Startups
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Image by Joi via Flickr If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Don’t be embarrassed, since even professional investors are often confused these days by the new terms, as well as old terms used with new meanings. In any case, it’s time to look again at the options you really have. Recently I heard a talk by Dave McClure, a long-time angel investor, who also proclaims to be one of the “new breed” of venture capitalists in Silicon Valley, as CEO of 500Startups , which is either a micro-VC seed fund, or a startup incubator, or both.
Primer On Funding Trends for Early-Stage Startups - Martin Zwilling - Startup Professionals Musings - Forbes
Below, I link to blog posts and other online resources that offer advice for entrepreneurs. My selections are tailored for consumer Internet startups, but should be helpful to teams in other sectors. There’s a lot of information here, so don’t try to digest everything in one session. I'll update this post periodically (and mark additional links as NEW), so please share suggestions via comments, email, or Twitter .
A Compilation of the Web's Best Advice for Entrepreneurs
Figuring out how to optimize your Facebook ad campaign for the correct targeting, bidding, ad creative and budget can take a lot of trial and error. CitizenNet software automates Facebook advertising for you, so you can focus on what you do best. You only need to provide the content of your ad, CitizenNet does the rest.
Spinning Data into Marketing Gold - CitizenNet.com
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?
In this video I explain how to use an excel spreadsheet for determining statistical significance for PPC ad testing. I have included a free download of the spreadsheet as well as links to the resources used to create the spreadsheet. I used the ClickEquations blog for some inspiration and the Marketing Experiments blog , a Data Mining book , and statistically-inclined friend for some help.
PPC Text Ad Testing for Statistical Significance | PPC Prospector
Convertibility: In the event the Company consummates, prior to the Maturity Date (as defined below) an equity financing pursuant to which it sells shares of its Series [ ] Preferred Stock (the “Series [__] Preferred Stock”) with an aggregate sales price of not less than $_____________, [including][excluding] any and all convertible bridge notes which are converted into preferred stock (including the Notes issued under the Note Purchase Agreement), and with the principal purpose of raising capital (a “Qualified Financing”), then the Note shall automatically convert all principal [and accrued interest] under the Note into the Series [ ] Preferred Stock at [___]% of the price paid by investors in the Qualified Financing. The Note shall convert into shares of Series [ ] Preferred Stock on the same other terms as the other investors purchasing Series [ ] Preferred Stock in the Qualified Financing.
What does a convertible note bridge financing term sheet look like? : Startup Company Lawyer
Founder Space – connecting startups with advisors, angels & VCs
Okay, so you’re a startup and you’re launching a new website or app. How do you communicate this to users, journalists and investors? ScreenFlow makes it easy by allowing you to create screencasts, including tutorial videos, training videos, how-to lessons, marketing videos, and product demos. With ScreenFlow you can record the contents of your entire monitor while also capturing your video camera, microphone and your computer audio.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).
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. Investors see thousands of business plans each year, even in this down market.
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
If you are very bright, very tenacious, and financially well endowed, then you can start a company which you own in its entirety and in which you can hire a bright, capable, highly motivated and well-paid management team. However, if you do not fit this description entirely (I might add that, if you do not possess at least one of these attributes, you might want to re-think starting your own business), then you will likely have to bring "partners" into your company by giving them equity, i.e. some share ownership. Obviously, investors who bring money to fuel the growth of your company deserve some ownership. Similarly, key people who join you on your team, or who start the company with you, will want some form of ownership if they are making a valuable contribution for which they are not being fully paid in cash.
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. You can purchase this Excel spreadsheet for $9. One-click checkout. Instant download.
How to make a cap table - Venture Hacks
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. If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle
The Option Pool Shuffle - Venture Hacks
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.