Startup Execution - The Founders Ventures Portfolio

1. Startup Execution
The Founders Ventures Portfolio & Notes
Michael Herlache MBA
Doctorate of Business Administration Candidate 2020
Startup Execution
The Founders Ventures Portfolio & Notes

2. Index
I. Founders Ventures
II. Ramen Profitability Plan
III. The Founders Ventures Portfolio & Notes
IV. Startup Valuation
Startup Execution
The Founders Ventures Portfolio & Notes

3. I. Founders Ventures
A proof of concept fund focused on technology ventures in the consumer/internet/mobile
sector with:
1. Large total addressable market ($10bn+)
2. Significant network effect (platform that gets better with more users and more word of
mouth the better it gets)
3. Technology/engineer oriented team (at least one technical cofounder)
4. Clear path to monetization (path to ramen profitability in year 1)
5. Exit plan (able to exit for $50M+)
***We invest before ramen profitability. Ask if a VC invests before or after ramen
profitability. If they invest after than they are playing a game of financial engineering
rather than trying to genuinely add value to startups.
Startup Execution
The Founders Ventures Portfolio & Notes

4. I. Founders Ventures
Startup Execution
The Founders Ventures Portfolio & Notes

5. I. Ramen Profitability Plan for Portfolio
1. M&A Nexus - The M&A Portal - M&A marketplace and jobs - organizing the fragmented middle market M&A
and hiring process for IB - ramen profitable is M&A advisors paying to be part of a bake off or paid sponsorship
of platform
# of users before ramen profitability turn on: 100
2. FundLinked - The Private Equity Portal - PE fund placement and jobs - organizing the fragmented PE
fundraising process and hiring process for PE - ramen profitable is PE paying to be part of bake off for LP PE
allocations or paid sponsorship of platform
# of users before ramen profitability turn on: 100
3. DegreeLinked - The Student Portal - online college applications and entry level jobs - the professionalization
of the student - organizing the college application process entry level hiring process - ramen profitable is
students applying to schools in digital format or paid sponsorship of platform
# of users before ramen profitability turn on: 100
4. Asiansbook - The Asian Portal - connecting western businesses with eastern consumption - rising middle
class in India and China - organizing markets for fragmented populations in India and China - ramen profitable
is businesses paying for advertising or paid sponsorship of platform
# of users before ramen profitability turn on: 100
Startup Execution
The Founders Ventures Portfolio & Notes

6. II. Startup Valuation
Startups at start are worth $500,000 at low and $4M to $5M at high (angel stage)
VC's are fast followers hoping that you need validation and misvalue/fail to value
terminal cash flows
If your startup has the 5 characteristics and the platform is done then worth at
least $500,000 and at high side $4-5 M. High side is determined by the strength of
the characteristics:
1. Large total addressable market
2. Significant network effect
3. Technology/engineer oriented team
4. Clear path to monetization
5. Exit plan
Startup Execution
The Founders Ventures Portfolio & Notes

7. II. The Startup Process
Startup Execution
The Founders Ventures Portfolio & Notes
1. Scalable platform finished (php)
2. Pick a growth rate (5 to 7% per week)
3. Work breakdown structure to hit growth rate (scalable
communication)
4. Personal follow up with responses with 100 users in year 1 (2 new
users per week, 10 prospect emails per week), 250 users in year 2 (4
new users per week, 20 prospect emails per week), 500 users in year 3
(8 new users per week, 40 prospect emails per week)
5. 1-3 years later, turn on revenue with subscription fee ($30 per
month), transaction fee to get ramen profitable ($3,000 per month)
6. Publicize growth rate and send this to acquirers
7. Sell company at large growth rate

8. II. The Communication Outline
Startup Execution
The Founders Ventures Portfolio & Notes
Communication = Money
Send 10 emails per week year 1. Get 2 new users per week. Get 100 users in
year 1. ($3,000 per month)
Send 20 emails per week year 2. Get 4 new users per week. Get 250 users in
year 2 ($7,500 per month)
Send 40 emails per week year 3. Get 8 new users per week. Get 500 users in
year 3. ($15,000 per month)
Use ramen profitability to take bank loan instead of VC money and grow at
your own pace.

9. II. The Communication Outline Continued
Startup Execution
The Founders Ventures Portfolio & Notes
1. Buy or build database of initial submarket and upload the database
to the platform as users. Send these users their login information and
let them know that the platform is invite only at this time and have
them click a button in the email to login which activates their profile.
2. Then follow up with personal email asking whether they received the
email and if they had a chance to login
3. Then follow up with a personal phone call to login and use the
platform

10. II. The Communication Outline Continued
Startup Execution
The Founders Ventures Portfolio & Notes
1. M&A Nexus - The M&A Portal - M&A marketplace and jobs –
1. upload PE database, and send welcome emails
2. Buy/build M&A advisor database
(https://www.privateequityinfo.com/demoadvisoryfirms.php)
(https://mergr.com/) (https://www.globaldatabase.co.uk/product/north-
america-finance-professional-database)
2. FundLinked - The Private Equity Portal
1. upload PE database and send welcome emails
2. Buy/build placement agent database
(http://www.privateraise.com/search/agentlist.php)

11. II. Understanding Users
Startup Execution
The Founders Ventures Portfolio & Notes
Understanding users and figuring out how to give them what they want
is the major priority of the startup. You have a base level platform to
work off of in order to do so.