1. 1
Back to Startup Basics
& Secrets of launching
Successful Ventures
Rami Al-Karmi
alkarmi
ramialkarmi
#StartupBasics
#ZINCJO

2. ootprintF
start
the program
VENTURE LAB
FastForward

3. 3
Entrepreneurship Ecosystem
Entrepreneurs

4. 4
Entrepreneurship Ecosystem
Entrepreneurs
Venture Capital
Investors

5. 5
Entrepreneurship Ecosystem
Entrepreneurs
Venture Capital
Investors
Corporations
Potential acquirers
Strategic investors

6. 6
Entrepreneurship Ecosystem
Entrepreneurs
Venture Capital
Investors
Corporations
Potential acquirers
Strategic investors
Universities
Professions
Management
Government

7. 7
Entrepreneurship Ecosystem
Entrepreneurs
Venture Capital
Investors
Corporations
Potential acquirers
Strategic investors
Universities
Professions
Management
Government
Public Stock
Market
Pools of
Private
Capital

26. Runway ?

27. 27
Lifecycle of an Entrepreneur
Idea Formation Growth Exit

28. 28

29. 29
Business
Schools teach
OUTDATED
Startup
tools

30. 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

31. 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

32. 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

33. 33
From Yesterday's Outdated Tools
To ...
Inside the building

34. Remove the fluff

35. 35
Agile
Dev.
Customer
Dev.
Biz Model
Canvas
... Today’s Tools LeanStartup
Outside the building

36. 36
Business Model Canvas

37. Customer Development
The Search For the Business Model
Company
Building
Customer
Discovery
Customer
Validation
Customer
Creation
Pivot

38. Out of the building !
GET

40. 40
Top 20 Reasons

41. 41
#1 – Building a solution
looking for a problem,
i.e., not targeting a “market need”
#StartupBasics42%

42. 42
#2 – Ran out of
cash
#StartupBasics29%

43. 43
#3 – Not the right
team
#StartupBasics23%

44. 44
#4 – Get
outcompeted
#StartupBasics19%

45. 45
#5 – Pricing/Cost
Issues
#StartupBasics18%

46. 46
#6 – A “User Un-
Friendly” Product
#StartupBasics17%

47. 47
#7 – I got this
product. Now I just
need a business
model.
#StartupBasics17%

48. 48
#8 – Poor Marketing
#StartupBasics14%

49. 49
#9 – Being inflexible
and not actively
seeking or using
customer feedback
#StartupBasics14%

50. 50
#10 – Release
product at the wrong
time
#StartupBasics13%

51. 51
#11 – Lose Focus
#StartupBasics13%

52. 52
#12 – Disharmony
with Investors/Co-
founders
#StartupBasics13%

53. 53
#13 Pivot Gone Bad
#StartupBasics10%

54. 54
#14 – Lack Passion
and Domain
Expertise
#StartupBasics9%

55. 55
#15 – Location,
Location, Location
#StartupBasics9%

56. 56
#16 – No Financing
or Interested
Investors
#StartupBasics8%

57. 57
#17 – Legal
Challenges
#StartupBasics8%

58. 58
#18 – Do not use
your connections or
network
#StartupBasics8%

59. 59
#19 – Burn Out
#StartupBasics8%

60. 60
#20 – Failure to pivot
when necessary
#StartupBasics7%

61. 61
#StartupBasics

63. What’s the VC’s Motivation?

65. What’s Under the Hood?

70. 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

71. 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

72. Got Crunched Yet?
Source: Bullpen Capital
VENTURE CAPTIAL SERIES A CRUNCH

73. 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

74. 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

75. 75

76. 76

77. 77

78. 78

79. 79

80. 80