Both Sides of the Table

OCTOBER 22, 2011

Today’s post courtesy of the Dave McClure school of vocabulary. About a month ago I was meeting with a seasoned entrepreneur. After 10 minutes I felt like we were old buddies because we had both been through the trenches of startup tech land and had had similar experiences. He was recounting one of his higher profile startups to me. He founded the company, raised a bunch of money, built the product and established a good reputation and market position.

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leadership board construction innovation 418

This is going to be BIG.

OCTOBER 12, 2011

Tweet. I'm sorry that I missed yesterday's Glamour Magazine panel on women in tech --if nothing else because it featured two of my favorite women in technology, Hilary Mason and Kara Swisher. They're awesome and I'd show up to hear them speak anywhere. More importantly, I know them both for a while--Hilary since August of 2007 through twitter and, of course, getting to work with her at Path 101, and Kara since I used to e-mail her about her Boomtown columns in the WSJ over ten years ago.

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Gust

OCTOBER 18, 2011

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. Below is a brief description of each of the most popular methods. Detailed descriptions will be published over the next few weeks: The Scorecard Method: This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target.

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venture capital investing investment education 174

Berkonomics

OCTOBER 7, 2011

There are several times when stakeholder loyalty is tested to the limit. For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. For investors, a subsequent down round at a lower valuation than the last, or an exit opportunity at a loss are all opportunities for the affected stakeholder to show a side that can sometimes shock an entrepreneur or CEO.

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opportunity enablement entrepreneurs founder 54

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technology

For Entrepreneurs

OCTOBER 26, 2011

Scalable pricing is a powerful tool to grow revenue in a SaaS or software business. It allows you to capture more of the revenue that your customers are willing to pay, without putting off smaller customers that are not able to pay high prices. It also provides a great way to continue to grow revenue [.].

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Both Sides of the Table

OCTOBER 11, 2011

What could you learn from looking at your competitors or other tech startups in a different way? Are you cynical about their chances in the market just because they seem to be hot in the press and that bugs you? Or you think their startup is a passing fad and yours is the real deal? I hear views like this all the time. Even if you’re right – there’s something you may be missing.

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This is going to be BIG.

OCTOBER 28, 2011

I asked a company the other day whether or not they were going to take advantage of a great event here in NYC. Its an opportunity to pitch Sony on a biz dev deal --a no brainer for nearly any company given the scope of Sony's areas of interest. ( applications are due this Monday the 31st ) The company said no because their main angel investor didn't think it was a good idea to let an audience see their pitch.

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Gust

OCTOBER 11, 2011

An “ elevator pitch ” is a concise, well-practiced description of your startup and your plan, delivered with conviction and enthusiasm, that your mother should be able to understand in the time it would take to ride up an elevator. Everybody knows about these, but few people seem to deliver a good one. A good elevator pitch is not just for an elevator discussion.

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pitching startup energy sustainability 174

Berkonomics

OCTOBER 28, 2011

You’ve surely heard of Maslow’s Hierarchy of Needs, in which Abraham Maslow laid out a human’s needs from the physiological first, to safety, then love and belonging, on to esteem and finally self-actualization. Assuming that you have now passed through a successful sale of your shares in a business, and the money is in the bank, enough to at least temporarily satisfy your needs, if not much more, you have climbed the ladder within Maslow’s Hierarchy.

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communities board opportunity entrepreneurs 66

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development

Derek Sivers

OCTOBER 23, 2011

My unwritten condition for when to exercise was this: When it’s a nice day, and I’ve finished my work, and I haven’t just eaten, and I’m feeling energetic. But of course that rarely happens, so I wasn’t exercising enough. My coach suggested I change “and” to “or”. When it’s a nice day, or I’ve finished my work, or I haven’t just eaten, or I’m feeling energetic.

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Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. Entrepreneurs sometimes assume an initial agreement with an angel is a commitment, so they start spending before any money is received. Due diligence and paperwork take time, and can change everything. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists.

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financing finance board entrepreneurs 158

Gust

OCTOBER 31, 2011

Many writers have outlined the critical success factors for product companies, like sell every unit at a profit, patent the design, and continuous product improvement. But recently I was asked about success factors for services startups, and I quickly realized that there is very little published to help the thousands of startups that fall in this category.

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Gust

OCTOBER 25, 2011

Assume you have the right factors to get angel investment: experienced team, good product-market fit, growth potential, defensibility, and a reasonable shot at a successful exit. Have you asked yourself whether that’s what you really want? Have you considered the tradeoffs? This might seem awkward on this site, suggesting that you don’t want angel investment.

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angel investing investing investment board 133

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Gust

OCTOBER 12, 2011

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies.

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investing investment networking ventures 125

Gust

OCTOBER 18, 2011

The man stopped talking, finally, summarized his pitch, and thanked us for listening. We sat in stunned silence. He’d treated us – a group of local investors – to a pitch punctuated with detailed stories of how previous partners, an investor , and an attorney had screwed him. He told us he’d finally beaten them back, and was now ready to move forward with his great technology.

pitching 124

pitching investing investment technology 124

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. For those playing at home, you may find it helpful to download the sample term sheet from my firm’s website and follow along with the commentary.

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financing finance angel investing investing 79

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. Readers may find it helpful to download the sample term sheet from my firm’s website and follow along with the commentary.

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financing finance construction investing 107

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B2B marketing

Gust

OCTOBER 24, 2011

In the world of business, you only get one chance for a great first impression. The stakes are high – you are asking an investor for money, a customer for an order, or another executive for a partnership. Badly written letters, long rambling or emotional emails, or an obvious lack of spell checking will brand you as a poor business risk before the message is even considered.

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culture education development 102

Gust

OCTOBER 6, 2011

In my conversations with people in the startup world – from angel investors through entrepreneurs and employees with vast startup experience – I often hear about their perceptions of the marketing role as being pretty limited to acquisition. It is shocking to me how prevalent this POV is. I can’t count the times I heard people saying that “product development defines the product, and marketing gets the customers”.

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development innovation entrepreneurs startup 87

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” For convertible notes, the only liquidity event we need be concerned with is an acquisition of the startup in the near future, before the maturity date; otherwise, the notes will convert to equity of one kind or another, and the eventual sale of that equity (in a public offering, acquisition, or private sale) is a different subject for anoth

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financing finance mix-use investing 79

Gust

OCTOBER 21, 2011

Of course, the most frequent question angels hear from entrepreneurs is: what’s the one key thing investors look for in the funding process? The answer is below, but don’t cheat. You have to read #3 and #2 first. These days, a million dollars goes a very long way in startup world. So long a way, in fact, that you’ll be expected to show very concrete results with it, proof that the business is really on its way.

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Speaker: Wayne Spivak - President and Chief Financial Officer of SBA * Consulting LTD, Industry Writer, and Public Speaker

The old adages that "cash is king" and "you can’t spend profits" still hold true today. But however well-known these sayings might be, it requires a change in mindset to properly implement a cash flow management system that predicts your business's runaway as accurately as possible. Key to this new mindset is understanding the difference between the Statement of Cash Flows, a historical look at the source and uses of cash, and the Cash Flow Statement, which uses transaction history and forward-l

financing

Gust

OCTOBER 31, 2011

Oddly, perhaps, one of the most difficult decisions entrepreneurs face arises once the company begins to succeed. That’s usually when the first really “strategic” potential investors start to show up, presenting the question: sell a big chuck (or all) of the company at today’s valuation, or double down and go for the life-changing money? Very obviously, each situation has to be evaluated independently.

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entrepreneurs technology angel investing strategy 70

Gust

OCTOBER 14, 2011

Of course, Steve Jobs left us a lot of incredible lessons. Unfortunately, some of the really key ones, like “Be a genius”, can be tough to execute (I’ve been trying for years). But one crucial one that you can implement might be called the “Rhythm Method”: imparting a well-known beat to your product and service upgrades. Possibly the most shopworn piece of advice entrepreneurs hear these days is that constant iteration is the key to success.

culture 70

culture advice strategy entrepreneurs 70

Gust

OCTOBER 11, 2011

You decide, after reading, which of these was a really good moment and which was really bad. Moment one: the annoying interruption. It struck me at the time as an annoying interruption, ill timed, and off point. It was just a few minutes into the pitch. She, the CEO of a fledgling pharmaceutical company with a lot of intellectual property, research, management experience, was confident, rolling through slides, and building momentum.

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pitching consulting financing finance 70

Gust

OCTOBER 7, 2011

The Miss Universe contest was perhaps the most devastating loss of my life. Oh, not as a contestant… as an “all in” PR gamble that failed spectacularly and essentially bankrupted our startup. It was all so tempting. We had created the first portable 3D camera: a laser-bouncing device that captured an object’s geometry while a separate sensor grabbed the 2D image.

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pitching development startup entrepreneurs 70

Speaker: P. Andrew Sjogren, Sr. Product Marketing Manager at Very Good Security, Matt Doka, Co-Founder and CTO of Fivestars, and Steve Andrews, President & CEO of the Western Bankers Association 

PCI compliance can feel challenging and sometimes the result feels like you are optimizing more for security and compliance than you are for business outcomes. The key is to take the right strategy to PCI compliance that gets you both. In this webinar, we have a great set of panelists who will take you through how Zero Data strategies can be used as part of a well-rounded compliance and security approach, and get you to market much sooner by also allowing for payment optimization.

strategy