Category Archives: Startup Life

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November 19, 2012

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Startup Life

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Repost – Being an Entrepreneur

I have not had much time for new posts lately.  I am not going to pull a “Brad Feld” (sorry Brad) and get all personal on you to explain why – don’t worry.

The “what it is like being an entrepreneur” reality check is a topic that comes up a lot for me when talking with students (mostly undergrads and MBA students at Cornell – BTW, Johnson was just ranked #7!!).  Most of us have heard the tales of difficulty and stress that come with the territory.

I read just now Mark Suster’s post from yesterday called “Entrepreneurshit.  The Blog Post on What It’s Really Like.”  Mark’s posts are often long and I usually don’t get through them completely.  I did for this one.

So, enjoy the great summary of startup life – Entrepreneurshit is an apt descriptor.

Happy Thanksgiving too!

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November 2, 2012

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Startup Life

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Startup Weekend NEXT

Steve Blank is well known and a “master” teacher of the “Lean LaunchPad” among other things.  I read recently that he never graduated from college.  Very successful entrepreneur as well.

Steve recently blogged about a new initiative that deserves our attention.  It is called Startup Weekend Next, and it is basically a four-week version of the Lean LaunchPad class with hands-on instructors and mentors.

Yet the real reason for my writing is because Steve’s post on Startup Weekend Next is literally full of incredible links to resources and information that many of you will find really valuable.  Great to have them all in one spot.

Check out the post here.  Enjoy and utilize.

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October 31, 2012

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Management, Startup Life

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Art of the Start

I was supposed to have a guest lecturer in my class talking about the new crowd funding act (which is not yet legal), but he was coming from NYC and Sandy messed up the travel plans.  BTW, in Ithaca, Sandy was basically a drizzly rain.  No damage up here.

So, I covered crowd funding (thanks to Doug Gorman for giving me a good deck to teach from) and then showed one of my favorite Guy Kawasaki videos – he classic Art of the Start.  It is 40 minutes of purely good advice for startups.  I had not seen it in a while.  It is so spot on!  And the best part is that it pre-dates all the current lean startup/business model canvas teachings and completely complements them.  I really encourage you to find the time and watch the video, particularly if you are starting a company and hope to raise capital from outside investors.  And Guy is really funny too.

Enjoy.

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October 24, 2012

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Management, Startup Life

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Startup Questions

Charlie O’Donnell posted a great set of startup questions yesterday – I just read them this morning.   Things that founders need to discuss with each other RIGHT AT THE BEGINNING:

  • What’s your equity split of this business and why?  Are we comfortable with the thinking behind that?
  • What is the scope of our business?  What is outside the scope of what we want it to do?
  • Are we allowed to do anything outside of the business?
  • What is the expected time commitment?
  • What are my roles going to be and how might that change over time in 3 months, 6 months?  Am I likely to be part of this company 3 years from now and in what capacity?
  • What happens if I get hit by a bus tomorrow?  In 6 months?  In two years?
  • How do we make decisions?  Can you outvote me?
  • Can you fire me?  Can I fire you?
  • If we fire one or the other, what do I leave with?
  • Can I speak on behalf of the company to the press?  To partners?  To investors?
  • How much money to we want to raise…now, in 6 months, 2 years, over the life of the company?
  • Would I sell this for $5mm?  $10mm?  Am I waiting for the billion dollar exit?  Are you?
  • How in love with this product am I?  Are their directions this could go that I’m not on board for?
  • What values in our employees to we want?
  • What do we value in our company culture?
  • What do you think I am best at?  What do you think I need support for?  How will you help me succeed?  How will I help you succeed?
  • How much equity are we allocating for future employees?  What do we think the first 5 hires will be?  10 hires?  20?
  • What are our personal cash needs in the short term?
  • Where do we want the business to be located?
  • What do we need from investors?   Besides money?
  • What’s your timeline before you need to see some traction on the fundraising or revenue side before you think this isn’t working?

Some of these are tough questions, but they will cut down on founder fights.  And founder fights are the leading cause of startup death.

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October 17, 2012

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Dealing with VCs, Startup Life

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Startup Company Valuations

I hosted a guest lecturer today named Doug Rowan at Johnson (for those of you not in the Cornell ecosystem, “Johnson” is how the marketing department likes us to refer to Cornell’s business school).  Doug is an older guy with lots of startup experience both as entrepreneur and investor.  He currently mentors a lot of companies at the “tiny” stage.

Doug’s lecture was on startup company valuations.  Here was his key takeaway:  the best way to look at valuations of seed or Series A companies is to consider the amount being raised and the fact that the investors will want to own between 20% – 35% of your company after they invest (assuming a priced equity round).  Period, the end.  Yeah, it is that simple.

So, you want to raise $500,000, well guess what, your pre-money valuation will be between $930,000 and $2mm.   You want to raise $1mm, then your pre-money valuation will be between $1.857mm and $4mm.  You want to raise $5mm (big first round), well just do the math.

[desired %] = (Amt to be raised)/(X+Amt to be raised)

Just put in the “desired %” and “Amt to be raised” and solve for X.  That is your pre-money (well at least one end of the range).   Doug’s view point is often right.