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Digital Entrepreneurship
The document outlines the typical process for starting a digital startup, including developing a concept and domain name, customizing a white label platform, building a team through job sites like Indeed, applying to accelerators, raising proof of concept funding, paying bills and growing traction, raising pre-seed funding from micro VCs, raising a seed round from full stack micro VCs, and generating revenue. It notes the typical progression of funding amounts from accelerators providing $30k up to seed rounds from VCs of $7M.
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Digital Entrepreneurship
- 1. Digital Entrepreneurship Startup Process MichaelHerlache MBA Doctorate of Business Administration Candidate 2020 Digital Entrepreneurship Startup Process
- 2. Index I. Digital StartupProcess 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 StartupProcess 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 LabelPlatform and Finish Customization • White label platform (php) • finish customization Digital Entrepreneurship Startup Process
- 6. IV. Build teamthrough 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 teamthrough 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 ThroughUnpaid Accelerator • OneTraction accelerator Digital Entrepreneurship Startup Process
- 9. V. Apply ForPaid Accelerators With Team • On F6s.com • Y Combinator, TechStars Digital Entrepreneurship Startup Process
- 10. V. Email Proofof 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 Billsand Get Traction • Pay your team • Get to weekly growth KPIs Digital Entrepreneurship Startup Process
- 12. V. Email MicroVCs 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 MoreBills and Get More Traction • Pay your team increased salary • Get to increased weekly KPIs Digital Entrepreneurship Startup Process
- 14. V. Email FullStack 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 MoreBills and Get to Revenue • Hit weekly revenue KPIs Digital Entrepreneurship Startup Process
- 16. V. Digital StartupFunding 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 StartupFunding 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 StartupFunding 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 StartupFunding 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 StartupFunding 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