Alliance of Angels - Presentation Guidelines Tell Your Story Well A successful pitch is like an engaging movie trailer – it should clearly convey the gist of your business and provoke investors to engage. Be interesting, tell a memorable story, and make heavy use of visuals. 10 – 15 slides are all that’s needed. Purpose Declare what your company does in a single sentence. Problem Describe your customer’s burning pain point. Solution Describe your product and explain why it makes the customer’s pain go away. Market Size Use both tops-down and bottoms-up.Segment and identify your sweet spot. Business Model Explain how you make money.State your customer acquisition cost and lifetime value. Go-to-Market Describe your sales distribution model. Traction List current customers, partners and users, as well as your pipeline. Competition List your competitors and describe your economic moat. Team List your founders, key management and advisors. Financials Offer
Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. I am going to try to address that question in this post. First, a caveat. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. Once you have assembled a core team that is operating the business, you need to move from art to science in terms of granting employee equity. We have developed a formula that we like to use for this purpose. The first thing you do is you figure out how valuable your company is (we call this "best value"). The second thing you do is break up your org chart into brackets. When you have the brackets set up, you put a multiplier next to them. Senior Team: 0.5x Director Level: 0.25x Key Functions: 0.1x All Others: 0.05x Then you multiply the employee's base salary by the multiplier to get to a dollar value of equity.
Cutting Up the Founder’s Pie The Founders’ Pie Calculator By Frank Demmler Several weeks ago, we took a look at the founders’ pie. I noted that frequently the founding team divides 100% by the number of founders. I also cautioned that this is the WRONG WAY! I then went on to identify the factors that should be considered when making these decisions. Since then, I have had several people tell me that while what I wrote certainly made sense, it wasn’t very helpful. As a public service, I have “invented” a Founders’ Pie Calculator. Its primary benefits are that it provides a way to quantify the elements of the decision making process, and that it appears to be logical and fair. Let’s revisit the factors that should be considered. Idea The company wouldn’t exist if it weren’t for the original idea, and that is certainly worth something, BUT there’s a lot of truth in the saying, “A successful business is 1% inspiration, and 99% perspiration.” Business Plan Preparation Domain Expertise Commitment and Risk Responsibilities
How to Divide Equity to Startup Founders, Advisors, and Employees Since returning from MIT back in June I’ve been focusing on the growth of the company. It has been pretty much on mind non-stop for months now. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders The Founders’ Pie Calculator by Frank Demmler, an Associate Teaching Professor of Entrepreneurship at the Donald H. The idea behind the calculator is to come up with a weight for each of these five elements and then assign a value to each founder on a scale of 0-to-10. Equity for Board of Directors and Advisory Board When figuring out how to provide equity to advisors, you can use this chart as a guideline. Equity for Employees It’s important to figure out how much equity you give to your employees. By Nevi on VentureHacks.com Number of shares = Meaningless. All this information that I’ve gathered up here seems rather logical.
Seedhack Founders Collaboration Agreement Starting a new company requires inspiring early co-founders to join you in your efforts and then quickly establishing an environment of trust where everyone works hard and fairly shares the upside of any success. To that end, we’re launching the Seedhack Founder’s Collaboration Agreement (download here in .DOC or in .PDF ) which is designed for a newly formed team to agree on what each founder’s shareholding should be as well as how to make sure that each founder puts a continued effort throughout the lifetime of the company in order to keep their equity stake. The hope is that this document will not only help events like Seedhack, where collaboration amongst team members is key, but also any ‘back of a napkin at a cafeteria’ brainstormed startups where people put a lot of sweat equity in even before they think about forming a ‘formal’ company. A big thank you to Tina Baker from Brown Rudnick for drafting the agreement. Supporting Organizations: Usage of the document:
Projecting Online Advertising for Business Plans As a consultant to tech startups, I’ve seen entrepreneurs planning online ventures confused when it comes to projecting advertising revenue. Having done ad projections with the benefit of live models from which to extract real data, I offer the following guidelines on how you can calculate revenue projections for your business plan. Baseline Criteria: Let’s assume that for Year One you will only use third-party ad-serving networks, instead of direct selling. This is as simple as adding their code snippets to your pages, to automatically feed their ads to your site. Because it’s rare to find one service that can fill all your inventory, I recommend a primary service and a backup service. In terms of ad providers, I’ve used Contextweb for CPM and Google AdSense for CPC. Year One Assumptions: 2 CPM ad slots per page80% of your inventory filled (a common percentage with a 2-service approach)$1.20 earned per 1,000 pages viewed You start by projecting monthly page views. Future Years:
The Resource for Entrepreneurs. Build Complete Financial Statements for Your Startup Five year financial model template for fundraising and business planning for startups and entrepreneurs. Built for subscription, SaaS (consumer and enterprise), ecommerce, retail, hardware, manufacturing, marketplaces, apps, physical products, and more types of businesses. Forecast revenues, operating expenses, hiring plans, cash and runway, financial statements, funding needs, cap table, valuation, and more. Creates summaries and key reports using industry-standard metrics to help you clearly communicate your business. Made for founders, executives — CEO, CFO, COO, VP of Finance — or advisors, mentors, or consultants that need to create a model for an idea-stage, pre-seed, seed, A, or B stage company. Five year financial model template for fundraising and business planning for startups and entrepreneurs. Built for subscription, SaaS (consumer and enterprise), ecommerce, retail, hardware, manufacturing, marketplaces, apps, physical products, and more types of businesses.