Jason Mendelson - CUNVC Crash Course Series January 13 2010

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How to Build a Company
January 13, 2010
University of Colorado’s New Venture Challenge
Jason Mendelson, Co-Founder and Managing Director
Foundry Group; Chair, Silicon Flatirons Entrepreneurship Initiative
©2009, Foundry Group LLC, Proprietary and Confidential

Agenda
The idea of this presentation is to give you an all-purpose summary on company building. The workshop presentations later this semester will dive into all of these subjects and more in depth
How to come up with the right idea for you to pursue
Building a team
Setting up the business
Getting financed
Growing a business
Operating a business
Common mistakes people make
PLEASE INTERRUPT ME. Chances are that you are less boring than I am
1

How To Do It
2

The Idea
Pick something that you are passionate about. I mean REALLY passionate
Building a company is tough. If you aren’t in love with your idea going in, you are hosed
If you aren’t scratching your own itch, you probably don’t have a great idea
Make sure that you are “market,” though
Consider the competition. Most people skip this step
“We are different”
Are you really? Assume adjacent companies move toward each other.
Well funded “non-competitors” usually are
3

The Idea
Is a “non-competitor” really a competitor?
Facebook – generic social network. You decide to create one targeted to musicians / soccer moms, etc.
Competition might not be Facebook, but the time allocated to social networks by your customers. They only have so much. Plus, FB can quickly move to compete, if need be
Can you make money from it? (and the answer isn’t “advertising”)
When you talk to your friends, do they get excited about it? (If you don’t have any friends, then you have other issues that I can’t help you with)
Make sure you don’t have “technology in search of a problem”
Seriously vet your idea. Remember, people’s incentives are to say “go for it” – it’s not their time and money being wasted
4

Building a Team
Find a partner (if you can’t, there might be a larger problem)
Find mentors/advisors (Boulder is great)
Don’t get taken advantage of
Be self aware. It’s much more attractive than confidence
Learn to keep people engaged
5

Setting up the Business
Incorporate? LLC versus C-corp
Get your Intellectual Property in order
Get your employment situation in order
Watch out for oral promises (yes, you can have an oral contract)
You get what you pay for with lawyers, but there are tons of resources in Boulder
Use resources like BDNT, BOCC, ELC, Crash Courses, the Bunker to learn more. Knowledge is power
6

Financing
Don’t assume that you are going to raise funds
Do you need financing?
The earlier you finance the more of the company you will give up
Be greedy!
Angel versus VC
Executive Summaries versus Business Plans. What makes good ones?
Your exec summary is critical
Business plans are for you
7

Growing and Operating a Business
Constantly check your assumptions. Is your idea still compelling?
Make sure what you are building will scale
Be customer focused. Be insane about customer experience
Don’t be afraid to get help. You don’t know everything
Find smart tech guys / work in the cloud
Always think about how you will make money. Even Twitter had a plan….
Try to leverage others’ platforms / networks if you can
Be really stingy in hiring non-tech people
8

Some Common Mistakes
Not taking the set up process seriously enough
Employment
IP
Contractors versus employees
Not picking the right team. Your first 4-6 hires will determine your fate
Getting ahead on expenses – hiring ahead of revenue
Keep the team lean and expect some pain. This is good pain
Cash is massively valuable. Treat it as such
Being a crappy fundraiser
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Some Common Mistakes
Not knowing when to quit. Failure isn’t always failure
Screwing up your one chance at good press
Overpromising and under delivering
Getting “Tech Crunched”
Not having proper alignment with the management team
Get away / offsites
Vesting
Thinking marketing and advertising will save you
10

Summary
Seriously, it’s really that simple
So have fun. ☺
11

Questions and Answers
Q&A
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CU NVC: why participate?
Entrepreneurial Launch Pad: nothing like doing it; support through workshops and Crash Courses
Mentors: connect to area’s entrepreneurs
Interdisciplinary experience
“Intent to Compete” forms are due January 20 (necessary for mentor assignment)
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Upcoming Events
Workshop-Your Business Concept: Product and Service Offering, Page Moreau
Wednesday, January 20, 2010 – ATLAS 100, 6pm
Workshop-Your Market: Connecting with your Customers, Tom Keller
Wednesday, January 27, 2010 - ATLAS Building, Room 100, 6:00PM
Crash Course: Intellectual Property for Entrepreneurs
Wednesday, February 3, 2010 - Wolf Law Building, 6:00PM
Workshop-Selling your Product: Reaching Your Customers, Erick Mueller
Wednesday, February 10, 2010 - ATLAS Building, Room 100, 6:00PM
Workshop-Making Money: Finding Economic Sustainability, Frank Moyes
Workshop-Pitching and Selling Your Business Plan, George Deriso
Business Plans DUE Monday, March 11, 2010
Finalists and Wild Card Selected Friday, March 5, 2010
14

Networking Upstairs
Meet companies looking for interns
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Essential10 (not on flier)
Goldstone Partners
Gravity Cycles (not on flier)
LogRhythm
myUsearch.com
Rebit
RecordNexus
TravelFli
Zayo Group
Form a team to compete in the CU NVC!

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Jason Mendelson - CUNVC Crash Course Series January 13 2010

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Jason Mendelson - CUNVC Crash Course Series January 13 2010 — Presentation Transcript