Notes on the acquisition process. Ten years ago, startup financing was an insider’s game. Since then, the topic has been widely discussed on blogs, to the great benefit of entrepreneurs. Comparatively little, however, has been written about the important transaction at the other end many startups’ life, acquisitions. Here are some things I’ve learned about the acquisition process over the years. – There is an old saying that startups are bought not sold.
Clearly it is better to be in high demand and have inbound interest. . – Don’t use a banker unless your company is late stage and you are selling based on a multiple of profits or revenues. . – Research the potential acquirer before the first meeting. . – Develop relationships with key people – corp dev, management, product and business unit leads. . – Don’t try to be cute. . – What you tell employees is particularly tricky. . – Understand the process and what each milestone along the way means. . – Strike while the iron is hot. . – Certain terms beyond price can be deal killers. The Four Main Things that Investors Look for in a Startup. I obviously don’t speak for all investors. But in my experience as an entrepreneur and now spending my time amongst investors I can generalize that almost all VC investments in early stage technology & Internet investments come down to just four key factors.
And they’re easy to remember because they all begin with an M: management, market, money and above all else momentum. This post was prompted by an email exchange I had with a young entrepreneur. It’s a conversation that creeps up from time-to-time. This person had been introduced to me several times by angels and I was told that I’d be the perfect seed investor.
I was interested in learning more. For a combination of reasons I didn’t end up talking with the CEO in time and the company quickly became over subscribed. So I wrote to the entrepreneur and said, “Congrats. I do understand. I understand. Not everybody agrees that entrepreneurs should take investor meetings outside of “funding season” when they’re raising capital. 1. 2. 3. Original Foursquare Investor Pitch Deck 2009. Foursquare is one of the biggest, buzziest startups in New York. Scratch that -- anywhere. The local check-in startup raised $50 million this past summer from Andreessen Horowitz and Spark Capital. It recently reached 15 million downloads and it has been rolling out tons of new features including Lists and Radar. Foursquare has come a long way in two years. What started as a self-proclaimed "part friend-finder, part social city-guide, part social-game" has become a $600 million company.
We asked cofounder Dennis Crowley for a copy of his original pitch deck so other entrepreneurs could see what Foursquare looked like in its early days. "Decks don't have to be super formal," says Crowley.
Business Risks. 5 Steps to a Successful Start-up | Inc. 5000. We're always on the lookout for entrepreneurs who get it--the leaders who are modeling what it takes to launch a successful start-up. We found a great example recently in David Klein, CEO of CommonBond, a start-up aiming to help M.B.A. students with education funding. David and his co-founders, Michael Taormina and Jessup Shean, are M.B.A. students at the University of Pennsylvania's Wharton School and are part of Wharton's Venture Initiation Program, a highly selective start-up incubator that helps Wharton entrepreneurs. CommonBond is filling a void in the student lending space by raising capital from individual investors (sometimes referred to as "crowdfunding") and providing loans to M.B.A. students, who have lower loan default rates than the broader student loan population.
In addition, CommonBond has promised to fund a year's education of a student in the developing world for each M.B.A. degree. 1. He has a clear, simple view of the company's value proposition. 2. 3. 4. 5.
Teambuilding. 7 Frugal Startup Tips from Millionaire Entrepreneurs. You don't win in business by wasting money. Even the most successful entrepreneurs pinched pennies in the early days--and many still do. Here, several multimillionaires share their best cost-cutting tips when you're trying to get your startup off the ground. 1. Cash in credit card rewards. Before the success of the George Forman grill super-charged sales at his direct-response television marketing firm, Rick Cesari became resourceful in using his credit card points to buy event tickets or thank high-performing employees by sending them on weekend getaways. Today, the founder of Seattle, Wash. Related: Three Things to Know About Business Credit Cards 2. 3. Related: Five Tips for Saving Money on Shipping 4. Related: How Small Shops Economize by Sharing Space 5. 6. Related: 10 Free Online Resources for Business Tech 7. Gwen Moran is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).
Customer Service. Pricing. Australia Salary Survey - Average Salary in Australia. Human Resources. Customer Referall Solutions. Valuation. Failing. Entrepreneurs. Cashflow. Local Networking and Angel Groups. Nail the Customer Development Manifesto to the Wall. Posted on March 29, 2012 by steveblank When Bob Dorf and I wrote the Startup Owners Manual we listed a series of Customer Development principles. I thought they might be worth enumerating here: A Startup Is a Temporary Organization Designed to Search for A Repeatable and Scalable Business Model Quite a few people have asked for a way to remember these without having to dig through the book.
So by popular demand, here’s a poster of the Customer Development Manifesto. You can order a copy here. Nail it to your wall. Listen to the post here: Download the Podcast here Filed under: Customer Development, Customer Development Manifesto. MILESTONE-BASED THINKING - a Roadmap for Setting Goals and Achieving Success. The traditional Systems Development Life Cycle (SDLC) used by many companies is activity- or task-driven.
With variations across methodologies, the traditional life cycle typically consists of the distinct phases shown in the following list: Definition; Analysis; Design; Construction; Test; Transition and Migration; Production. The term "phase" implies that each set of tasks must be completed before the next phase can begin. Typically, different teams handle each phase in the life cycle, and each phase must be heavily documented to allow for a different team to pick up the next phase. As a result, decisions freeze early and flexibility is minimized. While this model provides a useful way to categorize the types of tasks that occur throughout the development life cycle, it does not recognize or leverage the characteristics of component-based enterprise development.
Technology Marketing Blog: Key Findings From IDC's 2011 Tech Marketing Benchmarks Study. Between May 15th and July 31st, 2011, IDC's CMO Advisory Group fielded its 9th annual Tech Marketing Benchmarks Study. More than 100 tech companies representing about $850B in revenue responded, making this the CMO Advisory Group's most successful benchmarking study to date. The average revenue for companies in this data set is $9.5B, and these data include companies ranging from less than $500M to about $100B. Technology hardware, software, and services companies with both direct and indirect channel strategies are represented in the database.
The following are some key findings from IDC's 2011 Tech Marketing Benchmarks Study. Marketing investment growth in 2011 is lagging revenue growth at 3.5% and 6.5% respectively. IDC's CMO Advisory Service tracks a series of key performance indicators that marketing executives should monitor closely in their own organizations. . · The CMO Advisory Group has been championing sales enablement for the past few years.
Shoehorning startups into the VC model. Tech startups go in an out of fashion. When they’re in fashion, as they are now, entrepreneurs and VCs get lots of attention. Most of this attention focuses on things that involve money, like financings and acquisitions. For some entrepreneurs, raising venture capital becomes a goal unto itself, instead of what it should be: a heavy burden that only makes sense in certain cases. A startup should raise venture capital (or “venture-style” angel/seed funding) only if: 1) the goal is to build a billion-dollar (valuation) company, and 2) raising millions of dollars is absolutely necessary or will significantly accelerate growth.
There are lots of tech companies that are very successful but don’t fit the VC model. If they don’t raise VC, the founders can make money, create jobs, and work on something they love. If they raise VC, a wide range of outcomes that would otherwise be good become bad. The best source of capital is customers.