Both Sides of the Table

MAY 30, 2015

I’m so tired of seeing young entrepreneurs get screwed by their angel investors on convertible notes and I know I can’t convince you not to do it so I’d like to offer one simple bit of advice to help you avoid getting screwed (at least on one part of your note). When you do a convertible note with a cap that converts into the next round of funding one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels oft

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This is going to be BIG.

JUNE 1, 2015

Every other day, some startup is raising some ludicrous amount of money at some outlandish valuation. It feels like the mother of all p **g contests and tech journalists seem all too willing to play along. Is it really going to make or break your career if you're the first to Uber's Series H round, the one between the $60 billion valuation and the $90 billion valuation.

VC 301

VC entrepreneurs ventures startup 301

Tomasz Tunguz

JUNE 2, 2015

In a recent podcast , Ron Gill, the CFO of Netsuite - a $7B+ market cap company with about $600M in 2014 revenue, which provides ERP software to mid-market companies - articulated the importance of the Lifetime Value / Cost of Customer Acquisition (LTV/CAC) ratio for his company. LTV/CAC is often used to justify marketing and sales investment to acquire customers.

SaaS 43

SaaS startup health support 43

Berkonomics

JUNE 2, 2015

So your business has begun to take off. You’ve figured out your channels of distribution, pricing model and how to support your growing list of customers. Don’t be alarmed by this next statement. That’s relatively easy. You can be the one to develop a product or service, promote it, and support it when you are a small operation. But what if you need to repeat the process of positioning, selling, and supporting your product ten thousand or more times as often as you do today?

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Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. The truth is that I’ve been warning about convertible notes since 2010 it was first declared that “convertible notes have won.” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note.

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Tomasz Tunguz

JUNE 1, 2015

McKinsey developed the 9 Box Matrix in the 1970s to help GE prioritize investments across its 150 business units. Not all business units were equally attractive. Some should receive investments and others should be divested. The 9 Box Matrix evaluated business units on two dimensions: industry attractiveness and competitive strength of the business unit.

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Berkonomics

JUNE 4, 2015

This week, our guest post is by David Steakley, a past President of the Houston Angel Network, and a reformed management consultant. David is an active angel investor, and manages several angel funds in Texas. . I have a positive fetish for recurring revenue. When I hear a company pitch a business model which I believe has the potential to acquire a customer once, and keep the customer paying for a multi-year period without further marketing expense, my ears perk up.

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Both Sides of the Table

JUNE 1, 2015

*. What does it mean to be a leader? It’s relatively easier to answer that question when you’re a founder & CEO and have total control over hiring & firing. If your company is successful and valuable people generally do what you ask. It can sometimes create confusion about whether or not you’re truly a great leader or whether people feel they must just follow your orders.

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leadership mix-use development consulting 328

Tomasz Tunguz

MAY 30, 2015

As the next generation of SaaS companies achieve maturity, they have begun to serve larger and larger customers, who in addition to demanding a great product, often request services. Professional services, as they are often called, entail training and customization. For product driven startups, the decision to offer professional services is a tricky one.

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Tomasz Tunguz

JUNE 4, 2015

We may have been talking about SaaS companies for more than a decade, but we’re still just at the beginning. The legacy software companies including Oracle, Microsoft, SAP and and IBM control 83% of the market cap of software businesses, representing $830B in market cap. The largest SaaS company, Salesforce, is just about half the size of SAP, and Microsoft is 8x bigger.

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Tomasz Tunguz

JUNE 3, 2015

I’m thrilled to welcome Mina Radhakrishnan as an entrepreneur-in-residence (EIR) to Redpoint. Mina, my partner Jamie, and I got to know each other about 10 years ago at Google, where we were associate product managers all working in Marissa Mayer’s APM program. Since Google, Mina has done some amazing things. In particular, Mina was Uber’s first PM.

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