—————Table-of-Contents—————

When the VCs say “NO” VCs really want to hear: The Equity Equation How to Negotiate a Term Sheet with a VC The Hacker’s Guide to Investors How to Fund a Startup How to Make Wealth

When the VCs say “NO”

1. Lay the groundwork to come back later
   VCs don’t say no, they say:

   “maybe”, or “not right now”, or “my partners aren’t sure”, or “that’s interesting, let me think about it”

   They think that your plan is not implementable due to the current facts. If the facts change they might be very well interested to invest.

2. Consider the environment
   A “NO” from 1 investor means nothing, a “NO” from 8 investors means your plan is seriously flawed, redo it.
3. Retool your plan
   Remove risks from your startup until the VC finds the remaining risks manageable and is willing to invest.
   
   1. Founder risk: How good is the founding team?
   2. Market risk: Will anyone want it? | Will anyone pay for it? | How much will they pay? | Competitors… | How do we know?
      
   3. Timing risk: Too early? / Too late?
   4. Financing
      risk: how many additional rounds of financing are required for the
      company to be profitable? | How certain are the estimates? | How do we
      know?
   5. Marketing risk: will it cut through
      the noise? | How much will marketing cost? | Acquiring a customer is
      cheaper than the income from a new customer?
      
   6. Distribution risk: Does it need partners?
   7. Technological risk: Is the technology available?
   8. Product risk: can the product be build? | can this team build it?
   9. Hiring risk: Will the team be able to hire good staff?
   10. Location risk: is the location suitable for the needs of the business?
4. How to retool your plan:
   1. Founder risk: maybe you have to find more founders who have all the skills your startup need
      
   2. Market risk: more detailed analysis | get some customers → prove that the market exists
   3. Competition risk: Is your USP really unique? Make sure it is! | NEVER, EVER say that you have no competition | NEVER, EVER say that you go for 2% of the market, because the companies who have the other 98% will crush you.
      
   4. Timing risk: Demonstrate that you are neither too late / too early. You will get the customers
   5. Financing risk: Plan realistically, but spend as little as possible.
   6. Marketing risk: Show that you get more revenue from each customer than it costs to acquire them.
   7. Distribution risk: If you need a distribution partner, better you have an agreement with them before you apply for financing
   8. Technology risk: get it to beta, then raise money.
   9. Product risk: same as technology risk
   10. Hiring risk: figure out what positions the VCs will be worried about and add them to the team
   11. Location risk: if that is any problem, you must move to the money.
5. What to focus on:
   1. Get your product out
   2. Get customers
   3. Recraft the pitch around the risks
      

VCs really want to hear:

(11:02)

1. Exploding market (a big market is better)
2. Customers are desperate for your solution (willing to overpay)
3. Current solutions are not good enough
4. We have best solution
5. We have the best team
6. VCs look for unique: (10:48) Product, Market, Team (which they put first depends on the VC)
7. A perfect exit strategy (IPO / sell the company)
   

The Equity Equation

the investment should increase your companies value more than the amount invested

n = % someone wants to invest
r = Expected increase in outcome
if r > 1/(1-n) take it
r > 6.4

It is not only important how much money you get, but how much the investor will be able to increase your outcome.

How to Negotiate a Term Sheet with a VC

The most important part of financing is negotiating the term sheet.

1. Get a good lawyer (better an attorney than just a lawyer)
   one who worked on both sides ( VC side and founder side)
2. Focus on terms that matter – Pick your battles
   1. Sacrifice valuation for a clean security
      The price of the startup is less important than secure terms (other investors can join in)
3. Always have a BATNA (Best Alternative To Negotiated Agreement)
   just like in Dating, have a backup plan
4. Be prepared to pay up for high quality investors
   good VCs will give you worse terms
5. Ask for references
   Ask for CEOs the VC has worked with [ ideally ones that failed ]
6. Don’t let the VC get away with negotiating a point by saying “We always do it that way”
7. Multiple investors -> demand for a lead investor
   1. keep sanity
   2. cuts legal costs
8. Deal in advance with follow-on financing
   insist on protection if an VC will not participate in a upcoming financing round.
   Pre-emptive rights = right for a VC to be the first to invest in the next round
9. Handle the term sheet negotiation carefully
   It determines your relationship with the VC
10. Say thank you
    handwritten notes can do wonders

How to Fund a Startup

1. Friends & Family
2. Angel Investors are individual rich People. Their money is not the only valuable, also their connections + knowledge.
   1. they invest much earlier than VCs
   2. you have to think about an “Exit strategy”
   3. the startup has to be valued equal for every investor
   4. Angels will invest usually with less constrictions than VCs
   5. find them through personal introduction
   6. experienced Angels are much easier to deal with
3. Seed Funding (like angles, but not individuals, but companies who invest in earliest startups)
4. Venture Capital Funds
   1. VCs will invest because they think another VC wants to invest in you (same rules like in dating)
   2. there is a VC pecking order. If you make a deal with a big VC, all the others want you as well.
   3. VCs don’t want to hear so much about your company, but more about MONEY
   4. if you get a term-sheet ask how many % those sheet get real deals
   5. have a protection against getting fired by the VC and loosing your unvested stock
   6. if you mail a business plan to a VC, make sure it is addressed to a person working there
   7. It is very tricky to decide when to approach an VC as they will:
      1. ask you: Who else did you talk to?
      2. talk amongst each other
   8. approach VCs when you have shown that users love it
   9. Several VCs interested in a company, might split the deal amongst them (more connections + more knowledge + they are all checking each other)

The Stages of Investing:

1. Seed Round: Money to get a prototype out and running
2. Angel Round: Get a working model
   1. Angels might want to have a convertible loan, that can be transformed into stock later
3. Series A Round:
   1. Who else have you talked to?
   2. Termsheet (Founder will not have contact to other VCs for some time) checking for patent infringements, design flaws, other bombs waiting to blow up.
   3. The deal falls through
   4. Next Serieas A Round…

How to Make Wealth

The rate for which one gets hired, is really the added value for the user
How hard is it for competitors to copy your technology? –> The harder it is for them the easier you get VC capital
A startup either succeeds gloriously or fails miserably as it is a high risk bet, but there is no way to absorb shocks like a big company can
You get bought not because of the potential gain of the buyer, but rather because of the fear of someone else buying you, or becoming big and more expensive or even a competitor.
Measure the success of your business by the number of users [not some technical successes].

—————Table-of-Contents—————

The Torturous World of Powerpoint You can still win How to Pitch Anything in Two Minutes Entrepreneur Pitch Workbook How to pitch: David S. Rose on pitching to VCs How to Present to Investors Pitch your Business

The Torturous World of Powerpoint

1. WHAT IS YOUR VISION?
   1. What problem are you solving and for whom?
   2. Where do you want to be in the future?
2. How big is the market opportunity you are pursuing and how fast is it growing?
   1. How established (or nascent) is the market?
   2. Do you have a credible claim on being one of the top two or three players in the market?
3. What is your product/service?
   1. How does it solve your customer’s problem?
   2. What is unique about your product/service?
4. Who are your existing customers?
   1. Who is your target customer?
   2. What defines an “ideal” customer prospect?
   3. Who actually writes you the check?
   4. Use specific customer examples where possible.
5. What is your value proposition to the customer?
   1. What kind of ROI can your customer expect by using buying your product/service?
   2. What pain are you eliminating?
   3. Are you selling a luxury, a nice-to-have, or a need-to-have?
6. What does the sales process look like and how long is the sales cycle?
   1. How will you reach the target customer? What does it cost to “acquire” a customer?
   2. What is your sales, marketing and distribution strategy?
   3. What is the current sales pipeline?
7. What is your cost to acquire a customer?
   1. How will this acquisition cost change over time and why?
   2. What is the lifetime value of a customer?
8. Who is the management team?
   1. What is their experience?
   2. What pieces are missing and what is the plan for filling them?
9. How do you make money?
   1. What is your revenue model?
   2. What is required to become profitable?
10. What is your stage of development? Technology/product? Team? Financial metrics/revenue?
    1. What has been the progress to date (make reality and future clear)?
    2. What are your future milestones?
11. What funds have already been raised?
    1. How much money are you raising and at what valuation?
    2. How will the money be spent?
    3. How long will it last and where will the company “be” on its milestones progress at that time?
    4. How much additional funding do you anticipate raising & when?
12. Who is your existing & likely competition?
    1. Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
    2. What are their strengths/weaknesses?
    3. Why are you different?
13. Who are your key distribution and technology partners (current & future)?
    1. How dependent are you on these partners?
14. How does this fit w/ the investor’s portfolio and expertise?
    1. What synergies, competition exist with the investor’s existing portfolio?
    2. What assumptions are key to the success of the business?
    3. What “gotchas” could change the business overnight? New technologies, new market entrants, change in standards or regulations?
    4. What are your company’s weak links?

You can still win

Focuse on the needs of the one you pitch to
Phrase it so they feel your pitch will help them achieve what they want (i.e. you want to support a promising business that within the next few years will either be able to do an IPO or get bought)
Keep the goal in mind (the goal is to help the person you are pitching to)
Walk in their shoes (think about what they want)
Have many different pitches (30 sec | 2 min | 20 min // have a pitch with focus on: consumer, or finance, or market, or vision…)
Create: intrigue | vision | mutual goals
Don’t tell the whole story, hone in the headlines (key points?)
Put the USB in 1 – 2 sentences
Create a good social presents
DO NOT make it about yourself
Great questions: How did you get into the business?

How to Pitch Anything in Two Minutes

1. Demonstrate enthusiasm
   1. Leave your comfort zone (record your presentation à redo it with more energy)
   2. Have fun
   3. Move your body
   4. Copy personalities
2. Find a personal connection
   Tell a personal story (make it less than 30 sec)
3. Sell the benefit
   Give examples
4. Nobody Wants a drill bit
   Don’t sell the tool, sell the result – every year, 6 million quarter-inch drill bits are sold, yet nobody wants a quarter-inch drill bit; they want a quarter-inch hole
5. Teach us something new

Entrepreneur Pitch Workbook

Pitch DNA:

• Mind the time
• Sell, don’t explain
• Showing is better than telling
• Provide use cases from the perspective of a customer
• Assemble the right team
• Cite reports to give credibility to your claim
• Story + Execution = Valuation
• Metric matter
• Convey a clear differentiator
• Tell a good clear, easy-to-repeat story
• Focus | Focus | Focus!

Tips:

• Tell a good, repeatable story
• Make sure the concept fits into the VCs portfolio (is not competing)
• Be prepared to discuss key assumptions
• Big problem = big market
• Have 1 key take-away per slide

1. Introduction [1 page]
   1. Key Objective:
      Everyone should know what the company does and the target market. The only question that should remain is: How are you doing it.
   2. Tell Us:
      1. Give a brief history of the company, when it was started, how it’s been funded.
      2. Define the company, business or product in a single sentence.
      3. Concisely state your core value proposition, including the target market.
      4. What unique benefit will you provide to what customers to address what need?
2. Team
   [1 page] Identify a core group of talent that can execute on the next
   set of milestones. Invoke confidence that your team believes in the
   company and can move forward. “Why you?”

• Who is missing → hiring plans

1. Opportunity [2-5 pages]
   (clear) Problem + (large) Market = (great) Opportunity
   Establish the need for your company’s solution and convince us that solving the problem is worth the effort.

• What is the problem? Describe the pain
  1. Why does the problem persist?
  2. Recent Trends
  3. How is it currently addressed?
  4. Why are we at an inflection point now?
  5. Who is the customer?
• Market Size
  1. How much is spend on the problem today?
  2. Start with the economics of 1 customer (# of customers) x (% who buy each year) x (avg amount spent annually) = market size
  3. Calculate the TAM (top down), SAM (bottom up)
• Define addressable market share
  1. How does the market change and grow over time?

1. Solution [2-6 pages]

• Help us understand how you will solve the problem.
• The Offering – What specifically are you offering to whom?
• What’s your differentiator or unique competitive advantage?
• Clearly quantify three or four key benefits you provide, and who specifically realizes these benefits.
• Highlight the elements of your technology that give you potential for leverage and scale as you grow.
• Explain how your solution is a company, not just a feature.

1. Competition [1-2 pages]

• Help us understand who you compete with, why you have a better product or solution and how you can win.
• Explain whom you compete with and summarize the few (3 – 4) key reasons why customers will prefer your solution to others.
• Include a competitive quadrant matrix.
• Who are investors of competitors
• How does the market change over time?
• Do
  you complement or displace commonly used technology? Do you change
  business processes, or do you do the same, but faster and cheaper?
• Do you disrupt the current value chain or fit into established channels?

1. Business Model [2-4 pages]

• Explain how you will generate revenue
• Show what you’ve accomplished to date
• Make future forecasts.
• Convey that you understand the realistic economics and evolution of a growing, dynamic company.
• Be able to discuss key assumptions and be able to defend them
  1. How do you make money?
  2. P&L
  3. Balance sheet – focus spending only on what’s critical.
  4. Cash flow, burn rate
  5. Cap table
  6. Revenue model
  7. Pricing + average account size and/or lifetime value
  8. Who are the key customers? How and what do they buy?
  9. Explain your pricing, your costs, and how you will achieve profitability.
  10. Key
      metrics that drive revenues, expenses and growth (such as customers,
      unit sales, new products, expansion sales, new markets, user stats,
      page views, global reach, uniques, registered users, subscription base).
  11. Marketing, sales & distribution model
  12. Pipeline of customers and strategic/channel partners that have expressed interest in your solution and/or are referenceable.

1. The Ask [1 page]

• Outline what you need from the investor to make your business a success and what you are looking for in an investor partner.
• “The
  amount you’re raising shouldn’t be arbitrary,” Canaan says. “Tell your
  story in numbers. Investors want to see that you’re hitting milestones
  and that you are asking for the right amount of money to get the
  company to a meaningful next step.”
  1. How much are you raising
  2. Valuation expectations
  3. Burn rate
  4. What milestones will it get you to? Why is this the right milestone?
  5. Why is this the right amount?
  6. Post-money of last round
  7. Amount of cash in the bank
  8. How much runway the new money will buy

How to pitch:

1. What is the product
2. Always ask yourself after a sentence: SO WHAT? → then answer that question
3. For instance (examples)
4. Know
   your audience (What do you want to learn about the organization? | What
   convinced you to listen to me? | What points do you want to hear about?
   | Background check of the Investor
5. 10 slides [Title | Problem | Solution | Business Model | Technology (magic) | Marketing – Sales | Competition | Team | Financial Forecast | Status (use of fund/ timeline à next step to action)
6. 20 min presentation (even if you have 1 hour)
7. if the audience remembers what your business does you are in the top 10%
8. Set the stage (organize laptops)
9. First words: How much of your time do I have?
10. What are the most important points you want to hear?
11. Only use realistic forecasts [e.g. almost everyone has a laptop. | Buying over the internet is cheaper than in a store.
12. Show you have a vision > show technical understanding
13. TAKE NOTES
14. Rewrite your pitch from SCRATCH after every meeting
15. Pitch at least 25 times before it goes real
16. Dark Background | Add your logo | “Normal Fonds” | no effects | one lvl of bullets maximum| diagrams | print slides
17. Compelling story
18. Imagine audience is bored and just wants to go home

David S. Rose on pitching to VCs

Most important thing VCs invest in: the Team

10 things you have to convey in a pitch:

• Integrity
• Passion
• Experience
• Knowledge
• Skill
• Leadership
• Commitment
• Vision
• Realism
• Coachable

How to implement that:

1. Grap the emotional attention
2. Take them on an ever accelerating emotional journey. Grand final = end
   
   
3. Explain: Market | What | How …
4. Tie in touchstones (other companies) I might have heard of
5. Validates (Sales | Award | Beta tests are great …)
6. Don’t say anything that is unrealistic
7. Make sure EVERYTHING in your presentation is understandable
8. Don’t let them think – take them through the presentation like kid without patronizing them
9. Check internal inconsistenciesVery bad: Typos, errors, unpreparedness

Presentation Practice

What is better: Short bullet points < just headlines < images

1. Company logo
2. Business Overview
   15 min overview (1 sentence service description)
3. Team
4. Market
5. Product
   What is the product (demo)
6. Business Model
   How I make money
7. Strategic Relationships
   Who are my partners [amazon]
8. Competition
9. Barriers to Entry
   How am I special?
10. Financial Overview (start → 3 years in future
    How would I spend the VCs money
11. How much money do I want? | what is the capital structure (other investors)
12. Logo → the final orgasmic pitch (make it about the speaker)

5 presentation tips:

1. Always use presenter mode
2. Always use a remote control
3. Handouts should NOT be the presentation (the presentation consists only of headlines | the handout has to stand by itself)
4. Don’t read your speech
5. Never look at the screen behind you

How to Present to Investors

1. Explain what you’re doing (say it in the first sentence)
2. get rapidly to demo (better show than talk)
3. Better a narrow description than a vague one. (show them the cools stuff your product can do)
4. Don’t talk and drive (make sure you never stop looking at your audience)
5. Don’t talk about secondary matters at length (Prioritize the shit out of your outline)
6. Don’t get too deeply into business models (just mention how you think you might make money)
   1. the presentation is too brief
   2. the business model is very likely to change anyway
7. Talk slowly and clearly to the audience
8. Have one person talk
9. Seem confident
10. Don’t try to seem more than you are
11. Don’t put too many words on slides
12. Specific numbers are good (not more than 4 / 5 numbers)
13. Tell stories about users (have a specific user in mind + make the stories personal)
14. Make a soundbite stick in their heads (create an unique phrase = Slogan)

Pitch your Business

—————Table-of-Contents—————

Why not to do a startup Characteristics of Successful Entrepreneurs Ten Rules for Web Startups What Business Can Learn from Open Source How Not to Die A Fundraising Survival Guide The Hardest Lessons for Startups to Learn Why to Start a Startup in a Bad Economy Excuses Why to Not Not Start a Startup Startups in 13 Sentences What makes a good founder? 10 Tips for the First-Time Business Owner The 18 Mistakes that Kill Startups 7 Things I Learned From My Startup Failing

Why not to do a startup

1. Startups are emotional roller coasters
   One day you think your company is going to succeed 100%
   The next day you expect the company to be broke by tomorrow

   Will the product ship on time? Will it be fast enough? Will it have too
   many bugs? Will it be easy to use? Will anyone use it? Will your
   competitor beat you to market? Will you get any press coverage? Will
   anyone invest in the company? Will that key new engineer join? Will
   your key user interface designer quit and go to Google?

2. In a startup nothing happens unless you make it happen
3. You get told “NO” a lot.
   by potential employees, potential investors, potential customers, potential partners, reporters, analysts…
   every time you hear a “yes” expect it to morph into a “NO” within 2 days
4. Hiring is a huge pain in the ass
   Expect only 20% of the people you interview will actually commit. + Those who commit 50% will be too lazy, too slow, easily rattled, political, bipolar, or psychotic…
5. The working hours
   

   it is impossible to keep a healty life balance when you are close to running out of cash, your product hasn’t shipped yet, your VC
   is mad at you, and your competitor in Menlo Park
   – you know, the one whose employees’ average age seems to be about 19
   – is kicking your butt.

6. If your team is not willing to commit → you are out
7. X-factors waiting to drop an A-bomb in front of your feet
   

   Stock market
   A better funded startup with a more experienced team that’s been hard
   at work longer than you have, in stealth mode, that unexpectedly
   releases a product that swiftly comes to dominate your market,
   completely closing off your opportunity, and you had no idea they were
   even working on it.
   Russian mobsters laundering millions of dollars of dirty money through
   your service, resulting in the credit card companies closing you down.

The rewards of taking all that:

1. The opportunity to control your own destiny
2. Opportunity to create something new
3. To have an impact on the world
4. Ideal corporate culture and dream team of people
5. Getting rich

Characteristics of Successful Entrepreneurs

Five Biggest Mistakes That Entrepreneurs Make:

1. Have clear goals/mission
   What is our measure of success? (sell the company for 20 mill)
2. Don’t try to prove that you are smart
   Rather than doing it for your ego, try to get a good product customers want
   Share credit!
3. Don’t be greedy – don’t just do it for the money
   Don’t try to keep all your shares, try to improve the value of your shares
   focus on the success of the company, not on keeping your equity
4. Don’t hire people you like, hire people you need
   Bring in people who have different skills than you
5. Know when to let go
   Find out when your skills are not sufficient anymore for the growth of the company

What are the Best Qualities of Successful Entrepreneurs?

1. Believe that you can make a difference
2. Passion for making things happen
   don’t just know things, do things
3. Have unjustifiable optimism
4. Have a high tolerance for uncertainty
5. Have a genuine concern for other people

Five Critical Skills That Entrepreneurs Need

1. Leadership
   ability to build consensus in the face of uncertainty, no matter how big and diverse the group
   convincing people to all pull on one string
2. Communication
   ability to keep a clear and consistent message
   convince people why working late is good for them
3. Decision-making
   knowing when to make decisions
   don’t make decisions too early (you might miss the most important pieces)
   don’t make decisions too late (over-analyzing might paralyze you)
4. Being a good team player
   knowing when to trust and delegate
   See when your people know it better than you – you don’t need all skills, get
5. Ability to telescope
   focus on details and the big picture
   no task is to “low” for you – you are just another employee

Companies Have Personalities, usually exactly the same as the founder, be aware of that from the beginning on
Timing is extremely important: the same idea too early might not find resonance amongst the investors or users. Too late means there is already a big player
Tips of risk: market risk | financial risk | technical risk → make sure you get rid of those as quick as possible → if your solution is not obvious to the market, you have to get into the market and show how much better it is.
The best time to start a company is when nobody thinks it’s possible (on average companies exist for 1-2 years before they get finance)
When you hire people from the beginning on: be aware that you have to change the management. Don’t make them Vice President of Sales, they might not be good in that once the company is bigger

Ten Rules for Web Startups

1. Be Narrow
   Focus on one problem of your customers and solve that perfectly
2. Be Different
3. Be Casual
   Don’t demand an immense afford from your users to use your services
4. Be Picky
   You should wait as long as possible to accept a new idea/person in your world
5. Be User-Centric
6. Be Self-Centered
   solve a problem you are facing personaly
7. Be Greedy
   the difference between 1000 users and 1000.000 is much bigger than 1000.000 and 100.000
8. Be Tiny
   Have low costs
9. Be Agile
   The world changes, so should your business model
10. Be Balanced
    Take care of your health

What Business Can Learn from Open Source

People work harder on projects they like. Emotional attachment brings a better outcome than any financial incentive.
The surrounding must be pleasant to work at
People have different ideal working hours
Ideas should come bottom-up (managers don’t tend to have better ideas)
Some People tend to work their ass off for a customer, but hate to be told by a boss.

How Not to Die

For every startup: “Getting Rich=10%” : “90%=Dieing”
if investors don’t hear from startups for a couple of months, this is a very bad sign
Main reason for Startups dieing = they become demoralized (Don’t give up)
make something a handful of users really <3 (love)
be 100% devoted to your company
being grimly dedicated to the success of your company (expected success rate = 90%)

A Fundraising Survival Guide

Hardest challenge for a startup is:

1. Make something users actually want
2. Raising money

No one cares if you made a genuine effort, the only thing that matters is the outcome.
You have much bigger chances if you focus 100% on the startup.

1. Have low expectations
   Deals fall through
2. Keep working on your startup
   Fundraising takes a big part of your attention, but you have to keep the startup running
3. Be conservative
   if you get a decent offer, take it
4. Be flexible
   VCs will ask:
   
   1. Who else are you talking to?
      They don’t really expect an answer
   2. How much are you trying to raise?
      They need an answer -> don’t use a fixed number, tell your options for different ranges
5. Be independent
   Show that you don’t need their money
6. Don’t take rejection personally
   Chance to get funded by an VC: 1:400
7. Always have an alternative source of income
8. Avoid inexperienced investors
   raising 20.000 from a first time Angel can be as exhausting as raising 2 mill from an VC
9. Know where you stand
   Don’t let investors to delay the process

The Hardest Lessons for Startups to Learn

1. Release Early (incorporate the user feedback)
2. Keep Pumping out Features (constantly improve)
3. Make Users Happy (What is your side about? -> Don’t tell, show!)
4. Fear the Right Things (don’t just look at existing competition)
5. Commitment is a Self-Fulfilling Prophecy
6. There is always room (if you are good, no market is too competitive)
7. Don’t get your Hopes up (Deals fall through -> accept it)
8. Speed, not Money (four founders hourly pay might be the same, but you condense decades into years)

Why to Start a Startup in a Bad Economy

You learn to be cheap
It is the founders that make an company succeed, not the economy
less competition
good people get fired and can be employed much cheaper

Excuses Why to Not Not Start a Startup

Too young
Too inexperienced the best way to get
experience is to start a startup
Not determined enough
Not smart enough
Know nothing about business
No cofounder
No idea
No room for more startups
Family to support
Independently wealthy
Not ready for commitment
Need for structure
Fear of uncertainty
Don’t realize what you’re avoiding
Parents want you to be a doctor
A job is the default

Startups in 13 Sentences

1. Pick good cofounders.
When you get funding, you do not get money for the work you created, you get money for the outcome the founders are expected to generate.
2. Launch fast.
Launching teaches you what you
should have been building.
3. Let your idea evolve.
most
of the ideas appear in the implementing.
4. Understand your users.
the hard part is
seeing something new that users lack. That’s why so many successful
startups make something the founders needed.
5. Better to make a few users love you than a lot ambivalent.
It’s easier to expand user wise than satisfaction wise.
6. Offer surprisingly good customer service.
In the earliest
stages of a startup, it pays to offer customer service on a level
that wouldn’t scale, because it’s a way of learning about your
users.
7. You make what you measure.
Pretty soon you’ll start
noticing what makes the number go up, and you’ll start to do more
of that.
8. Spend little.
A culture of cheapness keeps companies young in
something like the way exercise keeps people young.
9. Get ramen profitable.
“Ramen profitable” means a startup makes just enough to pay the
founders’ living expenses. it completely
changes your relationship with investors. It’s also great for
morale.
10. Avoid distractions.
Nothing kills startups like distractions.
Paradoxically, fundraising is this type of distraction, so try to
minimize that too.
11. Don’t get demoralized.
Though the immediate cause of death in a startup tends to be running
out of money, the underlying cause is usually lack of focus.
12. Don’t give up.
You can get surprisingly
far by just not giving up. Sheer effort is usually enough, so long as you keep morphing your
idea.
13. Deals fall through.
It’s very dangerous to morale to start to depend on deals closing,
not just because they so often don’t, but because it makes them
less likely to.

What makes a good founder?

1. Someone who takes their work a little too seriously; someone who does what they do so well that they pass
   right through professional and cross over into obsessive. What it means specifically depends on the job: a salesperson who
   just won’t take no for an answer; a hacker who will stay up till
   4:00 AM rather than go to bed leaving code with a bug in it; a PR
   person who will cold-call New York Times reporters on their cell
   phones; a graphic designer who feels physical pain when something
   is two millimeters out of place.
2. Is the person genuinely smart?
3. Can they actually get things done?
4. Can we stand to have them around?
5. Good founders make things happen the way they want. Which is not to say they force
   things to happen in a predefined way. If there were a word that meant the
   opposite of hapless, that would be the one. Good founders have a healthy
   respect for reality. But they are relentlessly resourceful. Bad founders seem
   hapless. They may be smart, or not, but somehow events overwhelm
   them and they get discouraged and give up.
   1. Be Relentlessly Resourceful
6. In a technology startup,  the founders should include technical people. Business people are bad at deciding what to do with
   technology, because they don’t know what the options are, or which
   kinds of problems are hard and which are easy. And when business
   people try to hire hackers, they can’t tell which ones are
   good.
7. You need at least one person willing and able to focus on what customers want. Some believe only business
   people can do this.
8. know your product in and out
   
9. learn from your customers
10. be cheap
11. Try to improve the existing system
12. Learn from others mistakes
13. Be prepared to fail
14. Stamina, you have to be prepared to work late hours 7 days a week
15. Flexibility, your startup idea will most probably change completely over the time

10 Tips for the First-Time Business Owner

1. Focus. Focus. Focus.
   Avoid getting side-tracked.&nbsp; Do one thing perfectly, not 10 things poorly.
2. Know what you do. Do what you know.
   Do what you love. Businesses
   built around your strengths and talents will have a greater chance of
   success.
3. Say it in 30 seconds or don’t say it at all.
   State your mission, service and goals
   in a clear and concise manner. Fit the pitch to the person. Less is
   always more.
4. Know what you know, what you don’t know and who knows what you don’t.
   Surround
   yourself with advisors and mentors who will nurture you to become a
   better leader and businessman.
5. Act like a startup.
   Your
   wallet is your company’s life-blood. Watch every dollar and triple-check every expense.
6. Learn under fire.
   There is no such thing
   as the perfect plan.Never jump right into a new business without any thought or planning,
   but don’t spend months or years waiting to execute. learn from your mistakes
7. No one will give you money.
   If you need large sums of
   capital to launch your venture, go back to the drawing board. Find a
   starting point instead of an end point. Simplify the idea until it’s manageable as an
   early stage venture. Find ways to prove your business model on a
   shoestring budget. Demonstrate your worth before seeking investment. If
   your concept is successful, your chances of raising capital from
   investors will dramatically improve.
8. Be healthy.
   I promise that you will be much more
   productive when you take better care of yourself. Working to the point of exhaustion
   will burn you out and make you less productive. Don’t make excuses. Eat
   right, exercise and find time for yourself.
9. Don’t fall victim to your own B.S.
   Impress with action
   not conversation. Endorse your business enthusiastically, yet
   tastefully. In short, put up or shut up.
10. Know when to call it quits.
    Know when it’s
    time to walk away. If your idea doesn’t pan out, reflect on what went
    wrong and the mistakes that were made. Assess what you would have done
    differently. Failure
    is inevitable, but a true entrepreneur will prevail over adversity.

The 18 Mistakes that Kill Startups

1. Single Founder
   1. one founder is not enough for the workload
      
2. Bad Location
   1. a “startup hub” has many advantages
      
3. Marginal Niche
   1. better to have 1% of a billion $ market, than 90% of a million $ market
      
4. Derivative Idea
   1. Don’t copy successful business, solve real problems people have
      
5. Obstinacy
   1. As your business idea might change, only the ones who prevail after hundreds of seemingly impossible problems get successful
      
6. Hiring Bad
   Programmers
7. Slowness in
   Launching
   1. you have to be quicker than the competition + VCs love prototypes
      
8. Launching too Early
   1. Alpha versions might ruin your reputation
      
9. Having no specific
   User in Mind
   1. One has to design for the users, without a clear picture of who that is a great product is merely a coincident.
      
10. Raising too little money
    1. Money is your lifeblood. In the beginning you life from the money investors gave you, if you run out of it = death
       
11. Spending too much
    1. burning through your money = death
       
12. Poor investor Management
    1. don’t ignore investors + don’t let them run your company [you should be the most qualified person to run your company]
       
13. Not having a clear monitarization strategy
14. Not Wanting to Get Your Hands Dirty
    1. One has to make sure, all aspects of a startup are taken care of
       
15. Fights between founder
    1. If a founder leaves, not only is it a problem considering the workload, but also his stock options
       
16. Half-Hearted Effort
    1. one must put 100% of his time + afford into the startup
       

7 Things I Learned From My Startup Failing

1) Pick a problem, and solve it.

Cool as our technology
was, and as compelling the concept, we never picked a single, specific
problem to solve. Our vision kept changing, and our proverbial audience
never showed up.

2) Know your audience. Better yet, BE your audience.

We shied away from blogs and forums, and weren’t exactly rabid
Twitterers. We built a product outside the scope of our experiences.

3) Match the strength of the company to the strength of your team

I spent whole days
poring over style sheets when I really wanted to be out striking deals.

4) Talk to people and listen to them closely

When you’re met with confusion, doubt, and dismissal, it’s time to
reevaluate.

6) Narrow it down

Pick a three-word monicker and stick to it. While your execution may change, your premise should stay consistent.