This document provides an overview of entrepreneurship as a career option. It discusses types of startups, when founders typically start companies, key people decisions like choosing co-founders, and what makes a business investible. Regarding types of startups, it notes some require fast growth and funding while others focus on organic growth and cash flow. When deciding on co-founders, the document discusses pros and cons of friends versus coworkers versus classmates. It also addresses splitting equity evenly versus unevenly. Finally, it outlines characteristics that make a business investible like addressing customer needs, having a scalable model, and understanding when a company may be ready to pursue investments.

1. Ravi Trivedi
Twitter: @trivediravi
Entrepreneurship as a Career Option

2. My
Background
Investments Equity Analyst Business
Development
Entrepreneur Technology Consulting
Software
Development
Education
Work

3. Overview
1) [BEFORE STARTING UP]
 Type of startup types
 When should I start?
 Wrong reasons for doing startup
2) [ KEY DECISIONS TO GET STARTED]
 Solo vs. Co-founder.
 Founders/Team Members – Friends?, Family? Prior
Coworkers?
 Roles and Rewards
3) [ INVESTIBLE BUSINESSES]
 What makes a investible business?
 Understanding Investments/Fund raising

4. BEFORE STARTING UP

5. Entrepreneurship
“ Entrepreneurship is the pursuit of opportunity
without regard to resources currently controlled..“
Howard Stevenson, Professor, Harvard Business
School

6. Types of Startups
Fast Growth, Funding
Likely Required
Organic Growth, Cash
Flow Positive
Example
Software as a Service,
Consumer Internet
Services Company, Ad
Agency, Taxi Service,
Restaurant
Revenue Spend First, Earn Later Revenue from Operations
immediately
Funding Required May be needed at later
stage for growth
Risk Higher.
[ Over 95% fail]
Moderate
Time Longer time to build a
sustainable business.
Need to commit 10 years (
5 years min.)
Building a sustainable
business requires shorter
duration

7. When should I leap
• No right answer
Right after College– Minimum opportunity cost but less
experience
After lot of experience – Higher opportunity cost, but
deeper industry connections
• How can I get domain expertise in an area?
If I join a corporate environment, less control over the
work
• Remember there is a spectrum of startup
experience, with varying degrees of risk – return
• Co-founder level
• 1st Employee
• After Angel round of funding . (First outside funding)
• After Venture round of funding. (First Institutional
funding)

8. When do founders typically
leap?
Source: Noam Wasserman
Based on study of several founders, when several of the following factors converge,
likelihood of starting increases.
• No right time to startup. You should do it whenever you feel ready.

9. Suggestions to Overcome Obstacles
Source: Noam Wasserman

10. Not entirely correct reasons for doing
a Startup
Reason Why?
I want to be my
boss.
Startup requires a strong discipline. Along with
power comes great responsibility.
Want
Money/Fame
Chances of making a high return is low. Often,
Probability weighted average return is lower than
a corporate career salary.
I have a million
dollar idea
True, having passion for your idea and sector is
key. But ideas by itself are worth very little.
Execution matters.

11. KEY DECISIONS TO GET
STARTED

12. People Decisions are Key in a
Startup
 If Entrepreneurship is a battle, most casualties
stem from friendly fire or self inflected wounds.
 65% of failures in startup due to startup
management team.
 Founder conflict - second biggest reason for
startup failure. Least documented, and least
spoken about.
 #1 reason for failure - Product/Market fit. Creating a
product which no one needs AND is willing to pay.

13. Early Dilemmas/Key Decisions
These have long term impact
 Solo vs. Co-founder.
 Homogenous vs. Heterogeneous team
 Friends vs. Co-workers vs. Schoolmates
 Roles and Rewards
 No right answer. Each choice comes with its
risk/reward.

14. Solo vs. Co-founder
Solo Found When … Building a founding team …
Founder has deep human and social
capital ( and financial capital) , that is
relevant to startup’s industry
Founder has gaps in human, social
and/or financial capital
Founder has strong preference for
maintaining full control of all
decisions
Founder prefers not to do some tasks
required in early days of the startup
Founder does not need a strong
need for support or validation
Founder needs a strong desire for
support or validation
The business is small and in a slow
moving industry
The business is in a fast moving
industry
Founder prefers a collaborative style
• How many co-founders? Pros and Cons of more than
3 co-founders

15. Homogenous Teams – Pros and
Cons.
Factors Pros Cons
Human Capital Can communicate
quickly and easily,
about issues.
Likely miss a critical skill.
May decrease innovation
Social Capital May have higher
degree of influence
on common contacts.
Diversity of contacts limited, for
potential customers, hires, and
investors
Decision
Making
Decisions reached
quickly and easily
May not counterbalance each
other natural style
Risk Tolerance Similar risk tolerances
may lead to stable
partners
Varying risk levels may not
counterbalance (Gut feeling vs.
Analysis based decision making.
Value System Similar values
founder will be more
aligned in their
priorities.
May not counterbalance. E.g. A
team which believes in taking
care of employees at all cost,
may not be able to prune the
work force, when needed

16. Founding team members
Founder
Type
Friends/Fami
ly
Less stable. Have to
transition from a
social to professional
relationship
Easier to go
through the lows
together
Difficult to have
tough
discussions
Co-Workers Less endearing but
more enduring
Easier transition
from a previous
work relationship
Easier to have
tough
discussions.
Class-mates Similar to friends.
Overlapping skills.
Can use
opportunities in
school to work in a
low-risk
environment

17. Roles – Overlapping or Non [ CTO,
CEO]
Source: Noam Wasserman

18. Equity Split
Split Type Pros Cons
Equal Easy to
implement.
Lead to issue later, as rarely all people
contribute equally. CEO may have less
control
Unequal Stable in long term Upfront implementation may require
tough conversations
When to
Split
Earlier Split Later
Model Do upfront negotiation of equity
split based on perceived value
Learn about cofounders
contribution. Decide on equity
split later – 6 months or 1 year.
Pros Upfront negotiation during
starting phase (nice period).
Can work well if you have
worked with founder in startup
Informed decision about
founders contribution
Cons May lead to a feeling of
someone not pulling their
weight.
Uncertainty over persons stake.

19. BUSINESS ASPECTS
Source: Saarthi Consulting Slide Deck

20. What makes a business?

21. What makes it– bigger, & may be
investible…

22. Customer Need
Unless the idea addresses an
apparent or latent need/pain
point for a customer, it cannot be
turned into a business.

23. Customer Need - Examples
Bus Ticketing industry in India was largely
unorganized.
Consumer – Booking Buses tickets in peak
season was a Pain
Bus Operator - Inventory Management in real
time was a challenge.
Effective directory services
Consumer - Local yellow page
search with validated merchants

24. Ability to Monetize
There has to be a clear, simple
and easy way to monetize your
service/product either directly by
users or indirectly (e.g. by
advertisers etc)

25. USP / Competitive Advantage
Your edge over other players in
the market or the clear &
unambiguous Unique Selling
Proposition for your idea that
makes a difference for the
customers

26. USP – Success Stories
Quick, small loans, no
collaterals
Are they selling coffee?
30 mins or less!

27. Scalability
 Is the market big enough? Is it
Global?
 Is the idea easily scalable?
 Do we have the capability and
resources for the same?
 Are we geared for scalability right
from the start?

28. Business - Summary
Simple / Scalable Business Model focused on
serving a clear & proven customer need with a
Clear Differentiation in a
Huge & preferably Global market space with
Non-linear growth potential with an
Evidence of or existing revenue streams

29. Understanding Investments
Source: Wikipedia

30. When ?
 Idea in a slide
 Prototype Ready
 Customer Traction
 Paying Customers
 Product-Market Fit
 Multiple customer
segment
Business Model Fit

31. How Much ?
 Raise Enough to reach the next milestone
 What is the next Milestone ?
 Venture Round [ $1M and more]
 Institutional Angel Round [ $500k and less ]
 How do you know you are ready for
 Venture Round
 Institutional Angel Round

32. Milestones, Valuation and Raise

33. Summary
 Entrepreneurship is like running a marathon. (with
several 100 meter sprints in middle)
 You need to set goals
 The beginning is the best part
 Its easier to do with support
 The preparation has a huge impact
 Things you don’t expect to go wrong, will go wrong
 You are crazy to think you can do it
 Running out of money (water) is bad
 Mental game. Emotional Roller Coaster

34. Reading Material

35. Questions
 My Contact Information
 @trivediravi