board seats protective provisions ratchets etc.
  • 110. (img cc flickr user millzero)
  • 111. nancing = work
  • 112. success!= nancing
  • 113. success=pro ts
  • 114. pro ts products & sales
  • 115. cc flickr user davestfu

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