A Few Quick Observations on Why Many Entrepreneurs Keep “Missing the VC Boat” &  What To Do About It Steve Barsh www.steve...
Raising Capital Too Early “Premature Pitching” <ul><li>Too early? </li></ul><ul><ul><li>Too many  assumptions </li></ul></...
Out-of-Box Ideas for “De-Risking” Using Very Little Cash! <ul><li>Testing  via  cost-per-click advertising </li></ul><ul><...
Most Entrepreneurs Don’t Seem To Know The Implications Of The VC “Magic Ratios” <ul><li>VC wants 7 – 10x in 3 – 5 years pu...
A Few Quick Observations on Why Many Entrepreneurs Keep “Missing the VC Boat” &  What To Do About It Steve Barsh www.steve...
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Why Many Entrepreneurs "Miss The VC Boat" and What To Do About It - Supernova 2008

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I am going to do this quick 10 minute presentation at Supernova 2008 on Wednesday, June 18, 2008 in San Francisco. Here is the presentation via SlideShare. I'll blog the details of what's behind the slides at a later date...

The point of this presentation is that over the last few months I've seen many early stage companies making the same mistakes, and these are mistakes that I don't typically see covered in the blogosphere. So, I wanted to move the ball forward and share a few tricks/techniques that I think nearly any early stage company can use immediately.

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Why Many Entrepreneurs "Miss The VC Boat" and What To Do About It - Supernova 2008

  1. 1. A Few Quick Observations on Why Many Entrepreneurs Keep “Missing the VC Boat” & What To Do About It Steve Barsh www.stevebarsh.com  blog.stevebarsh.com steve@barsh.com  +1.215.888.2101  twitter: sbarsh
  2. 2. Raising Capital Too Early “Premature Pitching” <ul><li>Too early? </li></ul><ul><ul><li>Too many assumptions </li></ul></ul><ul><ul><li>Chasing money rather than “ de-risking ” </li></ul></ul><ul><li>Wasting time, energy & focus </li></ul><ul><li>Business is based on 3 – 7 key assumptions = risks (see CBE blog post) </li></ul><ul><li>Spend more time </li></ul><ul><ul><li>Refining extremely compelling value proposition (see “Stop Coding, Start Marketing” blog post) </li></ul></ul><ul><ul><li>“ De-risking ” the business model, e.g., </li></ul></ul><ul><ul><ul><li>Market demand </li></ul></ul></ul><ul><ul><ul><li>Differentiators </li></ul></ul></ul><ul><ul><ul><li>Pricing </li></ul></ul></ul>stevebarsh.com
  3. 3. Out-of-Box Ideas for “De-Risking” Using Very Little Cash! <ul><li>Testing via cost-per-click advertising </li></ul><ul><ul><li>Market demand is there (may have to use A/B Testing) </li></ul></ul><ul><ul><li>The right price (test multiple price points) </li></ul></ul><ul><ul><li>Positioning works / key messages (try variations) </li></ul></ul><ul><ul><li>Differentiation resonates with target market (is there “lift?”) </li></ul></ul><ul><li>SWAT team / “Rent-A-Coder” product development approach </li></ul><ul><ul><li>Build a “ good enough ” version -- get it in the hands of real users </li></ul></ul><ul><ul><li>Get “ in market ” to get feedback, results, adoption </li></ul></ul><ul><ul><li>Start collecting relevant metrics as soon as possible </li></ul></ul><ul><li>Your OOB ideas / experiments ? NITMOI. </li></ul>stevebarsh.com
  4. 4. Most Entrepreneurs Don’t Seem To Know The Implications Of The VC “Magic Ratios” <ul><li>VC wants 7 – 10x in 3 – 5 years purchasing 30 - 40% @ early stage </li></ul><ul><li>Example </li></ul><ul><ul><li>Entrepreneur wants to raise $2 million for their Series A </li></ul></ul><ul><ul><li>VC buys 40% and may assume they only own 20% at exit </li></ul></ul><ul><li>Implication for entrepreneurs? </li></ul><ul><ul><li>Just pegged exit @ $100+ million ($2 million @ 10x = $20 million, which is 20% of $100 million) </li></ul></ul><ul><li>So entrepreneur needs to show a path to… </li></ul><ul><ul><li>Traffic / customers / users (and what’s the value of each?) </li></ul></ul><ul><ul><li>Revenue (companies in that space acquired for what multiple?) </li></ul></ul><ul><ul><li>Profits (companies in that space acquired for what multiple?) </li></ul></ul>stevebarsh.com
  5. 5. A Few Quick Observations on Why Many Entrepreneurs Keep “Missing the VC Boat” & What To Do About It Steve Barsh www.stevebarsh.com  blog.stevebarsh.com steve@barsh.com  +1.215.888.2101  twitter: sbarsh

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