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

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9 Common Startup Mistakes + Things to Know About Venture Capital for First-Time Entrepreneurs.
Presented at Startup Weekend - University of Michigan (Ann Arbor).

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

  1. 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
  2. Background <ul><li>Formed in 1988 </li></ul><ul><li>$3 billion under management, 8 funds, backed 200+ companies </li></ul><ul><li>Diversified portfolio strategy </li></ul><ul><ul><li>tech | internet | life sciences | consumer </li></ul></ul><ul><ul><li>seed | early | growth </li></ul></ul><ul><li>20 investment professionals in Boston, Silicon Valley, Geneva, & Shanghai </li></ul><ul><li>About me </li></ul><ul><ul><li>University of Michigan (Engineering), University of St. Thomas (MBA) </li></ul></ul><ul><ul><li>Unisys, IQ Software, Gentia Software </li></ul></ul><ul><ul><li>Entrepreneurial Initiatives + Portfolio Support + Marketing </li></ul></ul>
  3. We back entrepreneurs with big ambitions.
  4. We back young entrepreneurs.
  5. We back young entrepreneurs.
  6. We back young entrepreneurs.
  7. We back young entrepreneurs.
  8. We back young entrepreneurs.
  9. We love early stage.
  10.  
  11. We look to build relationships early. <ul><li>Money </li></ul><ul><ul><li>$15K/team </li></ul></ul><ul><li>Free office space </li></ul><ul><ul><li>Boston or San Fran </li></ul></ul><ul><li>Mentoring </li></ul><ul><ul><li>Our team + founders/CEOs </li></ul></ul><ul><li>Value-Add Services </li></ul><ul><ul><li>Access to our network + Summer School Curriculum + Career Network </li></ul></ul><ul><li>No obligation to Highland </li></ul>www.hcp.com/signup
  12. 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
  13. If you’re not starting a company, join one of ours. www.hcp.com/careers
  14. 9 Mistakes Entrepreneurs Often Make on their First Startup Less of this More of this
  15. #1: Didn’t research & understand the competition.
  16. #2: Haven’t talked to customers.
  17. #3: No repeatable customer acquisition strategy.
  18. #4: Don’t tell a good story.
  19. #5: Know nothing about the investors they’re pitching.
  20. #6: Make stuff up instead of saying “I don’t know.”
  21. #7: Seek only confirming, not dis confirming evidence.
  22. #8: Pick advisors that are easily accessible, not relevant.
  23. #9: Treat fundraising like it’s an end, not a means.
  24. What First-Time Entrepreneurs Should Know about Venture Capital <ul><li>Assumes: </li></ul><ul><li>You have a team . </li></ul><ul><li>You’re building stuff . </li></ul><ul><li>But, you need $$$ . </li></ul>
  25. VC is just one of many ways to finance your startup. <ul><li>Equity </li></ul>Bootstrap Loans Friends & family Angels / seed firms Venture capital Growth equity Public markets Non-equity Risk Size of check Grants / Prizes
  26. 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
  27. What are the most important things to us? <ul><li>Market </li></ul><ul><li>$1B+ addressable slice </li></ul><ul><li>Powerful macro drivers </li></ul><ul><li>Deal </li></ul><ul><li>Capital efficient </li></ul><ul><li>Milestone-based </li></ul><ul><li>Team </li></ul><ul><li>Relevant </li></ul><ul><li>Hungry </li></ul><ul><li>Product / Technology </li></ul><ul><li>“ Painkillers, not vitamins” </li></ul><ul><li>Unfair advantage </li></ul>
  28. We like good ideas, but prefer great execution. Good idea Great execution
  29. We love numbers (are you measuring everything?). Check out blogs by David Cancel and David Skok for more: www.davidcancel.com www.forentrepreneurs.com
  30. It’s easier to get our advice than our money.
  31. We’re here to help <ul><li>Entrepreneurship Central </li></ul><ul><ul><li>www.hcp.com/entrepreneurship_central </li></ul></ul><ul><li>[email_address] </li></ul><ul><ul><li>www.hcp.com/signup OR www.hcp.com/summer </li></ul></ul><ul><li>Career Opportunities </li></ul><ul><ul><li>www.hcp.com/careers </li></ul></ul><ul><li>Social </li></ul><ul><ul><li>Highland Entrepreneur Network – LinkedIn Group (800+ members) </li></ul></ul><ul><ul><li>Twitter: @HighlandCapital </li></ul></ul><ul><ul><li>Facebook: www.facebook.com/HighlandCapitalPartners </li></ul></ul>
  32. 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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