Old Advice is Good Advice – Keep it Simple

Perfecting the Pitch�Solve Big Problems with Unique Solutions

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.

Keeping it simple provides several advantages, including the following:

•  Simpler is easier to explain and, therefore, easier to sell:  How many times have you heard a pitch where after 10 minutes you are still not sure what the company does, how it makes money, or why it needs your help?  The simpler you keep the concepts and goals of your business plan the easier it will be to persuade your target audience, whether they are investors or customers, to buy in.

•  Simpler is more efficient and less expensive:  A new venture involves an extraordinary amount of time and effort.  Each new task introduces new costs, and the accretive effect of trying to accomplish several tasks at once can be a very dissuasive power acting against your success.  Realize that tasks must be prioritized to remain efficient and cost effective to avoid being trapped by the enormity of the project.  Try making a list of all your objectives and the costs and benefits associated with each, and then pick one or two primary objectives to address first.  While capturing 10% of the market would be wonderful, in reality it starts with the first successful sale.

•  Simpler allows for future complexity:  Once you have taken the initial steps to lay the framework for your venture, you can then fold in additional complexities as, if and when needed.  But without that simple framework, it becomes too easy to lose your way.  For example, giving equity to employees and consultants is a useful tool to compensate and incentivize individuals who are helping you build your business, but if you skimp on the initial step of setting up the plan and devising a strategy for the use of stock options and grants, it is easy to find that you have imprudently given equity away.

A new venture provides plenty of reasons for complication.  This tip is not to say that complexity should be avoided at all costs.  Rather, this tip is to encourage you, knowing full well the obstacles before you and the likelihood that those obstacles will raise costly complexities at each turn, to keep it simple, especially in the beginning, and to redouble your efforts to build the framework for future complexities.

You’ve Got VC Money: The Punchlist

As outside counsel to thousands of VC-backed startups, we are often asked the same questions about what startups need to do after raising their first round of VC financing. Here is a quick and dirty list of those next steps. The action items below are described in…

You’ve Got VC Money: Board Meetings

Board meetings are your opportunity to check in with and give an update to your bosses and get feedback and guidance from the experienced members of your board. It is common for VC-backed startups to have four to six board meetings per year, though this frequency can…

You’ve Got VC Money: Board vs Stockholder Approval

While your financing agreements might have other requirements, below is a nonexhaustive list of the types of corporate decisions that typically require board and/or stockholder approval: Board Approval Is Required to: Stockholder Approval Is Required to: Amend the charter or bylaws. Approve significant corporate transactions (e.g., sale…