Startup

Some reading:

Popular Jargon:

  • Startup of One
  • Gig Economy
  • Unicorn: valuation of more than $1 billion
  • Decacorn: valuation of more than $10 billion

Metrics

  • CAC = Customer Acquisition Cost
  • LTF = Life Time Value = value that a customer will contribute to your company over their entire “lifetime” (usually 12-24 months)

Product Fitness Assessment (PFA)

  1. Exactly what problem will this solve? (value proposition)
  2. For whom do we solve that problem? (target market)
  3. How big is the opportunity? (market size)
  4. What alternatives are out there? (competitive landscape)
  5. Why now? (market window)
  6. How will we get this product to market? (go-to-market strategy)
  7. How will we measure success/make money from this product? (metrics/revenue strategy)
  8. What factors are critical to success? (solution requirements)
  9. What are the fundamental reasons why this product would fail? (key assumptions being made)

Funding

Ref:

Capital Raise:

  1. Seeding
    • From FFF (Fool, Friend, Family), Angle Investor, Incubator
    • Between $500,000 and $2 million
  2. Series A:
    • Developing a business model, even if they haven’t proven it yet
    • Investment between $2 million - $15 million
  3. Series B:
    • Market fit and needs help expanding
    • Investment between $7 million and $10 million
    • Company valuation between $30 million and $60 million
  4. Series C:
    • Ready to expand to new markets, acquire other businesses, or develop new products
    • Investment avg $26m
    • Company valuation between $100 million and $120 million
  5. Series D:
    • Many companies finish raising money with their Series C
    • Discovered a new opportunity for expansion before IPO or hasn’t hit the expectations laid
  6. Series E:
    • They’ve failed to meet expectations;
    • they want to stay private longer;
    • they need a little more help before going public

Valuation

Fixed Equity Split

Dynamic Equity Split

Not Fair = Not Fun