Different parts of the startup ride - sales, funding and hype - follow cycles. While the overall startup journey is high risk and high reward, these three cycles are predictable in many startups and always in the most valuable. Entrepreneurs can position for success in these cycles by knowing what to expect.

1. Wave Theory of Startups
@guyhturner

2. Why “wave theory”? Get ready for abstraction
2
Waves are repeatable
and predictable …
… so are startups!!!
(at least the valuable ones)

3. Universal startup truth: Time is oxygen
3
Innovate, test, sell………. QUICKLY!!!!

4. Law 1: 18 month runway cycles in three acts
with your fluctuating excitement
4
Act 1
Execute Plan A
Act 2
Execute Plan B
Act 3
Raise more $
Sign TS 18 Mos
Sign TS for
next round
Hire!!!
Fire!!!
6 Mos 12 Mos
Figure it out
YourExcitement
Kind of like dramatic arc…!!!

5. Law 2: hype = f’(your excitement)
5
Seed Series A Series B
Hype maximized when your excitement is changing the most
– in upswing because others see you talk, hire, talk, hire…
Max hype

6. Law 3: sales is a cycle too
6
Qualify RFP, Proposal Document
ContractValue(ACV)
Time
(sales cycle)
Win!
Sales repeatability and
predictability drive outsized
value in startups

7. Customer size and software type drive sales
cycle ACV and length
7
EnterpriseSB MB
Infrastructure
(database, stack)
Systems
(ERP, Acctg)
Revenue
(CRM, marketing)

8. Software that generates revenue is twice as easy to
sell and often stickier than cost reducing software
This is why we focus on revenue creating
SW… speed matters
Core Seed
Marketing
Technology
8
Sales
Enablement

9. Law 4: runway must be >> than sales cycle
9
FAILURE
SUCCESS!!!
Thelma & Louise

10. What’s an entrepreneur to do?
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11. 11
Design,lifeandsalescycles
Compression of adoption and sales cycle
Pick your vertical carefully
Very hard to compete as a startup
in long design cycle, life cycle
and/or sales cycle industries.
Example: Ford is going to integrate
your product into their next
model… 2 years from now. How do
you survive in the mean time ?!?!

12. Raise a longer runway!
18 months 30 months
Find patient investors or hug a
strategic investor
You must raise enough runway to have time for a Plan A and a Plan B.
This doubles your chances of success for only 5-10% more dilution!

13. Underprice and sell SMBs first á laACV
Small Biz Medium Biz EnterpriseThen Then
Over time, seek larger fish

14. Raise money when hype > performance
14
Seed Series A Series BStory
telling
Bad early
evidence
Plan “B”
works
Better
evidence
Plan “A”
fails
Replace
VP
Sales
Scaling
works
Hype is more volatile than performance. Investors like
performance, but hype creates scarcity and investor action.

15. Thank You
@guyhturner
@hydeparkvp
15

16. 16
A quick bit about HPVP and me
Happy to chat any time16
•Twitter: @guyhturner
•Blog: vcwithme.co
•Mgmt Consultant
•Angel
•Engineer
•Twitter: @hydeparkvp
•Seed or Series A, $1-4M rounds
•Early-stage SW at $0-2M rev rate
•Midwest focus