Startup Professionals Musings

JANUARY 15, 2021

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares. Failing to file, or waiting to incorporate until a first investor arrives, is a common mistake, and will lead to a nasty tax bill when you can least afford it. In the U.S.,

Startup 119

Startup Entrepreneur Acquisition Demand 119

Both Sides of the Table

MAY 28, 2018

Founder: “$8–10 million” VC: “What’s your current burn rate?” It’s true that some later-stage private equity firms like to fund “roll ups” (a company that acquires many related companies in it sector), but this is seldom the domain of VCs. It goes something like this … VC: “How much money are you raising?” Founder: “$250k / month.”

Venture Capital 247

Venture Capital Capital Funding Demand 247

Both Sides of the Table

MAY 9, 2011

Give them a large sum of equity. Maybe they get up to 10% if they joined REALLY early and were senior. Let’s be honest – even 10%. It is not uncommon to see startup founders walk before raising capital and take large pieces of equity with no vesting. I wrote about many of the early-stage startup mistakes here.

Startup 393

Startup Equity Funding Summary 393

Both Sides of the Table

MAY 13, 2018

In terms of stack ranking I recommend you force yourself to have no more than 8–10 “A’s,” 8–10 “B’s” and the balance 20–24 should be “C’s.” Then begin your process in earnest with up to 8–10 firms. Why 8–10 and not just 3–4? Remember, I was an entrepreneur for 10 years before a VC).

Venture Capital 332

Venture Capital Funding Startup Sales 332

SoCal CTO

FEBRUARY 25, 2010

Once it’s set up I recommend bringing in a co-founder and giving them 10-30% of the company depending upon when you bring them in. I advocate treating them like a co-founder in every way except when they join and how much equity they get. Mark Suster defines founder vs. cofounder a bit more in Most Common Early Start-up Mistakes.

CTO Hire 150

CTO Hire Startup Equity Sales 150

Startup Professionals Musings

SEPTEMBER 29, 2018

You will make mistakes. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. The best entrepreneurs manage cash flow ruthlessly and never delegate decisions about spending money.

Startup 89

Startup Search Engine Optimization Outsource Development Social Media 89

Startup Professionals Musings

SEPTEMBER 14, 2016

You will make mistakes. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. The best entrepreneurs manage cash flow ruthlessly and never delegate decisions about spending money.

Startup 108

Startup Search Engine Optimization Outsource Development Social Media 108

InfoChachkie

MAY 16, 2011

“Learn from the mistakes of others. During those same 25-years, I also made innumerable mistakes. Ask them to accept equity in exchange for all or a portion of their overall compensation. In Beware The Consultant , I describe how you can structure such equity-based relationships. Make Your Own Mistakes.

Startup 242

Startup Outsource Development Outsource Sales 242

Startup Professionals Musings

OCTOBER 24, 2015

One mistake many entrepreneurs make, especially with online businesses, is a fundamental misunderstanding of how interesting they need to appear to others. You know how to bootstrap a business, build it from nothing, and burn sweat-equity for long hours to push your dreams to reality. Yes, you are a fascinating person.

Entrepreneur 106

Entrepreneur Customer Custom Mentor 106

Startup Professionals Musings

OCTOBER 5, 2014

You will make mistakes. Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. The best entrepreneurs manage cashflow ruthlessly and never delegate decisions about spending money.

Entrepreneur 105

Entrepreneur Search Engine Optimization Outsource Development Social Media 105

Both Sides of the Table

APRIL 25, 2011

A great recent example of this was a successful group of entrepreneurs who had created a company that will do $10-12 million in revenue at their system integration business (read: services business) in 2011 after having done $5 million or so in 2010 and $2-3 million in 2009. This is a huge mistake. A few problems arise.

Services 332

Services Venture Capital IP Startup 332

Both Sides of the Table

AUGUST 18, 2009

To be clear – it is not about being stingy with or hoarding equity – it is about having a prenuptial agreement. I believe that it very important to spread the equity. He was concerned that I had set the impression that founders should hoard their equity or that there were prescribed numbers to hand out.

Startup 251

Startup Equity Venture Capital Entrepreneur 251

Startup Professionals Musings

MAY 18, 2015

When an entrepreneur first incorporates his or her business, he or she may find him or herself the proud owner of 10 million shares of common stock, commonly called founder’s shares. Failing to file, or waiting to incorporate until a first investor arrives, is a common mistake, and will lead to a nasty tax bill when you can least afford it.

Startup 99

Startup Entrepreneur Acquisition Demand 99

Both Sides of the Table

DECEMBER 1, 2009

Once it’s set up I recommend bringing in a co-founder and giving them 10-30% of the company depending upon when you bring them in. I advocate treating them like a co-founder in every way except when they join and how much equity they get. Your company of 10 people doesn’t need 5 that are like you. Plug your holes.

Startup 289

Startup Venture Capital Entrepreneur Sales 289

Startup Professionals Musings

NOVEMBER 1, 2014

They want to share your satisfaction in success, maybe as a reward for their own mistakes and learning earlier in life in their own businesses. Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold. Supportive co-founder and executive positions.

Entrepreneur 106

Entrepreneur Technical Review Software Review Report 106

socalTECH

DECEMBER 11, 2017

The top 10 companies only make up 45 percent of the entire space. We sold that to a very large private equity company. One of the mistakes that most startups make, is they get impatient, and throw lots of capital at something. The industry is relatively large, near $60 billion in revenues, but it's heavily fragmented.

Startup 174

Startup Metrics Customer Custom 174

Both Sides of the Table

OCTOBER 22, 2009

Bringing in a senior person who’s “done it all before&# is often a mistake in a startup. He’s joining you because your company offers him/her the hope of the big equity package but likely the step forward in his career that he’s been looking for. I had given him a small equity stake in my company.

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Startup Sales Class CIO 327

Startup Professionals Musings

OCTOBER 23, 2017

Of course, the right ones cost may you equity, but a small percentage of a big business is worth far more to you than a large chunk of nothing. Don’t repeat the mistakes of others. Marty Zwilling First published on Inc.com on 10/09/2017. Find a partner who has dealt with the realities of technology, tools, and financing.

Help 66

Help Startup Course Technical Review 66

Tech Zulu Event

MARCH 16, 2015

Expect to be diluted by 20-25% with each equity round. They’re typically issued at a 10-20% discount to equity depending on the timeframe; higher range is for longer timeframes. Saying that you have no competitors is one of the biggest mistakes you can make. Seed stage valuations can be all over the map.

Startup 40

Startup Venture Capital Equity Funding 40

Both Sides of the Table

APRIL 19, 2011

Don’t and you might make one catastrophic mistake that leaves you in the annals of Effed Companies. Mark: 10% warrant coverage is like stock options. If you need money to even hire a developer [means you cannot even excite one person to put in some sweat equity – not a good sign about your ability to motivate people.].

Acquisition 304

Acquisition Startup Customer Custom 304

Both Sides of the Table

JANUARY 1, 2016

If you have a team of 10 people then by definition 90% of the time spent on activities is not put in by you and on a team of 100 it’s 99%. In fact, 90% of our investments are either Seed or A-round investments (10% are B-round). You don’t have unlimited equity to dole out. It’s important to get buy in.

Startup 150

Startup Coach Course Invest 150

Both Sides of the Table

NOVEMBER 19, 2009

They are quick to spot their mistakes and correct. He was a really nice and personable guy who had deep domain knowledge in an industry that he’d worked in for 10 years that is in need of technological advancement. He would have found somebody technical and inspired that individual to work for equity or deferred payment.

Entrepreneur 414

Entrepreneur Technical Review Slides CTO Coach 414

Both Sides of the Table

APRIL 6, 2014

But your job is to avoid having to correct PURE mistakes (previously undetected recruiting errors) and it’s significantly less costly if you catch in in the recruiting process rather than afterwards. I know that in later-stage growth equity deals some firms even hire third-parties who will do the reference calls.

Startup 302

Startup Technical Review Entrepreneur Report 302

InfoChachkie

OCTOBER 24, 2011

New hires in a depressed economy also tend to be more willing to accept below-market salaries in exchange for equity-based compensation. This does not give you a license to only work 10-hour days and take off both days every weekend. A market downturn slows the velocity of everyone’s efforts. Bargains Galore. Author unknown.

Company 257

Company Companies Startup Study 257

Tech Coast Venture Network

MARCH 9, 2011

Investors and entrepreneurs who won at the fundraising game during and after the Great Recession offer advice on landing equity money. ” He advises entrepreneurs to appear coachable by avoiding the following rookie mistakes: 1. By Monica Mehta. “Most have a strong desire to mentor and help build companies.”

Tips 100

Tips Capital Tech Coast Angels Screening 100

InfoChachkie

FEBRUARY 24, 2011

10) Seth, why does the world need SocialStay? . Yeah, I have made plenty of mistakes in this category in the past. In the beginning, when there is nothing, it’s easy to make promises or throw around equity. 10) Seth, why does the world need SocialStay? . It drives revenue & engages guests." Write it down….

Startup 233

Startup Design Mobile Social Network 233

socalTECH

MARCH 6, 2017

I told him--you are a top 10 guy worldwide, when it comes to understanding mobile applications, how to acquire them, how to improve monetization, and how to improve the user experience on those apps, and I thought our skill sets would be complementary. I told him, that we should figure out something to do together.

Media 153

Media Mobile Startup Acquisition 153

Both Sides of the Table

JANUARY 21, 2010

I write about some of the lessons in my post on Startup Mistakes. You never got around to agreeing exact equity splits but you had many conversations about it. This is one of the biggest source of future problems for the company. I wonder how the shunned three are going to feel when you make your millions?

Startup 318

Startup IP Southern California Entrepreneur 318

Alon Schwartz

JANUARY 18, 2009

Last night Jason Nazar, my partner and CEO of Docstoc hosted a session on 10 mistakes people make when starting a business. In the Q&A session someone asked about how to split equity between partners. Having the right partner can greatly help at challenging times like equity splits. What is a Partnership?

Startup 58

Startup Equity Tips Commerce 58

Alon Schwartz

JANUARY 18, 2009

Last night Jason Nazar, my partner and CEO of Docstoc hosted a session on 10 mistakes people make when starting a business. In the Q&A session someone asked about how to split equity between partners. Having the right partner can greatly help at challenging times like equity splits. What is a Partnership?

Startup 56

Startup Equity Tips Commerce 56

Alon Schwartz

JANUARY 18, 2009

Last night Jason Nazar, my partner and CEO of Docstoc hosted a session on 10 mistakes people make when starting a business. In the Q&A session someone asked about how to split equity between partners. Having the right partner can greatly help at challenging times like equity splits. What is a Partnership?

Startup 40

Startup Equity Tips Commerce 40

SoCal CTO

SEPTEMBER 8, 2010

Why MOST smart people are better at solving other people’s problems… - Life Beyond Code , August 10, 2010 And, not their own problems. I've gotten to be a lot more productive as a programmer since I started casually 15+ years ago and seriously about 10 years ago. equity debate. made all of these mistakes in my first companies.

Startup 191

Startup Venture Capital Blogging CTO Hire 191

SoCal CTO

DECEMBER 1, 2010

Equity-Only CTO and Equity-Only Developers - SoCal CTO , November 1, 2010 I had a recent email dialog with the founder of a company looking for a CTO for their startup. Five Reasons You Haven’t Launched - Software By Rob , November 10, 2010 Photo by stevendepolo. billion dollar mistake. But I don’t think so. call to arms.

Technical Review 175

Technical Review Startup Product Technology 175

Frank Addante

APRIL 16, 2007

Most of the veterans from the first online advertising revolution 7-10 years ago are likely sitting on yachts counting their payouts. However, make no mistake about it, Google is very much a competitor to any publisher. So, now the large networks are revolting against the GoogleClick deal.

Google 40

Google Advertising Startup Venture Capital 40

InfoChachkie

JUNE 25, 2009

Some startup attorneys will accept a portion of their initial fees in the form of equity. When you hit the inevitable bumps in the road, a lawyer who has an equity stake in your business is more likely to be flexible with respect to payment terms and more willing to give you quick, off-the-clock feedback and guidance.

Technical Advisors 124

Technical Advisors Technical Review IP Patents 124

Tech Zulu Event

AUGUST 13, 2010

10 ways to profit off of Twitter participation without a book deal, sponsorship or selling your star. DIY Online Workshops: Best Practices and Worst Mistakes. How to Avoid These Mistakes in Your Startup. Equity vs. Debt: What's Best for My Startup. Eleven Key Mistakes Every Startup Can Avoid. VCs: Friends or Foes?

Guide 69

Guide Startup Venture Capital Entrepreneur 69

SoCal CTO

JANUARY 5, 2011

Steve Blank , January 25, 2010 10 Tips for Adding Game Mechanics to a Non-Gaming Service - ReadWriteStart , September 21, 2010 Startups & VCs: Learn How to Design, Market, & Eat Your Own. - First Principles.

Startup 378

Startup Venture Capital Blogging CTO Coach 378