Digital Startup Process

1. Digital Entrepreneurship
Startup Process
Michael Herlache MBA
Doctorate of Business Administration Candidate 2020
Digital Entrepreneurship
Startup Process

2. Index
I. Digital Startup Process
II. Concept, Name, and Domain
III. White Label Platform and Finish Customization
IV. Build Team Through Indeed
V. Go Through Unpaid Accelerator
VI. Apply for Paid Accelerators With Team
VII. Email Proof of Concept Funds for Proof of Concept Round
VIII. Pay Bills and Get Traction
IX. Email Micro VCs for Pre-Seed Round
X. Pay More Bills and Get More Traction
XI. Email Full Stack Micro VCs for Seed Round
XII. Pay More Bills and Get to Revenue
Digital Entrepreneurship
Startup Process

3. I. Digital Startup Process
1.
Concept
(market
place or
platform
), name,
and
domain
(linked.c
om or
book.co
m)
2. White
label
platform
and
finish
customiz
ation
3.
Build/bu
y
submark
et
database
and
upload
to
platform
4. Send
welcome
emails to
database
5. Follow
up with
addition
al
personal
email
scaled
6. Follow
up with
personal
call
7. Turn
on
revenue
and get
ramen
profitabl
e when
100
users
activate
3. Build
team
through
indeed
4. Go
through
unpaid
accelera
tor (one
traction)
5. Apply
for paid
accelera
tors with
team
(f6s.com
)
6. Email
proof of
concept
funds
for proof
of
concept
round
(http://p
evcbank
er.com/
mapping
-out-
micro-
vc/)
7. Pay
Bills and
Get
Traction
8. Email
Micro
VCs for
Pre-Seed
Round
9. Pay
More
Bills and
Get
More
Traction
10.
Email
Full
Stack
Micro
VCs for
Series
Seed
Round
11. Pay
More
Bills and
Get
Revenue
Digital Entrepreneurship
Startup Process

4. II. Concept, Name, and Domain
• Concept (marketplace or platform)
• Name (Linked or Book)
• domain (linked.com or book.com)
Digital Entrepreneurship
Startup Process

5. III. White Label Platform and Finish
Customization
• White label platform (php)
• finish customization
Digital Entrepreneurship
Startup Process

6. IV. Build team through Indeed
To build a digital startup team, put positions on Indeed with the job description and the state of the
company. For example, you are going to want to use the following state of the company:
The CEO is responsible for the leadership of the M&A Nexus platform. The CEO works closely with
the CMO and lead developer to ensure that markets are being capitalized on and that capital is
being used efficiently. Finally, the CEO ensures the proper monetization of the platform.
M&A Nexus has gone through two accelerators and is now in the process of raising a Series Seed
round of financing in the amount of $500k @ $3M pre. Once funding is obtained in the next 6 to 12
months, the position becomes salaried. Until then, the position is simply through vesting equity. We
believe that M&A Nexus can obtain a return on investment through either acquisition or IPO in 5 to
7 years.
For the compensation of the team, you can use the following guide for equity and salary:
CEO: 12%
CMO: 10%
Lead Developer/CIO: 10%
CFO: 3%
Digital Entrepreneurship
Startup Process

7. IV. Build team through Indeed Continued
Make sure to put them all on vesting schedules - 4 years with a 1 year cliff.
Pre-seed (<$500k)
CEO - $2.5k - $4k
CMO - $2.5k - $4k
CTO - $2.5k - $4k
CFO - $0
Burn should not exceed a runway of 9-12 months so adjust salaries accordingly
Seed ($500k-$1.5M)
CEO - $4k-$7k
CMO - $4k-$7k
CTO - $4k-$7k
CFO - $1k-$2k
Burn should not exceed a runway of 12-18 months so adjust salaries accordingly
Series A ($1.5M+)
CEO - $7k-$8k + bonus structure
CMO - $7k-$8k + bonus structure
CTO - $7k-$15k (scale based on responsibility and burn availability)
CFO - $2k-$5k (probably don't need FT CFO until a few years in)
Digital Entrepreneurship
Startup Process

8. V. Go Through Unpaid Accelerator
• OneTraction accelerator
Digital Entrepreneurship
Startup Process

9. V. Apply For Paid Accelerators With Team
• On F6s.com
• Y Combinator, TechStars
Digital Entrepreneurship
Startup Process

10. V. Email Proof of Concept Funds for Proof of
Concept Round
• Angellist.com
• http://pevcbanker.com/mapping-out-micro-vc/
• $0-25MM
• 212 Capital Partners Florida Multi Sector
• 55 Ventures SF/NY Multi-sector
• 645 Ventures NY Multi-sector
• Accelerator Ventures SF Multi-sector
• ACE & Company Switzerland Muti Sector
• Advancit Capital Boston Multi-sector
• AF Square LA Multi-sector
• Allegro Ventures SF Multi-sector
• Arcus Ventures Chicago Multi Sector
• Arnold Capital SF Multi-sector
• Array Ventures SF Enterprise
• Base Ventures SF Multi-sector
• Bassin Ventures SF Mobile
• Bee Partners SF Multi-sector
• Belle Capital Mi Multi-sector
• Bennu SF Multi-sector
• Blackbird Ventures Australia Multi-sector
• BOLDstart VenturesNY Enterprise
• BoltBoston Hardware
Digital Entrepreneurship
Startup Process

11. V. Pay Bills and Get Traction
• Pay your team
• Get to weekly growth KPIs
Digital Entrepreneurship
Startup Process

12. V. Email Micro VCs for Pre-Seed Round
• Angellist.com
• http://pevcbanker.com/mapping-out-micro-vc/
• $25MM-$50MM
• 112.VC SF Enterprise
• 212 Capital Turkey Multi-sector
• Aligned Partners SF Enterprise
• Amplify Partners SF Enterprise
• Aperture Ventures NY Healthcare
• Arafura Ventures sf Multi-Sector
• Arena Ventures LA Multi-Sector
• Birchmere VenturesPA Multi-sector
• Bluepointe Ventures SF Multi Sector
• Blume Ventures India Multi-sector
• Bowery Capital NY Multi-sector
• Bullpen Capital SF Multi-sector
• Caffeineited Capital SF Multi-sector
• Cervin Ventures SF Enterprise
• Chicago Ventures IL Multi-sector
• Clear Venture Partners SF Enterprise
• Cloud Apps Capital Partners SF Enterprise
• Collaborative Fund LA Multi-sector
Digital Entrepreneurship
Startup Process

13. V. Pay More Bills and Get More Traction
• Pay your team increased salary
• Get to increased weekly KPIs
Digital Entrepreneurship
Startup Process

14. V. Email Full Stack Micro VCs for Series Seed
Round
• http://pevcbanker.com/mapping-out-micro-vc/
• $75MM+
• Arcus NY Multi-sector
• Bloomberg Beta SF Multi-sector
• Cue Ball Capital Boston Multi-sector
• Felicis Ventures SF Multi-sector
• Floodgate Capital Sf Multi-sector
• IA Ventures NY Multi-sector
• Kaszek Ventures Argentina Multi-sector
• Moment Ventures SF Multi-sector
• O’Reilly AlphaTech Ventures SF Multi-sector
• Obvious Ventures SF Multi-sector
• Raine Ventures SF Multi-sector
• Real Ventures Canada Multi-sector
• Silverton Partners TX Multi-sector
• SoftTech VC SF Multi-sector
• Tandem Capital SF Multi-sector
• Walden VC SF Multi-sector
• Wing Ventures SF Multi-sector
• X fund SF Multi-sector
Digital Entrepreneurship
Startup Process

15. V. Pay More Bills and Get to Revenue
• Hit weekly revenue KPIs
Digital Entrepreneurship
Startup Process

16. V. Digital Startup Funding Progression Note
• I think many entrepreneurs have no idea regarding the actual
progression of funding:
1. accelerator - $30k
2. proof of concept fund - $100k
3. micro vc (pre-seed) - $500k
4. full stack micro vc (seed) - $1.5M
5. full stack micro vc follow on (seed continued) - $4M
6. vc (series A) - $7M
Digital Entrepreneurship
Startup Process

17. V. Digital Startup Funding Progression Note
Continued
• Seed-financing landscape has become clearly segmented along the
following lines:
-Pre-seed ($500K-$1MM) – Good management team/market/solution,
little traction.
-Seed ($1MM-$2MM) – Good management team/market/solution,
early evidence of product-market fit and traction.
-Post-seed ($2MM-$4MM) – Same as above, but with fairly significant
evidence of product-market fit and tangible business specific traction
metrics.
Digital Entrepreneurship
Startup Process

18. V. Digital Startup Funding Progression Note
Continued
Proof of Concept Fund
• Typical characteristics of these funds include the following (of course,
there are exceptions):
• Typical fund sizes of $5MM-$15MM.
• Initial check sizes of $200K-$500K.
• Rarely will look to lead a round, but rather will seek the role of an active
syndicate partner.
Digital Entrepreneurship
Startup Process

19. V. Digital Startup Funding Progression Note
Continued
Micro VC
• Fund sizes of $30MM-$50MM+.
• Initial check sizes of $500K-$1MM.
• Frequently will serve in role of lead investor in seed rounds.
Digital Entrepreneurship
Startup Process

20. V. Digital Startup Funding Progression Note
Continued
Full Stack Micro VC
• Fund sizes of $75MM-$150MM.
• Initial check sizes of up to $4MM, although most commonly $1MM-
$2MM.
• Nearly always lead/price rounds.
• Frequently invest later in the seed process.
• Follow-on ability extends well past just next round of financing.
Digital Entrepreneurship
Startup Process