Founder Tip
of the Week

Innovators Wanted

Big ideas, Bite sized. Welcome to the Founder Tip of the Week.

The Great Business Plan Debate

A business plan is a living document that serves as a blueprint to help you build your company. More than that, a business plan is a tool to help you think hard, and clearly, about what you’re trying to achieve, the market opportunity, the potential threats to success, and how to overcome them. How detailed is your business plan, and how much time you invest in it, are matters of choice. And there are some who question the merits of doing a business plan at all.

What Happened to the JOBS Act?

Many entrepreneurs are wondering when they will get to take advantage of those parts of the JOBS Act that were heralded as new catalysts for start-up equity financing, particularly those sections of the Act engineered to permit crowdfunding and the advertising of certain private equity offerings under the SEC's Rule 506.

Startup Outlook Stats

Some interesting stats from The Silicon Valley Bank’s Startup Outlook report based on their survey of private companies across the U.S. in the software, life science, hardware and cleantech sectors. More than 750 companies completed the survey in December 2012. In response to the question, "What piece of advice would you give to President Obama with regards to supporting the innovation economy," startup executives had this to say:

How to Prepare for an Equity Financing

We have covered in past FTTWs how to value your startup and how much capital to raise. Once your startup decides to pursue equity financing, you should start to prepare for the investor due diligence process. On the business side, you will need to prepare a business plan and should take steps such as obtaining management references, interviews and background reviews, customer/user references, technical/product reviews, financial statements and business model reviews.

Vesting Basics – What is vesting?

“Vesting” is a term of art that is often glossed over by new entrepreneurs as they grapple with other newer and scarier terms to which they are being introduced as they start their companies, like “pre-money valuation,” “fully-diluted capitalization” and “broad-based weighted average antidilution adjustments.” However, I think it is good for entrepreneurs to have a thorough understanding of what vesting means.

Basics Of Convertible Note Financings

Convertible notes are a common structure for private company financings, most often for early stage companies trying to raise $1 million or less (see "Your First Vehicle for Fund Raising: Convertible Notes or Preferred Stock"). Here is a summary of the types of terms for such financings, and a quick primer on what to look out for if you’re considering this type of funding.

Privacy by Design

Starting a consumer-facing technology company or developing a new application to make a consumer's life easier or more fun is an exciting journey. At this stage, you are all about the development, getting the product or service to market, and making sure it can scale. But neglecting the privacy implications of your product or service during the development stage is a big mistake that will come back to haunt you later. Imagine, for example, that your dream of building a great company has come true and you are faced with an acquisition offer. During the customary due diligence phase, you quickly discover that your privacy house is not in order. Why?

Old Advice is Good Advice – Keep it Simple

As founders, you are likely very familiar with the multitude of obstacles that a successful venture must overcome: financing, management, creation and protection of valuable intellectual property, marketing, and building profitable and sustainable customer relationships. Another obstacle that is well known yet rarely labeled as such is “complexity.” In building a new venture, the old adage “keep it simple” remains an important philosophy.