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It’s not uncommon for me to see a startup business plan “mission” to be the “premier brand” for their product, yet their marketing budget in the financials is trivial. This combination will almost certainly get your plan tossed by potential investors, who understand all too well the need and cost for marketing in today’s environment.
When questioned, founders usually mention word-of-mouth, viral marketing, and a top quality product. These founders need a reality check on what recognized brand names have spent to reach that threshold, and how long it is likely to take. Viral marketing costs real money these days, which usually means adding at least an extra zero to budget estimates. Read more
While it sounds tautological, the most important thing a law firm brings to the startup table is…a knowledge of the law surrounding everything having to do with founding, financing and operating a startup!
But while obvious, that doesn’t make it any less important. There are an enormous number of laws that cover the world of business, and those go up almost exponentially once you start dealing with fundraising/financing. Many times I have seen startups skimp on legal expenses in the early days, only to learn the very costly lesson that a lot of work had to be done over again, and in some cases even jeopardized the company’s very existence. The peace of mind that comes from knowing that a firm like WSGR or White & Williams has your back is extraordinarily liberating. Trust me. Read more
The best way for a VC to mitigate conflicts between portfolio companies is to avoid investing in direct competitors in the first place! While this can be a bit difficult for seed funds with very large portfolios and limited direct day-to-day involvement, most larger funds are careful to avoid directly competitive investments. The reason for this is simple: why have part of your investment in one company be used for the sole purpose of fighting against part of your investment in another one? Read more
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If I had a dollar for every time someone has said to me, “One of these days, I’m going to start my own company,” I’d be rich. If this day ever comes for all these people, we will be overrun by startups. Yet I don’t lose any sleep over either of these possibilities.
Most people procrastinate from time to time, but I suspect that the challenge here is somewhat deeper than that. So I did my own informal survey of business books, to gather the key reasons why most people never start the journey. If you recognize yourself in any of these categories, you may be more of a “wanna be” than a real entrepreneur: Read more
There are surprisingly few such conferences, for the very good reason that there are actually relatively few such people (venture capitalists and ‘professional’ angel investors) to attend them! But that said, here are the biggest (i.e., “only” events of their type):
Angel Capital Association (US) Annual Summit
This is the big one, which rotates among different cities in the US each year. Leaders and active members of all the major North American angel groups attend this three day conference, along with a large delegation of international business angels. Sessions are all about how to improve angel investing and manage angel groups, as well as connecting with other industry players and getting technical presentations. The first day is full of optional educational seminars from The Power of Angel Investing series, developed by the Angel Resource Institute. Read more
Justin Timberlake and Andrew Garfield via Wikipedia
Most startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. Startups such as Chirpify have managed to flourish and raise millions with endorsements from folks like Lil Wayne and Snoop Lion. Others go the way of 12Society, an LA subscription commerce startup with six celebrity sponsors, but still couldn’t get any traction.
Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including “Will Work for Shoes,” a popular one by Susan J. Ashbrook, who has courted celebrities for twenty years. Read more
There are two separate and distinct sets of things that you need to look at when evaluating an offer.
The first, and most important, has to do with who the investment is from. It is impossible to over-emphasize the value of “smart money” and “good money” over “dumb money” and “evil money”. You should do at least as much diligence on your potential investor as they are doing on you. You should check references (speak with as many of their portfolio CEOs as you can, cold-calling them preferably), read everything written about them, and that they have written. Have long talks with them about what they are looking for in the relationship, what your respective ideas are when it comes to exits and long-term management of enterprise, and how much dry powder they are keeping for future follow-on investments. Above all, look for unimpeachable integrity and strong personal chemistry, so that you will both feel comfortable when there are tough decisions to be made. Read more