The document provides advice on starting a startup. It discusses finding a problem to solve, focusing on execution over ideas, hiring people better than yourself, prioritizing relentlessly, and focusing on products and sales to generate profits rather than seeing financing as the goal. Fundraising advice includes starting with friends and family, then pitching to angels and VCs, with the goal of getting a small amount from each to reach larger funding rounds.

1. the startup process
dan gould
vp, technology
fox interactive media (img cc flickr user karlequin)

2. you

3. here

4. startup

5. change the world

6. build something

7. make money

8. (lots of easier ways)

10. (img cc flickr user noelleandmike)

11. (img cc flickr user casasroger)

12. need you

14. value

15. about:me

16. entrepreneur

19. corridor

20. failed

21. good

22. social interfaces
machine learning

23. do

24. something

26. janitorial functions
$$$
people
idea
marketing
resources
engineering

27. why?

28. metric: do you know
your goal?
(boolean)

29. idea

30. matters? yes

31. > execution? no

32. 100% * 100% = 100%
90% * 90% = 81%
100% * 0% = 0%

33. cc flickr user cayusa

34. people with
problems

35. niche
niche
niche
niche
niche
niche
niche
niche
niche

36. metric: can you show
me your ideal user?

37. mission

38. quot;To serve the world's most engaged community.quot; (AOL 2006)
dumb
quot;To scout pro table growth opportunities in relationships, both
internally and externally, in emerging, mission inclusive markets,
and explore new paradigms and then lter and communicate
and evangelize the ndings.quot;

39. A Computer on Every
Desk and in Every Home
(1975)

41. The World On Time

43. Organize All the
World’s Information

45. people

46. rst 5-10
==

47. don’t compromise

48. a -> a
b->c
c->d

49. metric: did i hire someone
better than myself?

50. incentivize

51. options

52. CEO 5-10%
COO 2-5%
VP 1-2%
(Ind) Board .5-1.5%
Director 0.3-1.2%
Lead Eng 0.5-1%
5+ exp Eng .33-.66%
Mgr, Jr Eng 0.1-0.33%
rough post-Series A

53. vesting
+ acceleration, etc

54. founders too

55. milestones

56. come up with a series
of milestones and
break down tasks to
get there
e.g.,
product design done
rst customer test
beta ready

57. prioritize relentlessly

59. types

60. right

61. consulting

62. lifestyle

63. cash ow

64. 50% of $1M
or
5% of $20M

65. venture-backed

69. (img cc flickr user omnidirectional)

70. (img cc flickr user willie_901)

71. for most:
VC==wrong
(but it’s what I’m going to talk about)

72. fundraising

73. sex

74. (img cc flickr user irlandainquieta)

75. (some typical amounts)
self ?
3Fs 10-100K
angel 200K-1M
vc (series a) 1-8M
vc (series b) 5-25M
mezz 25+M
IPO $lots

76. friends & family

77. (img cc flickr user martin_hartland)

78. angels

79. successful entrepreneurs
retired execs
professional angels
“trailblazers”
angel groups

80. sophisticated

81. risk / reward

82. equity

83. Guy Kawasaki’s rule of thumb:
$500K per engineer
-$250K per MBA
(said for series a in a better market)

84. convertible
disappearing in this market
disappeared

85. (last deals i saw for conv angel rounds
w/1st-time entrepreneurs in this market
before they stopped)
75% warrant coverage
50% discount
10% per month warrant coverage
20-30% discount in good market

86. vc

87. pensions,
endowments
carry

88. “sure bets”

89. success:
20 investments
13 op/sideways
5 2-3X
2 10X

90. 10Xes pay

91. only 10X potential

92. 1000 plans
250 initial pitches
12 due dilligence
6 investments

93. (img cc flickr user protoflux)

94. (img cc flickr user bargas)

95. angel
portfolio
entrepreneur
advisor
lawyer
CS profs

96. advisors

97. advice <-> $

98. pitch

99. practice

100. 10

101. 1 hour:
20 mins - VC late
20 mins - pitch
20 mins - questions

102. team

103. elevator pitch

104. revenue model

105. customer acquisition

106. competition/barriers

107. amount

108. milestones

109. customer traction

110. 1-page exec sum

111. deal

112. Company Value
$2M

114. Cash in the bank
$1M
Company Value
$2M

115. Cash in the bank
$1M
}
$3M
Company Value
$2M

116. before
= $2M
100%
Your Share

117. after
33%
= $2M
67%
Your Share VC Share
(but you did give up a bunch of rights)

118. eventual size
discounted for time,
risk, dilution

119. people risk
market risk
execution risk
competition risk
technology risk
financing risk

120. competition

121. (img cc flickr user ohadby)

122. preferred shares
vetoes over sales/stock iss
liquidation preferences
board seats
protective provisions
ratchets
etc.

123. (img cc flickr user millzero)

124. nancing = work

125. success!= nancing

126. success=pro ts

127. pro ts
products & sales

128. cc flickr user davestfu