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Back to Startup basics by Rami AlKarmi

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Back to Startup Basics by Rami Al Karmi
and the secrets fo starting a successful venture

Published in: Business

Back to Startup basics by Rami AlKarmi

  1. 1. 1 Back to Startup Basics & Secrets of launching Successful Ventures Rami Al-Karmi alkarmi ramialkarmi #StartupBasics #ZINCJO
  2. 2. ootprintF start the program VENTURE LAB FastForward
  3. 3. 3 Entrepreneurship Ecosystem Entrepreneurs
  4. 4. 4 Entrepreneurship Ecosystem Entrepreneurs Venture Capital Investors
  5. 5. 5 Entrepreneurship Ecosystem Entrepreneurs Venture Capital Investors Corporations Potential acquirers Strategic investors
  6. 6. 6 Entrepreneurship Ecosystem Entrepreneurs Venture Capital Investors Corporations Potential acquirers Strategic investors Universities Professions Management Government
  7. 7. 7 Entrepreneurship Ecosystem Entrepreneurs Venture Capital Investors Corporations Potential acquirers Strategic investors Universities Professions Management Government Public Stock Market Pools of Private Capital
  8. 8. Runway ?
  9. 9. 27 Lifecycle of an Entrepreneur Idea Formation Growth Exit
  10. 10. 28
  11. 11. 29 Business Schools teach OUTDATED Startup tools
  12. 12. 30 “Valley of Death” Research Grants Development Grants (eg SBIR) Friends, Family, & Founders ($5-$50k) Angel Investors ($50-$500k) Funding Early Stage Venture Capital ($500k-$2M+) Venture Capital ($2M-$50M) Private Equity, Project Financing ($2M-$50M) IPO, Merger, or Acquisition ($2M-$50M) Stage of Venture Development Idea Basic Research Applied Research Proof of Concept Target Market Business Plan Engineering Prototypes Supplier Contracts Product Introduction Revenue Growth Production Prototypes Distribution Contracts Working Prototypes Founding Team Net Cash Flow ➡ > 95% of startups fail ➡ VCs fund 1% of submitted biz plans
  13. 13. 31 It’s all about execution of a predefined plan The Leading Cause of Startup Death Product Dev. 2 Alpha/Bet a Test 3 Launch Product 4 Where Customer? Pitch Investor 1 Customer Dev. 5 Inside the building
  14. 14. 32 No Business Plan Survives First Contact With Customers Startups/New Ventures Are Not Smaller Versions of Existing Companies Startups/New Ventures need their own tools
  15. 15. 33 From Yesterday's Outdated Tools To ... Inside the building
  16. 16. Remove the fluff
  17. 17. 35 Agile Dev. Customer Dev. Biz Model Canvas ... Today’s Tools LeanStartup Outside the building
  18. 18. 36 Business Model Canvas
  19. 19. Customer Development The Search For the Business Model Company Building Customer Discovery Customer Validation Customer Creation Pivot
  20. 20. Out of the building ! GET
  21. 21. 40 Top 20 Reasons
  22. 22. 41 #1 – Building a solution looking for a problem, i.e., not targeting a “market need” #StartupBasics42%
  23. 23. 42 #2 – Ran out of cash #StartupBasics29%
  24. 24. 43 #3 – Not the right team #StartupBasics23%
  25. 25. 44 #4 – Get outcompeted #StartupBasics19%
  26. 26. 45 #5 – Pricing/Cost Issues #StartupBasics18%
  27. 27. 46 #6 – A “User Un- Friendly” Product #StartupBasics17%
  28. 28. 47 #7 – I got this product. Now I just need a business model. #StartupBasics17%
  29. 29. 48 #8 – Poor Marketing #StartupBasics14%
  30. 30. 49 #9 – Being inflexible and not actively seeking or using customer feedback #StartupBasics14%
  31. 31. 50 #10 – Release product at the wrong time #StartupBasics13%
  32. 32. 51 #11 – Lose Focus #StartupBasics13%
  33. 33. 52 #12 – Disharmony with Investors/Co- founders #StartupBasics13%
  34. 34. 53 #13 Pivot Gone Bad #StartupBasics10%
  35. 35. 54 #14 – Lack Passion and Domain Expertise #StartupBasics9%
  36. 36. 55 #15 – Location, Location, Location #StartupBasics9%
  37. 37. 56 #16 – No Financing or Interested Investors #StartupBasics8%
  38. 38. 57 #17 – Legal Challenges #StartupBasics8%
  39. 39. 58 #18 – Do not use your connections or network #StartupBasics8%
  40. 40. 59 #19 – Burn Out #StartupBasics8%
  41. 41. 60 #20 – Failure to pivot when necessary #StartupBasics7%
  42. 42. 61 #StartupBasics
  43. 43. What’s the VC’s Motivation?
  44. 44. What’s Under the Hood?
  45. 45. Money Going In: Capital Contributions G P GP GP GP GP GP GP GPLP LPLP LP 1% of total 99% of total LP LP LP
  46. 46. Money Coming Out: Profit Sharing G P GP GP GP GP GP GP GP 20% of total 80% of total LP LP LP LP LP LP LP
  47. 47. Got Crunched Yet? Source: Bullpen Capital VENTURE CAPTIAL SERIES A CRUNCH
  48. 48. Startup Investor Ecosystem Angels & Incubators ($0-10M) “Micro-VC” Funds ($10-100M) “Big” VC Funds ($100-500M) “Mega” VC Funds (>$500M) TrueFirst Round A16ZAtomico Y-Combinator TechStars SoftTech (Clavier) Felicis (Senkut) SV Angel (Conway) SequoiaGreylock Union Square Floodgate (Maples) Foundry Incubation Seed Series A Series B Series C+ Bootstrap, KickStarter, Crowdfunding
  49. 49. Staying in Business = Raising More Funds Year1 Year3-4 Each Fund Life = 10 Years 3-4 Yrs = Seed NewCos 6-7 Yrs = Harvest & Do Followons Must raise new funds to keep investing in NewCos; once new fund is raised, NewCo funding will come from it Fund III ($150M) Fund II ($125M) Fund I ($100M) After 6-7 years in business, VC will have 3+ concurrent, active funds at any one time; only one, however, will be funding NewCos Year6-7
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