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From side project to startup

Natalie Downe
November 07, 2011

From side project to startup

Presentation given at Barcamp London 9

Natalie Downe

November 07, 2011
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  1. Lanyrd.com Tips on beta testing Launch in beta first ...

    but not for too long Keep the beta testers after launch Make sure beta-only features obvious
  2. Lanyrd.com Learn from our mistakes Don't over-engineer... but... Do plan

    for at least a small spike in traffic Don't miss out on users because your site is too unstable
  3. Lanyrd.com Community support Any contact from a user is a

    chance to turn them into a fan, no matter how grumpy they are It is not the bug that reflects you, its how you deal with it 140 characters in public is not the best forum for discussion Let people know about their pet features
  4. Lanyrd.com Community support Any contact from a user is a

    chance to turn them into a fan, no matter how grumpy they are It is not the bug that reflects you, its how you deal with it 140 characters in public is not the best forum for discussion Let people know about their pet features
  5. Lanyrd.com Watch how people use your site Have an activity

    stream, even if it is just admin only Data is a symptom of design. Watch for duplicates and bad data: these bugs are important to fix quickly because they affect the quality of your data.
  6. Lanyrd.com YC application What substitutes do people resort to because

    what you plan to make doesn't exist yet? What do you understand about your business that other companies in it just don't get? How will you make money?
  7. Lanyrd.com Y Combinator $11,000 (+$3000 per founder) for about 7%

    $150,000 follow-on investment from Start Fund 'Office hours' meetings with YC partners for advice Weekly off-the-record dinner with invited speakers 'Demo Day' after 3 months
  8. Lanyrd.com 2 minutes, 10 seconds You'll be lucky if investors

    remember a single noun from your pitch... so make sure it's the right noun!
  9. Lanyrd.com Reasons startups die 1. Not making something people want

    2. Fundraising http://www.paulgraham.com/fundraising.html
  10. Lanyrd.com "How much should I raise?" Raise enough money for

    18 months You'll have to start fundraising again after 12 How much of the company are you willing to give away?
  11. Lanyrd.com Valuations If you can convince someone to invest $1,000,000

    for 10% of your company, your valuation is $10m (Actually it's $11m post-money, and $10m post-money)
  12. Lanyrd.com Convertible Notes Also known as "bridge loans" Investor can

    give $100,000 now as an advance on your future equity round When you raise the full round later, they get $100,000 worth of stock at whatever the valuation is They get perks for investing early (a cap and/or discount) http://j.mp/convertable-notes
  13. Lanyrd.com "Angel investors or VCs?" Angels invest their own money,

    usually $5k-$50k Frequently exited founders themselves Not necessarily looking for a massive exit VCs invest other people's money Looking for the big 10x hits, to make up for losses You can raise money from both
  14. Lanyrd.com Ask for more than money Have a hit-list of

    skills you wan't to find in investors Marketing? Internationalisation? Hiring? Growing a company
  15. Lanyrd.com What you'll need Executive summary Elevator pitch Pitch deck

    The phone number of a really good lawyer Answers to common questions
  16. Lanyrd.com Common questions Where do you see your company in

    five yours time? What's your TAM - your Total Addressable Market size? How are you going to spend the money?
  17. Lanyrd.com Finding (the right) investors Introductions are essential Ask investors

    for intros to more investors Look at who they have previously invested in
  18. Lanyrd.com Investor meetings Good investors decide quickly - just one

    or two meetings ... but it takes a LOT of meetings to fill up your round Meet with less exciting investors first, to practice At the end of the meeting, ask for the money!
  19. Lanyrd.com Closing a round A VC will offer you a

    "term sheet", outlining their proposed investment Show it to a lawyer! If you're lucky, you'll get more than one offer from different firms. Then you can negotiate. Even when you sign it, you'll still need to round up the other investors and negotiate on the full legal documents
  20. Lanyrd.com Lawyers are translators VCs are professional negotiators - you

    aren't Your lawyers can translate the legalese, and tell you what terms are standard and what terms aren't To negotiate, you need reasons Investment is full of strange etiquette - good lawyers can guide you through that as well
  21. Lanyrd.com Announcing your round It's a free news story, time

    it well Don't share your valuation Do say who your investors are, how much you raised and what you are going to spend the money on Give the exclusive to one publication, follow up with different angles to subsequent publications if you can
  22. http://www.flickr.com/photos/pattylagera/ On top of the world! Everyone likes us! Why

    would I ever want a real job? Oh crap! The world is ending, Servers are down, Bad comments on twitter Maybe I can still get a real job?
  23. Lanyrd.com It's a tough job! You don't get to go

    home and stop thinking about work You will have no idea what you are doing - but nobody else does either, ask a founder! You don't need to be born an entrepreneur ... but you do need to find a great co-founder
  24. Lanyrd.com Would we do it again? ... Yes! You have

    something that is yours Knowing that you are improving peoples lives, even slightly You get to build the company you want to work for