StartupMuse » StartupMuse - by Alexander Muse http://www.startupmuse.com by Alexander Muse Sun, 24 May 2015 14:31:45 +0000 en-US hourly 1 Raising Money from an Angel Investor http://www.startupmuse.com/raising-money-from-an-angel-investor/ http://www.startupmuse.com/raising-money-from-an-angel-investor/#comments Sat, 23 May 2015 17:54:19 +0000 http://www.startupmuse.com/?p=10031 My son is a huge fan of Khan Academy. If you’re new to the startup world these videos from Khan on raising money for your startup are actually really good. You’d be surprised how few entrepreneurs really understand these basic concepts: Raising money for a startup: Raising money from an angel investor. Pre-money and post-money […]

The post Raising Money from an Angel Investor appeared first on StartupMuse.

]]>
My son is a huge fan of Khan Academy. If you’re new to the startup world these videos from Khan on raising money for your startup are actually really good. You’d be surprised how few entrepreneurs really understand these basic concepts:


Raising money for a startup: Raising money from an angel investor. Pre-money and post-money valuation.

The post Raising Money from an Angel Investor appeared first on StartupMuse.

]]>
http://www.startupmuse.com/raising-money-from-an-angel-investor/feed/ 0
Termsheet No-Shop Clause Negotiation http://www.startupmuse.com/termsheet-no-shop-clause-negotiation/ http://www.startupmuse.com/termsheet-no-shop-clause-negotiation/#comments Sat, 23 May 2015 14:58:42 +0000 http://www.startupmuse.com/?p=183 One of the entrepreneurs I mentor got a termsheet from a local investor and expects to get another one shortly. The termsheet has an expiration date and includes a no-shop clause. For those of you unfamiliar with the term, a ‘no-shop’ is clause in a termsheet between an entrepreneur and a potential investor that bars […]

The post Termsheet No-Shop Clause Negotiation appeared first on StartupMuse.

]]>
no-shop-clause-termsheet-negotiationOne of the entrepreneurs I mentor got a termsheet from a local investor and expects to get another one shortly. The termsheet has an expiration date and includes a no-shop clause. For those of you unfamiliar with the term, a ‘no-shop’ is clause in a termsheet between an entrepreneur and a potential investor that bars the entrepreneur from soliciting termsheets from other investors. In other words, the entrepreneur cannot “shop” the deal around once he executes the termsheet. I recommended he attempt to remove the clause from the agreement.

In most cases the no-shop clause is VERY expensive for a startup and costs the investor nothing. Most startups begin raising money about six months before they’ll actually need the money. If you sign a termsheet with a 60 day no-shop on the third month of your fund raising process you’ll be out of money before you’re allowed to start raising money again. You can’t blame him for asking for it, but I’d recommend you attempt to negotiate its removal. If you can’t get it removed you should attempt to modify it to include a ‘cost’ for the investor.

On several occasions I’ve been successful modifying a ‘no-shop clause’ in two specific ways. First, I’ve asked that the no-shop begin only AFTER the other party had begun third-party legal or accounting diligence (i.e. engaged outside lawyer or accountant) incurring fees. Once an investor has gone ‘hard’ on a deal and has real skin in the game it isn’t unreasonable for them to ask for a no-shop. Second, I’ve asked for a break-up fee equal to my third party legal or accounting costs incurred as a result of the transaction in exchange for a no-shop provision. Again, if an investor wants me to take my company off of the market so he can evaluate the deal all I’m asking is that he have some skin in the game. Alternatively, he can elect NOT to ask for a no-shop provision – usually the best option. Finally, you should make the no-shop provision as short as possible. You need to keep raising money until you close. Never stop shopping your deal (unless of course you’ve agreed to stop for a period of time).

The post Termsheet No-Shop Clause Negotiation appeared first on StartupMuse.

]]>
http://www.startupmuse.com/termsheet-no-shop-clause-negotiation/feed/ 0
Jason Fried, Basecamp http://www.startupmuse.com/jason-fried-basecamp/ http://www.startupmuse.com/jason-fried-basecamp/#comments Sat, 23 May 2015 14:55:00 +0000 http://www.startupmuse.com/?p=181 Unless you are a fortune-teller, long-term business planning is a fantasy.

The post Jason Fried, Basecamp appeared first on StartupMuse.

]]>
Unless you are a fortune-teller, long-term business planning is a fantasy.

The post Jason Fried, Basecamp appeared first on StartupMuse.

]]>
http://www.startupmuse.com/jason-fried-basecamp/feed/ 0
Steve Jobs http://www.startupmuse.com/steve-jobs/ http://www.startupmuse.com/steve-jobs/#comments Fri, 22 May 2015 14:33:10 +0000 http://www.startupmuse.com/?p=176 Everything around you that you call life was made up by people that were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use.

The post Steve Jobs appeared first on StartupMuse.

]]>
Everything around you that you call life was made up by people that were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use.

The post Steve Jobs appeared first on StartupMuse.

]]>
http://www.startupmuse.com/steve-jobs/feed/ 0
Richard Branson http://www.startupmuse.com/richard-branson-2/ http://www.startupmuse.com/richard-branson-2/#comments Thu, 21 May 2015 14:26:27 +0000 http://www.startupmuse.com/?p=174 One key to entrepreneurial success is to get a great group of people around you who believe in your idea.

The post Richard Branson appeared first on StartupMuse.

]]>
One key to entrepreneurial success is to get a great group of people around you who believe in your idea.

The post Richard Branson appeared first on StartupMuse.

]]>
http://www.startupmuse.com/richard-branson-2/feed/ 0
Cher Wang, CEO of HTC http://www.startupmuse.com/cher-wang-ceo-of-htc/ http://www.startupmuse.com/cher-wang-ceo-of-htc/#comments Wed, 20 May 2015 12:43:33 +0000 http://www.startupmuse.com/?p=170 “It takes humility to realize that we don’t know everything, not to rest on our laurels and know that we must keep learning and observing. If we don’t, we can be sure some startup will be there to take our place.”

The post Cher Wang, CEO of HTC appeared first on StartupMuse.

]]>
“It takes humility to realize that we don’t know everything, not to rest on our laurels and know that we must keep learning and observing. If we don’t, we can be sure some startup will be there to take our place.”

The post Cher Wang, CEO of HTC appeared first on StartupMuse.

]]>
http://www.startupmuse.com/cher-wang-ceo-of-htc/feed/ 0
How to join a startup if you can’t code. My 3 Secrets. http://www.startupmuse.com/how-to-join-a-startup-if-you-cant-code-my-3-secrets/ http://www.startupmuse.com/how-to-join-a-startup-if-you-cant-code-my-3-secrets/#comments Wed, 20 May 2015 12:30:06 +0000 http://www.startupmuse.com/?p=167 I was reading Kyle Wong’s post on LinkedIn titled, “Making An Impact At An Early-Stage Startup If You’re Inexperienced And Don’t Code“. His points are good, but I think he is missing the real point. If you want to join a startup these days you need to do one of two things: learn how to […]

The post How to join a startup if you can’t code. My 3 Secrets. appeared first on StartupMuse.

]]>
salesmen-coder-startupI was reading Kyle Wong’s post on LinkedIn titled, “Making An Impact At An Early-Stage Startup If You’re Inexperienced And Don’t Code“. His points are good, but I think he is missing the real point. If you want to join a startup these days you need to do one of two things:

  1. learn how to code
  2. learn how to sell

I’ll tell you my first secret, learning how to sell is MUCH harder than learning how to code. Many developers will likely argue with me, but I can let you in on my second little secret – my 13 year old learned how to code in two languages by the time he was 10. Coding isn’t rocket science – it is something you can learn over the summer. There are scores of online learning resources and with new languages like Apple’s Swift there are more and more opportunities to become an expert within months. My advice? Learn how to code iPhone apps using Swift and start your own company or join a startup. It will be a lot easier than starting a company as a non-technical founder or joining a startup as – well whatever inexperienced non-coders call themselves.

My third little secret is that people who know how to sell make a LOT more money than people who only code. The people who had sales skills at each of the startups I founded got paid more than me – a lot more than me. Selling is a LOT of work, but its a lot of fun. And you CAN learn how to sell. Selling skills translate throughout a startup. For example, when you are recruiting new employees or raising money from investors you’re really just selling them on the vision of the company.

The best place to learn how to sell? The BIGGEST company you can find. They will invest tens of thousands of dollars in you in an attempt to teach you how to sell. Some of the biggest telecom and internet companies in the world spent hundreds of thousands of dollars teaching me to sell. They made HUGE investments in me and I sold millions of dollars of stuff before I left to start my own companies. Take three years and REALLY learn how to sell. It is a BIG investment of your time, but along the way you’ll make a lot of money AND obtain a skill that is very hard to learn.

Most VCs look to hire a CEO who can sell when looking for your replacement. Be that guy/girl from the start. Selling makes everything else possible. Good luck!

The post How to join a startup if you can’t code. My 3 Secrets. appeared first on StartupMuse.

]]>
http://www.startupmuse.com/how-to-join-a-startup-if-you-cant-code-my-3-secrets/feed/ 0
Startup Quandary: Quitting or Pivoting http://www.startupmuse.com/startup-quandary-quitting-or-pivoting/ http://www.startupmuse.com/startup-quandary-quitting-or-pivoting/#comments Tue, 19 May 2015 13:44:52 +0000 http://www.startupmuse.com/?p=149 The other morning I had a heart to heart with one of the entrepreneurs I advise about whether or not he should pivot or quit. His startup had raised a few hundred thousand dollars and managed to build an MVP, but struggled to secure customers and additional investment. His investors weren’t impressed by his inability to […]

The post Startup Quandary: Quitting or Pivoting appeared first on StartupMuse.

]]>
startup-pivot-quittingThe other morning I had a heart to heart with one of the entrepreneurs I advise about whether or not he should pivot or quit. His startup had raised a few hundred thousand dollars and managed to build an MVP, but struggled to secure customers and additional investment. His investors weren’t impressed by his inability to get customers to sign up for their service and were unwilling to invest additional capital. The question? Should he come up with a new idea and pivot the company or should he shut the company down and come up with a new idea and start over with a clean capitalization table?

What do you think? What would you do? Have you ever faced this sort of quandary? Love your comments. If I get a few comments I’ll share my own experience with this issue and the advice I shared with the entrepreneur. Cheers!

The post Startup Quandary: Quitting or Pivoting appeared first on StartupMuse.

]]>
http://www.startupmuse.com/startup-quandary-quitting-or-pivoting/feed/ 0
Focusing is the hardest part of being an entrepreneur http://www.startupmuse.com/focusing-is-the-hardest-part-of-being-an-entrepreneur/ http://www.startupmuse.com/focusing-is-the-hardest-part-of-being-an-entrepreneur/#comments Mon, 18 May 2015 13:41:43 +0000 http://www.startupmuse.com/?p=146 You know you’re an entrepreneur if everything you hear or read makes you want to start a new company. If you’re not careful you’ll end up starting a new startup every month like Pieter Levels. Ten months ago he declared to the world that he was going to start 12 startups over the next 12 […]

The post Focusing is the hardest part of being an entrepreneur appeared first on StartupMuse.

]]>
pieter-levels-startup-focusYou know you’re an entrepreneur if everything you hear or read makes you want to start a new company. If you’re not careful you’ll end up starting a new startup every month like Pieter Levels. Ten months ago he declared to the world that he was going to start 12 startups over the next 12 months. In my experience the hardest trait, but most important trait in an entrepreneur, is the ability to say NO to ideas. Instead, I believe, commitment to a single idea for at least 13 months is key to achieving any level of success.

I have a new idea for a startup almost every morning while I’m in the shower. For example this morning I was listening to NPR and was shocked to hear that the demand for rescue dogs is outstripping supply. Shelters are having to import ‘rescue dogs’ from other states including Puerto Rico. It occurred to me that I could build an online service for shelters to list all of their available dogs. The underlying rescue dog search engine could be embedded in the shelter’s website in an iFrame allowing for a more perfect way to match potential owners and pets all over the country. I went so far as to actually talk about the idea several times today until I realized that I was ‘stealing’ mental energy from my BIG idea – ViewMarket.

Startup ideas are fragile. They need 100% of your mental and physical energy to come to life. Pieter’s idea to start 12 startups in a year is ‘cool’ but it is unlikely to create a ‘hit’. I’d love to do ‘a’ deal with Pieter, but I’d be hard pressed to commit my time to working with him if I knew he was ‘cheating’ on me with 11 other startups. Commit. Pick. Focus.

Update: Pieter reached out via Twitter and suggested that “you need market validation before focus”. I agree completely. You need to validate your ideas before spending the next 13 months of your life trying to bring them to life. BUT, make sure you’ve invalidated your first startup before starting the second startup.

The post Focusing is the hardest part of being an entrepreneur appeared first on StartupMuse.

]]>
http://www.startupmuse.com/focusing-is-the-hardest-part-of-being-an-entrepreneur/feed/ 0
Startup Bridge Loans Suck http://www.startupmuse.com/startup-bridge-loans-suck/ http://www.startupmuse.com/startup-bridge-loans-suck/#comments Sun, 17 May 2015 13:39:36 +0000 http://www.startupmuse.com/?p=143 In the startup world S.O.S. means ‘save our startup‘ and the most common life saving device is a bridge loan. Typically a current investor will pony up just enough capital to get the company to either breakeven or the next funding event. But more often than not bridges are simply a way to allow a […]

The post Startup Bridge Loans Suck appeared first on StartupMuse.

]]>
startup-bridge-loanIn the startup world S.O.S. means ‘save our startup‘ and the most common life saving device is a bridge loan. Typically a current investor will pony up just enough capital to get the company to either breakeven or the next funding event. But more often than not bridges are simply a way to allow a CEO to stay in a state of denial hoping that a magical solution will present itself. Worse yet, bridge loans send a VERY bad signal to future investors. Fred Wilson explains it:

“So bridge loans are often bad investments made defensively. And so they are red flags to other investors. When a new investor looks at a company and sees a bridge loan in place, they will understand that all is not well… And it will make closing a financing more challenging.”

It takes a startup about six months to raise a major investment round. If you haven’t made significant headway during the first ninety days it is time to take a good hard look at your burn. Your most important job as CEO is to save the company. It may be painful, but you must start cutting costs – renegotiating agreements with employees and vendors – whatever it takes. You need to get your burn rate down so that you can cut it completely if you end up running out of runway.

Of course, most CEOs (including me) don’t start cutting deep or fast enough to prevent the need for a bridge loan. Ironically, VCs know that the bridge loan is almost ALWAYS a bad idea a ‘bridge to no where’, but they can’t help themselves. So if you need to take that bridge loan make sure can find a way to ensure that it buys you the time you need to save your company. Oh, and start looking for a new role within the company or a new job because your days are numbered. The best way to explain the need for a bridge to a new investor is to introduce him to you – the soon to be former CEO – they will only consider the investment if they can convince themselves that you were the problem.

The post Startup Bridge Loans Suck appeared first on StartupMuse.

]]>
http://www.startupmuse.com/startup-bridge-loans-suck/feed/ 0