Startups
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This post was originally published at HBR.org. What is entrepreneurship? You probably think that the answer is obvious, and that only an academic would bother to ask this question. As a professor, I suppose I am guilty of mincing words.
A Compilation of the Web's Best Advice for Entrepreneurs
Google seems to be releasing or acquiring new products almost daily. It’s one thing for a couple of programmers to hack together a side project. It’s another thing for Google to put gobs of time and money behind it. The best way to predict how committed Google will be to a given project is to figure out whether it is “strategic” or not. Google makes 99% of their revenue selling text ads for things like airplane tickets, dvd players, and malpractice lawyers.
chris dixon's blog / What’s strategic for Google?
Browse > Home / Convertible note / What does a convertible note bridge financing term sheet look like? Company: [___________], a [_______] corporation (the “Company”) Amount of Financing: Up to $______________ may be issued. Type of Security: [Secured][Subordinated] convertible notes (the “Notes”).
What does a convertible note bridge financing term sheet look like
TC Teardown: 13 Ways To Get To $10 Million In Revenues (Part I)
After last month’s TechCrunch Disrupt , and to provide a business companion to the popular “Lean Startup” customer development methodology, this TC Teardown focuses not on how one specific company makes money but rather seeks to provide a breakdown of the main general ways consumer Internet startups try to make money. Consider it a guide to Internet business models. If you are currently thinking about or are in the process of developing your own consumer startup idea, these key business models will help give you a working knowledge of what it takes to get to $10 million in revenues (assuming you have a good product that the market wants).
By Akira Hirai Your business plan is very often the first impression potential investors get about your venture. But even if you have a great product, team, and customers, it could also be the last impression the investor gets if you make any of these avoidable mistakes.
Why Business Plans Don't Get Funded
Wondering what your Pre-Money Value will be if a VC ever puts a term sheet on the table? Valuing a startup is intrinsically different from valuing established companies. Because of the high level of risk and often little or no revenues, traditional quantitative valuation methods like P/E comparables or discounting free cash flows are of little use.
High Tech Startup Valuation Estimator
Email: mike@risktaker.com I'd rather have a small piece of a big pie than a large piece of nothing! (M. Volker)
Business Basics - Equity: Dividing the Pie
Summary: A cap table lists who owns what in a startup. It calculates how the option pool shuffle and seed debt lower the Series A share price. This post includes a fill-in-the-blank spreadsheet you can purchase to create your own cap table. A capitalization (cap) table lists who owns what in a startup. It lists the company’s shareholders and their shares. This screencast walks you through our cap table:
How to make a cap table
“Follow the money card!” – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation.
The Option Pool Shuffle
Fred Wilson wrote a useful post on valuation today. It reminded me of a document I had Dave Jilk write when he was doing some work for me. I decided to write this “bladon” (Blog Add-on) post – inspired by Fred. Please read Fred’s post first – it lays the groundwork for why VCs do things this way. I’ve found that even sophisticated entrepreneurs didn’t necessary grasp how valuation math (or “deal algebra”) worked. VCs talk about pre-money, post-money, and share price as though these were universally defined terms that the average American voter would understand.
Venture Capital Deal Algebra