honest with yourself. 4. What I say is not a universal truth; learn to think for yourself. 5. Understand that you are fundamentally different than me, your parents, your professors.
or shares • Venture Capitalist o Invests other people’s money and takes a fee + % of winnings • Angel Investor o Rich person who can invest (> $1M) • Super Angel o Really rich person who invests a lot (>$50M) • Seed Round o First round of official financing • Series A/B/C o subsequent “big” rounds of financing • IPO o Going public on the stock market • Incubator/Accelerator o program to help your early- stage company
founders get) • Preferred Stock o investor stock (what VCs/Angels get) o gives them the right to their money back before founders • Vesting o gradual grant of funding/equity over time rather than all-at-once o designed to get you to commit long-term • Convertible Debt o investment financing technique that gets you money now with a promise for the % equity calculation when a formal big round is raised (at that same rate)
Facebook Silicon Valley Peter Thiel Paypal Palantir Facebook Katie Rae TechStars Project 11 Boston Ecosystem Vinod Khosla Khosla Ventures Sun/JAVA/NFS Brad Feld TechStars MIT FeldThoughts Fred Wilson Union Square VC Flatiron Partners Marc Andreessen Netscape A16Z FB, Ebay, HP Sam Altman YCombinator Loopt Power fundraiser Paul Graham YCombinator Father of Startups Essays
ups and downs (at high frequency) 3. Low on cash 4. Family stress 5. Rejection from many investors/incubators/ skeptics 6. Very long hours 7. Average exit time ranges from 6-8 years!
following your passion 3. Fame/fortune/impact 4. Learn life’s lessons in a much shorter period of time 5. Age and risk 6. Personal branding (“developer from _____”)
“Find the customer first!” “Move fast and validate!” “What’s your unfair advantage?” “What do you understand that others don’t?” “What’s new and what do people resort to because it doesn’t exist?”
CEO & CTO (no COO or CMO) • Someone you know well & work well • Done things outside expertise and “hack the system” • Rarely family or close friends • Roommate bad signaling • Someone you an be honest with and fight
involved o Hard to be flexible o Moves slower • Full-time o usually self-financed (or FFF) o flexible with opportunities and travel o powerful signaling for yourself
$15-18K + Conv. Note o 3 months of incubation time § meetings with mentors, investors, community events, entrepreneurs, techies o In-house or Out-House o Demo Day event (good and bad) o Free legal or finance help • New Standard? o 5-7% Common Stock for $120K
split • Founders (first 3 people) o 5-50% • Early Employees (first 2 or 3 hires) o 1-2% (different for non-tech) • Regular Employees (beyond first 5 or 10 hires) o <1%
$155.5M • Less dilution • Assets retained (IP/ growth) or dissolved (anti-competitive) Acqui-hire • Same as acquisition but for people not assets/tech • Much lower sale price • assets dissolved • some employees are not hired/paid IPO • ~8.5 yrs • $162M raised • more potential dilution • big range in offering and market cap • shares go public!
Do you have a paying customer NOW? • How will this make money NOW? • Is this the right team? • Is this the right time personally? • Is this something you could see yourself doing for 10 years? • Are you resilient enough? (competition)
the founders already done everything they can to make a business out of it? 3. Will it scale to something much bigger eventually? 4. Does the founding team have a track record for success and do they work well together? 5. Do they make you feel like you will miss out?
purirohan
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addyosmani
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