9 Common Startup Mistakes + Things to Know About Venture Capital for First-Time Entrepreneurs (Startup Weekend)

9 Common Startup Mistakes + Things to Know About Venture Capital MICHAEL GAISS Senior Vice President, Highland Capital Partners [email_address] | @michaelgaiss Startup Weekend University of Michigan January 23, 2011

Background
Formed in 1988
$3 billion under management, 8 funds, backed 200+ companies
Diversified portfolio strategy
tech | internet | life sciences | consumer
seed | early | growth
20 investment professionals in Boston, Silicon Valley, Geneva, & Shanghai
About me
University of Michigan (Engineering), University of St. Thomas (MBA)
Unisys, IQ Software, Gentia Software
Entrepreneurial Initiatives + Portfolio Support + Marketing

We back entrepreneurs with big ambitions.

We back young entrepreneurs.

We love early stage.

We look to build relationships early.
Money
$15K/team
Free office space
Boston or San Fran
Mentoring
Our team + founders/CEOs
Value-Add Services
Access to our network + Summer School Curriculum + Career Network
No obligation to Highland
www.hcp.com/signup

Joshua Feast MIT Sloan School of Management Alain Chuard Stanford Graduate School of Business Motomu Shimaoka & Ann DeWitt Harvard Medical School & HBS Mike Sullivan Harvard University Matt Lauzon Babson College Victoria Ransom Harvard Business School Jeff LeBrun & John Rice University of Michigan Ross School of Business Will O’Brien MIT Sloan School of Management

If you’re not starting a company, join one of ours. www.hcp.com/careers

9 Mistakes Entrepreneurs Often Make on their First Startup Less of this More of this

#1: Didn’t research & understand the competition.

#2: Haven’t talked to customers.

#3: No repeatable customer acquisition strategy.

#4: Don’t tell a good story.

#5: Know nothing about the investors they’re pitching.

#6: Make stuff up instead of saying “I don’t know.”

#7: Seek only confirming, not dis confirming evidence.

#8: Pick advisors that are easily accessible, not relevant.

#9: Treat fundraising like it’s an end, not a means.

What First-Time Entrepreneurs Should Know about Venture Capital
Assumes:
You have a team .
You’re building stuff .
But, you need $$$ .

VC is just one of many ways to finance your startup.
Equity
Bootstrap Loans Friends & family Angels / seed firms Venture capital Growth equity Public markets Non-equity Risk Size of check Grants / Prizes

We get paid from a few home runs (are you one?). TOTAL $100.0 $315.0 $215.0 2 deals, 10x 3 deals, 3x 5 deals, 0.5x All 10 deals, 3.2x

What are the most important things to us?
Market
$1B+ addressable slice
Powerful macro drivers
Deal
Capital efficient
Milestone-based
Team
Relevant
Hungry
Product / Technology
“ Painkillers, not vitamins”
Unfair advantage

We like good ideas, but prefer great execution. Good idea Great execution

We love numbers (are you measuring everything?). Check out blogs by David Cancel and David Skok for more: www.davidcancel.com www.forentrepreneurs.com

It’s easier to get our advice than our money.

We’re here to help
Entrepreneurship Central
www.hcp.com/entrepreneurship_central
[email_address]
www.hcp.com/signup OR www.hcp.com/summer
Career Opportunities
www.hcp.com/careers
Social
Highland Entrepreneur Network – LinkedIn Group (800+ members)
Twitter: @HighlandCapital
Facebook: www.facebook.com/HighlandCapitalPartners

Startup Mistakes to Avoid + Things to Know About Venture Capital MICHAEL GAISS Senior Vice President, Highland Capital Partners [email_address] | @michaelgaiss Startup Weekend University of Michigan January 23, 2011

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9 Common Startup Mistakes + Things to Know About Venture Capital for First-Time Entrepreneurs (Startup Weekend)

by Michael Gaiss on Jan 23, 2011

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9 Common Startup Mistakes + Things to Know About Venture Capital for First-Time Entrepreneurs (Startup Weekend) — Presentation Transcript