10. Q: How Many Series A Startups
Turn Into Unicorns? (~1%)
11. Data from ~600 companies from 500 Startups Funds I + II (2010 - 2013 cohorts)
$1-10M
Q: How Many Startups to Get 1 Unicorn?
Unicorns 50:1 | Centaurs 20:1
13. Strategy, Brand, Marketing
⢠Lots of Little Bets, Online Platforms
⢠Design, Data, Distribution
⢠Blogging, Facebook, Twitter
⢠#500STRONG: for Geeks, by Geeks
⢠Seed Fund vs Accelerator
!
⢠FUN: donât be boring (t-shirts + flip-flops)
⢠Community: from Silicon Valley to the World
⢠Conferences & Events + GeeksOnaPlane.com
14. Fundraising & Team-Building
⢠Ignorance & Inexperience
⢠New Fund, Small Fund
⢠Crazy Strategy, Crazy People
⢠No Money, No History
⢠Manufacturing a Budget
⢠Writing, Telling, Believing, Living Your Story
⢠Hustle & Humility
15. Deal Flow, Strategy & Selection
⢠Lots of Little Bets
⢠Take Lots of Small Risk, Early & Often
⢠Differentiation & Branding
⢠Revenue Emphasis, Small but Real Problems
⢠Focus on Online Platforms
⢠Hacker, Hipster, Hustler
⢠Global vs Local
17. The Lean Investor
Make lots of little bets:
⢠Start with many small âexperimentsâ
⢠Filter out failures + small wins
⢠Double-down on stuff that looks like itâs working
⢠Incubation: $0-100K (âBuild & Validate Productâ)
⢠Seed: $100K-$1M (âTest & Grow Marketing Channelsââ)
⢠Venture: $1M-$10M (âMaximize Growth & Revenueâ)
18. Investment Stage #1: â¨
Product Validation + Customer Usage
⢠Structure
â 1-3 founders
â $0-$100K investment
â Incubator environment: multiple peers, mentors/advisors
⢠Test Functional Prototype / âMinimum Viable Productâ (MVP):
â Prototype->Alpha, ~3-6 months
â Develop Minimal Critical Feature Set => Get to âIt Works! Someone Uses It.â
â Improve Design & Usability, Setup Conversion Metrics
â Test Small-Scale Customer Adoption (10-1000 users)
⢠Demonstrate Concept, Reduce Product Risk, Test Functional Use
⢠Develop Metrics & Filter for Possible Future Investment
19. Investment Stage #2: â¨
Market Validation + Revenue Testing
⢠Structure
â 2-10 person team
â $100K-$1M investment
â Syndicate of Angel Investors / Small VC Funds
⢠Improve Product, Expand Customers, Test Revenue:
â Alpha->Beta, ~6-12 months
â Scale Customer Adoption => âMany People Use It, & They Pay.â
â Test Marketing Campaigns, Customer Acquisition Channels + Cost
â Test Revenue Generation, Find Profitable Customer Segments
⢠Prove Solution/Benefit, Assess Market Size
⢠Test Channel Cost, Revenue Opportunity
⢠Determine Org Structure, Key Hires
20. Investment Stage #3: â¨
Revenue Validation + Growth
⢠Structure
â 5-25 person team
â $1M-$10M investment
â Seed & Venture Investors
⢠Make Money (or Go Big), Get to Sustainability:
â Beta->Production, 12-24 months
â Revenue / Growth => âWe Can Make (a lot of) Money!â
â Mktg Plan => Predictable Channels / Campaigns + Budget
â Scalability & Infrastructure, Customer Service & Operations
â Connect with Distribution Partners, Expand Growth
⢠Prove/Expand Market, Operationalize Business
⢠Future Milestones: Profitable/Sustainable, Exit Options