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

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

    • the startup process dan gould vp, technology fox interactive media (img cc flickr user karlequin)
    • you
    • here
    • startup
    • change the world
    • build something
    • make money
    • (lots of easier ways)
    • (img cc flickr user noelleandmike)
    • (img cc flickr user casasroger)
    • need you
    • value
    • about:me
    • entrepreneur
    • corridor
    • failed
    • good
    • social interfaces machine learning
    • do
    • something
    • janitorial functions $$$ people idea marketing resources engineering
    • why?
    • metric: do you know your goal? (boolean)
    • idea
    • matters? yes
    • > execution? no
    • 100% * 100% = 100% 90% * 90% = 81% 100% * 0% = 0%
    • cc flickr user cayusa
    • people with problems
    • niche niche niche niche niche niche niche niche niche
    • metric: can you show me your ideal user?
    • mission
    • 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;
    • A Computer on Every Desk and in Every Home (1975)
    • The World On Time
    • Organize All the World’s Information
    • people
    • rst 5-10 ==
    • don’t compromise
    • a -> a b->c c->d
    • metric: did i hire someone better than myself?
    • incentivize
    • options
    • 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
    • vesting + acceleration, etc
    • founders too
    • milestones
    • come up with a series of milestones and break down tasks to get there e.g., product design done rst customer test beta ready
    • prioritize relentlessly
    • types
    • right
    • consulting
    • lifestyle
    • cash ow
    • 50% of $1M or 5% of $20M
    • venture-backed
    • (img cc flickr user omnidirectional)
    • (img cc flickr user willie_901)
    • for most: VC==wrong (but it’s what I’m going to talk about)
    • fundraising
    • sex
    • (img cc flickr user irlandainquieta)
    • (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
    • friends & family
    • (img cc flickr user martin_hartland)
    • angels
    • successful entrepreneurs retired execs professional angels “trailblazers” angel groups
    • sophisticated
    • risk / reward
    • equity
    • Guy Kawasaki’s rule of thumb: $500K per engineer -$250K per MBA (said for series a in a better market)
    • convertible disappearing in this market disappeared
    • (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
    • vc
    • pensions, endowments carry
    • “sure bets”
    • success: 20 investments 13 op/sideways 5 2-3X 2 10X
    • 10Xes pay
    • only 10X potential
    • 1000 plans 250 initial pitches 12 due dilligence 6 investments
    • (img cc flickr user protoflux)
    • (img cc flickr user bargas)
    • angel portfolio entrepreneur advisor lawyer CS profs
    • advisors
    • advice <-> $
    • pitch
    • practice
    • 10
    • 1 hour: 20 mins - VC late 20 mins - pitch 20 mins - questions
    • team
    • elevator pitch
    • revenue model
    • customer acquisition
    • competition/barriers
    • amount
    • milestones
    • customer traction
    • 1-page exec sum
    • deal
    • Company Value $2M
    • Cash in the bank $1M Company Value $2M
    • Cash in the bank $1M } $3M Company Value $2M
    • before = $2M 100% Your Share
    • after 33% = $2M 67% Your Share VC Share (but you did give up a bunch of rights)
    • eventual size discounted for time, risk, dilution
    • people risk market risk execution risk competition risk technology risk financing risk
    • competition
    • (img cc flickr user ohadby)
    • preferred shares vetoes over sales/stock iss liquidation preferences board seats protective provisions ratchets etc.
    • (img cc flickr user millzero)
    • nancing = work
    • success!= nancing
    • success=pro ts
    • pro ts products & sales
    • cc flickr user davestfu