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Startups by numbers - Jeff Clavier


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Startups by numbers - Jeff Clavier

  1. 1. Startup by Numbers<br />Jeff Clavier<br />Managing Partner, SoftTech VC<br />Startup by Numbers<br />7/14/11<br />
  2. 2. Short Intro<br />Jeff Clavier (@jeff)<br />French<br />C/C++ & Distributed Computing Hacking<br />Financial Services startup in 1989<br />“Traditional” VC in the Valley since 2000<br />Web 2.0 Investing<br />Angel since ’04<br />Super Angel since ‘07<br />Micro VC since ‘11<br />SoftTech VC (@softtechvc)<br />7 years old<br />3 funds (‘04, ‘07, ‘11)<br />104 investments<br />18 exits<br />50+ follow-on rounds<br />> $600M raised<br />Deploying Fund III<br />$35M<br />16 deals<br />Startup by Numbers<br />7/14/11<br />
  3. 3. A few SoftTech exits<br />7/14/11<br />Startup by Numbers<br />SoftTech VC I<br />SoftTech VC II<br />Acquired by<br />Acquired by<br />Acquired by<br />Acquired by<br />Acquired by<br />Acquired by<br />Dec 05<br />Aug 06<br />Dec 06<br />May 10<br />Dec 09<br />May 09<br />Acquired by<br />Acquired by<br />Acquired by<br />Acquired by<br />Acquired by<br />Aug 07<br />Aug 07<br />Dec 09<br />July 10<br />July 10<br />Acquired by<br />Sept 10<br />Acquired by<br />July 10<br />Acquired by<br />Dec 10<br />Acquired by<br />Apr 11<br />
  4. 4. 7/14/11<br />Startup by Numbers<br />SoftTech VC III –(Partial) Deals<br />Social Media, Real-time Web & Commerce<br />Gaming<br />“New” Areas<br />Mobile Services<br />& Infrastructure<br />Search, Local & Monetization<br />(Cloud) Services &<br />Infrastructure Services<br />
  5. 5. Startup by Numbers<br />Startup by Numbers<br />WTF?<br />7/14/11<br />
  6. 6. Example<br />Startup by Numbers<br />7/14/11<br />
  7. 7. Fair Warning<br />All this BS varies vastly from one startup to the next<br />Experience based on a sample of a few thousand Silicon Valley consumer internet startups<br />My Anti-Portfolio will show you how much of a total idiot I am <br />Your Canadian mileage may vary if you follow these advice<br />Startup by Numbers<br />7/14/11<br />
  8. 8. Example<br />Startup by Numbers<br />7/14/11<br />
  9. 9. How Many Co-Founders?<br /><ul><li> 1
  10. 10. 2
  11. 11. 3
  12. 12. 4
  13. 13. More?</li></ul>Startup by Numbers<br />It Depends!<br />7/14/11<br />
  14. 14. The Awesome Combo<br />Startup by Numbers<br />Ariel Seidman, CEO<br />D = Distribution<br />Can Market, Sell, Lead <br />Matt Crampton, CTO<br />D = Development<br />Can Build, Scale, Fix<br />David Watanabe<br />D = Design<br />Awesome UI/UX Guru<br />D<br />D<br />D<br />7/14/11<br />
  15. 15. How Many Co-Founders?<br /><ul><li> 1
  16. 16. 2
  17. 17. 3
  18. 18. 4
  19. 19. More?</li></ul>A: ≥ 1 and ≤ 4<br />Need to cover the 3 D’s<br />And then some<br />Co-founders join pre-funding, afterwards they are employees<br />Equity is not always equally distributed<br />Startup by Numbers<br />7/14/11<br />
  20. 20. How Do I Evaluate Startups?<br />Startup by Numbers<br />7/14/11<br />
  21. 21. How Do I Evaluate Startups?<br />Startup by Numbers<br />7/14/11<br />
  22. 22. Introducing the 3-asses rule<br />Startup by Numbers<br />A Smart-ass team<br />Building<br />A Kick-ass Product<br />In a Big-ass Market<br />7/14/11<br />
  23. 23. The 3-asses rule<br />Startup by Numbers<br />7/14/11<br />
  24. 24. I could stop there<br /><ul><li>The 3 D’s
  25. 25. The 3 Asses Rule</li></ul>Startup by Numbers<br />7/14/11<br />
  26. 26. How Much Money to Raise?<br />7/14/11<br />Startup by Numbers<br />How much do you<br />want to burn?<br />
  27. 27. How Much Money to Raise?<br />Funding Phase<br />Bootstrap: 0 - $100K+<br />As long as you can<br />Seed: $500K - $1.5M<br />12-18 mths<br />Series A: $3-$5M<br />2 years<br />Series B: $8-$15M<br />Startup by Numbers<br />7/14/11<br />
  28. 28. How Much Money to Raise?<br />Funding Phase<br />Bootstrap: 0 - $100K+<br />As long as you can<br />Seed: $500K - $1.5M<br />12-18 mths<br />Series A: $3-$5M<br />2 years<br />Series B: $8-$15M<br />Expenses<br />Back-end, Offices<br />Few small salaries<br />All-in: $30 to $50K/mth<br />Before PMF < $30K<br />People, Marketing, Infra<br />Startup by Numbers<br />7/14/11<br />
  29. 29. At What Valuation(s)?<br />Startup by Numbers<br />7/14/11<br />
  30. 30. At Which Founder Dilution?<br />Bootstrap<br />Incubators: 5% to 10%<br />Seed<br />Option Pool: 10 to 20%<br />Round: 20 to 25%<br />Series A<br />Round: 20 to 25%<br />Startup by Numbers<br />7/14/11<br />
  31. 31. How Much Pre-seed Traction?<br /><ul><li>Alpha release of product/service
  32. 32. Feedback from early users/customers
  33. 33. Key metrics/dashboard
  34. 34. Unit Economics
  35. 35. Comparables: LTV, RPV,rDAU
  36. 36. Rough acquisition costs per channel (SEM, Facebook, PPI,…)</li></ul>7/14/11<br />Startup by Numbers<br />
  37. 37. How Many ___ to Get Funding<br />Startup by Numbers<br />7/14/11<br />
  38. 38. How Many Slides in My Deck<br />10-12 main slides<br />0-10 backups<br />Be ready to go linear or jump back/forth<br />Don’t read/engage<br />Key points:<br />Which Problem<br />Why<br />Why you<br />Why now<br />How<br />Who else<br />How much/long<br />What for<br />7/14/11<br />Startup by Numbers<br />
  39. 39. How ManySeed Investors?<br />Find a (strong) lead<br />Expertise, Passion, Time, Rollodex<br />Syndication Footprint<br />Typical seed round (5 to 15 in cap table)<br />One to Three uVCs<br />One traditional VC if you really want to<br />Helpful angels<br />Bonus tip: Due your own Due Diligence FFS!<br />7/14/11<br />Startup by Numbers<br />
  40. 40. How Many Funds to Talk To?<br />Do your homework:<br />Fund/Angel targets<br />No competitors!<br />For each target, find trusted connection<br />You’ll need: intro paragraph, investor deck, reference list<br />Ask for help: friends, mentors, former colleagues, CEOs<br />My Answer:<br />Pre-Marketing: 5<br />Fund Raising: rolling 10, out of your list of 20/25 suspects<br />Startup by Numbers<br />7/14/11<br />
  41. 41. How Much Time to Raise?<br />Startup by Numbers<br />7/14/11<br />
  42. 42. How Much does Raising Cost?<br />Seed:<br />$5K for incorporation and convertible note<br />$20/30K for equity round<br />Other rounds:<br />$30/50K and up<br />ALWAYS USE A FUCKING LAWYER<br />FIXING AN EARLY STUPID MISTAKE MAY COST MILLIONS<br />Startup by Numbers<br />7/14/11<br />
  43. 43. How Do I Measure Progress?<br />Define key metrics<br />Establish goals<br />Implement dashboard<br />Make one or two key metrics available to everyone in the company<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Key: Cohort Analysis<br />Startup by Numbers<br />7/14/11<br />
  44. 44. How Do I See It’s Not Working?<br />Startup by Numbers<br />7/14/11<br />
  45. 45. How Do I Know It Won’t Work?<br />Startup by Numbers<br />7/14/11<br />
  46. 46. Thank You!<br />7/14/11<br />Startup by Numbers<br />