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Sequoia Capital Partners Reiterate Value of Cash

October 9, 2008

Apparently, TheFunded.com managed to procure meeting notes of a CEO of a Sequoia Capital portfolio company, made their mandatory gathering to discuss what their companies should be doing in the current economic climate. TheFunded published the full text in their members only section, but Lance Weatherby, a ‘Venture Catalyst’ at Georgia Tech, republished it on his blog.

The speakers at the meeting seem to echo my sentiments yesterday about CASH being king, and there is A LOT mentioned about cashflow and cutting expenses… cutting DEEP. Whether it mean cutting unnecessary features from your product, cutting employees, cutting salaries; the most drastic the better in order to PRESERVE cash and you cash flow.

(I had a whole list of my favorites here before wordpress decided to eat my post for lunch and I had to start from scratch. Read the full text over at Lance’s blog for all the good stuff.)

This is pretty serious stuff from one of the country’s premier venture capital firms. However, when you really sit and think about what they had to say, really, it’s just sound, LEAN business practices that you should probably be following anyway. Right?

As a startup, you HAVE to know that cashflow is going to be very important to your (ultimate) success and you should ALWAYS keep expenses as trim as you can. Don’t we learn that in Business 101?

I love the last sentence in the text of the meeting notes:

Get Real or Go Home

Good advice for all of us!

Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |  

Now is the time to bootstrap your new business!

October 8, 2008

Are you starting a new business? Or maybe you have already? Well, here is my advice to you…

Forget VCs, forget the SBA, forget the bank loans, forget Visa/Mastercard/AmEx… You don’t need them.

Take the CASH you have, and start building your business one customer at time. If you don’t have the CASH you need, then it’s probably not time for you to be starting your venture.

Forget the beta and forget free. Get your product out in front of everyone and start charging! Now is the time for a business model that makes money. (is the freemium model dead?)

Save the money you’re making and don’t blow it on stuff you don’t need. When you do need something, pay for it with the cash you’ve saved.

Sounds like common sense right? You would think. However, here in DFW we’re already seeing business that depend on short-term credit starting to falter, as noted by Alex Muse in this post today on the Texas Startup Blog.

There is a financial guy on the radio and I love one of his sayings:

“… where cash is king and the paid off home mortgage has taken the place of the BMW as the status symbol of choice.”

A lot of people in the business world drive BMWs I’m sure, but how many operate their businesses without debt?

Of course, in the business world there are many situations in which credit of some sort is a necessity and it would certainly be difficult to completely eliminate it. If you have to use, do so wisely and with careful consideration.


Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |  

3 Ways to Raise Startup Money

October 3, 2008

Asheesh Advani of Entrepreneur.com has an article over on MSNBC covering three honest ways to raise startup money. He points out a number of pitfalls that are common to entrepreneurs and then gives these three things:

  • Develop financial projections that are rooted in verifiable assumptions
  • Write paychecks that don’t bounce, but increase as the business grows
  • Get your clients to compete to be first

These are all great points but I especially like the last one, on many levels. It’s no secret that people love to be first. It’s like an insatiable thirst with no quencher. When you have customers competing to let you provide them service/product/etc, you are sitting in a great position to grow your business in the right directions on your terms.

Guy Kawasaki recently said in a talk that if you go to a VC and say, “I need money to scale”, they will invariably respond with their checkbook.

Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |  

Dallas Based Astadia Inc. Grabs $7MM in Funding

October 2, 2008

Astadia Inc, a SaaS company here in Dallas, announced yesterday they closed a second round financing deal for $7MM to diversify their product offerings. Astadia is the largest Salesforce.com partner.

The round involved North Atlantic Capital based in Portland, ME and Kodiak Venture Partners based in Boston, MA. As part of the deal David Coit, Managing Director of North Atlantic Capital, was added to the Astadia board of directors.

You can read their Business Wire press release over at MarketWatch.

Written by Bradley Joyce · Filed Under Blog, Venture Capital |  

Pitch Camp Dallas is COMING!

September 21, 2008

Alex Muse over at the Texas Startup Blog announced today that he and Christopher St. John will be hosting Pitch Camp on October 18th. If you’re interested in participating, leave a comment on Alex’s blog or shoot him an email. Here is the post from Alex:

Christopher St. John and I are hosting ‘Pitch Camp‘ on October 18th, 2008 at the INFOMART (in Dallas, TX).  The all-day event (10AM to 5PM) is designed for up-to 50 entrepreneurs. Pitching your startup to prospective employees, angel investors, venture capitalists or journalists can be daunting for the most experienced entrepreneur, must less the startup novice.  Pitch Camp will be very interactive and hands-on – come prepared to work.  This isn’t a spectator sport (oh and you won’t be getting funded, this is purely an educational event). Here is the tentative agenda:

  • 10:00 – 10:30 How to pitch to angels and venture capitalists.
  • 10:45 – 11:15 When to use a deck and when to demo.
  • 11:15 – 11:45 How to pitch to journalists.
  • 12:00 – 1:00 Lunch/Networking
  • 1:00 – 3:00 Pitching workshop (the group assists 1-3 entrepreneurs prepare a pitch)
  • 3:00 – 3:30 Real live pitching (1-3 entrepreneurs, prepared by group will pitch)
  • 3:30 – 4:00 Pitch feedback from panel of 1-3 real live venture capitalists and angel investors
  • 4PM-5PM Beer/Networking

What we need (i.e. how you can help):

Christopher is working to select 1-3 entrepreneurs who would be willing to become the guinee pig or case study for the workshop.  If you would like to be one of three entrepreneurs whose pitches we work on, please comment on this post with a) who you are, b) what you are working and c) what stage is your idea/business.

While Christopher is working to recruit pitchers, I am responsible for finding the coaches/trainers.  We need two or three venture capital or angel investors and one journalist who are available to give a 20 minute talk on how to pitch between 10AM and Noon.  Additionally, we will need two or three venture capital or angel investors who would be willing to judge and critique pitches between 3PM and 4PM.  If you can help out with the morning or afternoon please ping me at amuse@m-ven.com.  If you are simply interested in providing advice or suggestions please post those to the comments.

If you are interested in attending, please RSVP on the Upcoming site here.  The event is sponsored by SpringStage startup network.

Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |  

Four Things Founders Need to Know About Their Stock

September 15, 2008

John Bautista, a partner in Orrick’s Emerging Companies Group, has a very informative guest post over on the Lightspeed Venture Partner’s blog.

John dives in to some of the details surrounding Founder’s stock and some key things every founder should know when they form their company:

When entrepreneurs start a company, there are four things they need to know about their stock in the company:

• Vesting schedule
• Acceleration of Vesting
• Tax traps
• Potential for future liquidity

Get the details and the rest of the post HERE

Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |  

Guy Kawasaki on Raising Venture Capital

September 4, 2008

Guy posted 3 videos on his blog today that give his take on “the art of raising venture capital.” I love just about all of his advice (across the board) and think these videos are really helpful for new entrepreneurs. Here they are!

 

Written by Bradley Joyce · Filed Under Blog, Startups, Venture Capital |