Can Portland become a startup hub? It’s a question that we discuss time and time again.
We have the hackers, but can we attract the right kind of investors? Can we create a startup environment that meshes with the Portland—and Silicon Forest—culture? Can we build a sustainable startup engine?
I believe we can and I know I’m not alone in that regard.
Now, Paul Graham, founder of the well-known early stage startup incubator Y Combinator, has provided another vote of confidence for the Rose City. In a post entitled “Can You Buy a Silicon Valley? Maybe.” he proposes a way to fund and retain startups “for a particular city.”
It’s an interesting argument. But what I found most interesting was this (emphasis is mine):
How well this scheme worked would depend on the city. There are some towns, like Portland, that would be easy to turn into startup hubs, and others, like Detroit, where it would really be an uphill battle. So be honest with yourself about the sort of town you have before you try this.
So now, it’s not just obvious to us, anymore. It’s obvious to the outside world, as well.
It seems like there’s an opportunity here. And we shouldn’t squander it.
For many “side project” entrepreneurs, the most difficult part of getting an idea off the ground—and out of the garage or basement—is finding that business partner that complements their skillset.
Business people with good ideas can write all the business plans they want, but they’ll eventually need a developer. And developers can crank all the code they want, but eventually they’ll need some way of approaching the market or getting more funding. But how are they supposed to find one another?
After some networking time, we’ll have each idea person looking for a team give 2 or 3 minute elevator pitch, have each of them head to their own corner of the room, and let people circulate around to check out the startups that sound interesting to them.
The first speed dating event will be held Saturday, February 28 from 1 – 4PM at the OTBC (located in The Round in Beaverton, right on the MAX line). Best of all? It’s all free.
After spending the better part of the year researching the Portland startup community, Carolynn Duncan has come to the same conclusion as the many of us: Portland is one huge R&D shop. Which is great for innovation. But not always as good for revenue-generating business.
Carolynn writes:
The pre-revenue, pre-funding entrepreneur community lacks a core understanding of the fundraising process, and perceives that there is a lack of seed capital.
Local investors and funds appear to be few & far between, while investors outside the area fly between Seattle and San Francisco, without paying serious attention to what’s happening in PDX.
Geeks prefer working on their own side projects independently, rather than joining a startup, or taking their technologies to a commercialized level.
In essence, the area as a whole interacts much like a national laboratory or research university, with results being that the entrepreneurial talent neglects to convert side projects into startups, and the geeks, while coalescing as a supportive & sociable community, tends to be underutilized/underemployed.
So how do we address that problem? Traditional venture capital models? No. How about something that better meshes with the existing startup culture? An incubator along the lines of Y Combinator.
The goal? Incubate 10 Portland startups capable of generating at least $1 million in revenue per year—by August 2010.
Ten by ’10. Get it?
But Carolynn doesn’t see this as a problem at which one can just throw capital. It requires something more educational. More focused on mentoring. Using the expertise she’s gained on the VC side of the desk and her co-advisors—Mark Grimes and Josh Friedman—have gained running (and in Mark’s case, selling) their own startups.
It’s an intensive bootcamp, but there isn’t any money going to the startups. With Portland Ten, the startups are paying:
[We’re looking for] an entrepreneur right on the cusp of starting a high-growth business. A teachable entrepreneur who will commit to the required activities, and the optional activities when possible.
An entrepreneur who will consider themselves the first investor in the project and raise the funds to pay the $500/month program tuition.
If you’ve got a side project that you’re convinced will be a viable business, it’s time to grab those bootstraps, my friend—and check out Portland Ten.
Why is the Brady Bunch theme song running through my head?
Maybe it’s because I’ve just heard the story of a man named Raven and a woman named James who’ve decided to combine their incredible talents.
Raven Zachary started his own iPhone consultancy last year. And he’s been overwhelmingly successful. Being involved in the Obama iPhone app can do that to you. And helping with something like iPhorest only continues the momentum.
So, he decided it was time to do something more.
“Since the Obama app, I’ve encountered some amazing brands and amazing opportunities,” said Raven. “And they were affecting my ability to remain an independent advisor in the iPhone community. It became very clear to me that there was the opportunity to build an iPhone agency.”
Enter James “@semaphoria” Keller, a wizard at Interaction Design, Information Architecture, and User Experience with a rich agency history. Her most recent gig? Serving as Interactive Strategist at Wieden + Kennedy.
“I love technology and how companies communicate with their community,” said James. “Getting to really dig deep and find a place for that within such a new—and gorgeous—platform is really a dream come true. It’s a once-in-a-lifetime, follow-your-heart pursuit.”
Now, they’re joining forces to form a strategic iPhone agency.
Why an agency model instead of pure app development? Raven and James are both interested in helping people develop and interact with their communities. The iPhone platform is a means to that end—albeit an incredibly creative platform for doing so.
The agency will also likely build apps of their own—Andrew Pouliot and Jonathan Wight, the lead dev on the Obama app, help round out the team—but it’s the strategy on which they will focus the majority of their time and effort.
Not only is this big for all of them, it’s big for Portland and its continued place in the mobile space.
“I think it’s a great fit for Portland because of the long history of creative services and technology,” said Raven. “We’re focusing on both. It’s really more of an agency than a development shop. But it’s really a small, small boutique agency.”
“I think you can be creative and strategic and develop well,” James said. “It’s a uniquely Portland thing.”
So what’s it called? Well, they don’t know yet. But you can find them at Raven.me.
“Maybe instead of Raven.me [Raven’s current consultancy], we can call it Raven.us?” said James.
A steady drumbeat of cutbacks in Oregon’s high-tech sector has reduced the number of technology jobs in the state to its lowest point in nearly three years.
Wait a second. Where’s the positivity? Where’s the “credit where credit is due”?
Well, that comes at the end of the article. From which I’ll judiciously quote (passage emphasis is mine, not Mike’s):
Oregon’s tech industry has one distinct bright spot: software.
Long the weakest link in Oregon’s technology economy, software has emerged strongly over the past few years—spurred by a vibrant community of open source software developers and Web services companies that require little investment capital to get started.
Software jobs are up 12 percent during the past two years, and now number 9,500. Although still a relatively tiny part of the overall state economy—which numbers more than 1.7 million jobs altogether—software is the fastest growing part of the high-tech sector and one of a small number of industries that is defying the broader economic slowdown.
Much of the activity is concentrated in Portland’s Old Town, home to a cluster of companies that develop software for the Internet. Examples include password-protection technology from Oklahoma transplant Vidoop, and collaboration tools from Jive Software.
“We’re just this wonderful hotbed of open source, brew-your-own-softwareville,” said Harvey Mathews of the Software Association of Oregon. “It’s a tight community, so we all help each other out. Which isn’t the case in lots of other industries.”
Can I get a “w00t!!!1!”? This is exactly the kind of thing we want to see. The kind of recognition you deserve. And the reason I continue to relentlessly document all the cool things you’re doing.
You’re making it happen. And you’re blowing the curve.
And for that, you need to congratulate yourselves, Portland and Silicon Forest startups. You deserve it.
Keep up the good work. Stay focused. And keep working to on that code.
I’ll be sure to let everyone else know: they ain’t seen nothing yet.
Founded You Software, a Portland company that adds features and functionality to the software you already use.
Spun Attensa out of You Software, creating a company focused on building an attention-based RSS management system that garnered $12 million in venture backing. (For more information, I recommend reading Marshall Kirkpatrick’s write-up on Attensa, back when he use to write for a little blog called TechCrunch.)
Now, Barnes has founded another startup. And much like the other companies he’s founded, it’s designed to help you deal with a glut of information by making the products you already use better.
But this time, it’s all about the Web.
Designed for bloggers, Panels uses a small panel to provide additional information about companies that are being covered, much in the vein of services like Snap’s Snap Shots:
Panels appear for any company or organization ranging from the biggest public companies such as Apple, Ford, AT&T, or WalMart to up and coming startups such as WebDiet (launched at the Demo Fall 08 technology conference this week) and Yammer (launched at TechCrunch50 this week and chosen as winner!) By the time we go live there will be millions of entities in the system with improvements and features appearing almost daily.
But to me, the most interesting thing about Panels is the depth of content that it provides.
Unlike traditional “additional information” popup services, Panels provides a multi-tab view of information, including:
“About” – Basic company and contact info, URL, logo, and summary [including details from Portland-based company-information wiki AboutUs]
“Site” – A full preview of the home page, stats, tags and other goodies about the actual web site/blog
“Map” – Beginning with Google Maps, and others to follow, a place for geographic data
“News” – Headlines, Blog posts, News, Press Releases and more from a variety of sources
“Jobs” – Employment listings across numerous providers such as monster and simplyhired
“Financial” – If a public company, real-time info and quotes appear in several sub-categories
So why use Panels? Primarily, to provide a much richer set of information on the companies to which you’re linking—while keeping people on your site.
Basically, you’re eliminating the blind clicks that tend to draw the attention-deficient Web surfers away from what you’re trying to convey.
Also interesting? The inspiration behind the development?
Panels were inspired by the nutritional panels found on food that are mandated by the federal government. Like nutritional panels, our panels have a standard text-centric user interface that delivers consistent, predictable, detailed, real-time information from a variety of data sources across several categories.
Now, if I could only tell if the link was going to be nutritional or just so much Web junk food.
Panels is currently in closed beta. For more information or to see Panels in action, see Craig’s post introducing Panels. Or to request a beta account, visit Panels.
I’m happy to see that our beautiful summer weather continues to hang around. But from an event standpoint? It looks like summer’s over.
If this week’s event schedule is any indication, people are clearly ready to get back to business in the Portland Web and startup scene.
There’s a lot going on, so I thought it might be helpful to provide a round-up of what I’m tracking. And if I missed your event (it happens), please take a moment to comment below so that we can get it on folks’ calendars:
Monday at 6 PM, it’s Mobile love, Android style #5. This meetup is an informal opportunity to discuss all things android-related. The android space is heating up again. The HTC Dream phone received FCC certification in August and will be sold by T-Mobile by November if not earlier. 0.9 of the SDK was released with 1.0RC1 around the corner.
Tuesday at 9 AM, you’re invited to watch startups pitch at the FundingUniverse Portland LivePitch. The audience at LivePitch receives $100 of “fake money” to “invest” in their favorite entrepreneurs, with prizes awarded to both a panel and audience favorite. There will be 60 minutes of pitching, and 30 minutes for general networking.
Tuesday at 7 PM, the Portland Python User Group will be meeting, featuring Leo Soto, a Jython GSoC hacker, will be presenting his DjangoCon 2008 talk “Django on Jython.”
Oregon Entrepreneur Network not your style? Sorry, you don’t get to take a night off, because there’s also the first Refresh Portland starting at 6:30 PM. Refresh Portland is a monthly talk (held every 2nd Wednesday) about design, front-end development, usability and web standards. Sound interesting? Check out the new Refresh Portland site.
I don’t see anything on Thursday, for obvious reasons. But if that changes, I’ll let you know. I knew it. Thanks to Joe Cohen for the tip that Calagator lists a Thursday event to include in this list: Thursday at 5 PM is the Luz Codesprint. Luz is a Ruby music visualization playground, aiming to create a simple, beautiful GUI for artists, and simple, beautiful code internally! This event is open to Everyone, from coders to artists to musicians, everyone’s input and contributions will be super useful.
Friday, a bunch of local venture capital types will be gathering out at the Intel Jones Farm campus in hopes of seeing a Tesla Roadster. I hear there may be a conference there too. It’s called the Silicon Forest Forum, an event that features entrepreneurs, venture capitalists, and management executives who know what it takes to create and run successful ventures. For more information and a speak line-up, visit the Silicon Forest Forum.
The one Friday fixture that needs no reminder—Beer and Blog—starts at 4 PM at the Green Dragon. This week is a “topic” week. So stay tuned for the details on the speaker.
And beginning Friday evening and running through Saturday its From Side Project to Startup. I don’t have to tell you that launching a business into the wider world can be daunting or confusing, but it doesn’t have to be. If you learn from other people’s experiences. How? Join this hybrid scheduled and unconference event designed to take the entrepreneurial conversations that started at BarCamp Portland and Startupalooza to the next level. To take a peek at the complete agenda, visit From Side Project to Startup.
Whoof. That’s a lot of activity. Even for our usually hyperactive tech scene.
I’m going to be trying to make as many of these as I can—especially the ones where I’m lucky enough to be “on the agenda,” as they say.
Hopefully, I’ll see you at a few of them, too.
Oh, and one last thing. If you’re interested in keeping track of what’s happening in the Portland Web and startup scene, feel free to join the Silicon Florist group on Upcoming. That way, you’ll always be up-to-date on the latest and greatest events.
[HTML1]You just launched your new startup. You’re caught up in the excitement and energy of it all and happy to see your baby in the world… Here’s the catch, the deadliest: You can’t change or adapt your site because you hired an agency to build it.
Please know that I’m not picking on Agencies here… I’m picking on the entrepreneurs that hire agencies to build their startups. We have some of the best agencies in the world here, but you should NOT hire them to build your startup. (I mean no offense to any agencies that are reading this, but for startups to work with you they risk the future success of their business.)
Agencies Build Great Websites
Startups are not just websites. With a website for a small business you can get away with building it out and then other than keeping the content fresh and minor tweaks here and there, not mess with it much for a year or so. With a startup, you’re going to change, modify or add something major within the first few days, sometimes even hours of your site’s life. In some cases between the original site map and spec phase and the actual launch of the site, you’ll change something major.
No Ability to Change or Adapt
With any agency built site you’ll be able to update most of the content, maybe even add some sub content pages in your CMS area… But the startup world is extremely fast and chaotic. In order to survive a startup needs to be constantly evaluating their service, the market and the latest industry trends. When you exist in a market where a company can pop up overnight and completely shake things up, you need to be ready to adapt.
It is important to keep in mind that you can’t possibly create an exact plan for the first 18 or even 6 months of your startup. 50% of what you do will simply be wrong. You need the flexibility to constantly be testing out ideas, trying new things and you need the financial freedom to do a lot of the wrong stuff. If you’re paying an agency to be wrong 50% of the time, you’ll run out of money very quickly.
Agencies Are Not Cheap
I’ve worked in the agency world and I know that there are a lot of overhead costs to keep a small company afloat… I also know that you get what you pay for and getting great work from an agency means having to spend some money. But for the same price a startup would pay an agency to build their site, they can hire a solid designer and a talented programmer for an entire year. With your own developer you can test out ideas and be ready to respond quickly to problems and opportunities.
Lack of Speed Kills
Bids, Quotes, Objective Summaries, Wireframes, Etc. Speed kills when driving drunk. but it is what keeps your startup alive. The web world has the attention span of a goldfish and to stay on top of their rapidly shifting focus, you need to stay tuned in to what your users need / want.
None of the Founders Can Actually Develop the Website.
It should be a huge red flag for the founders and their early investors when none of the founders can develop the site. This isn’t to say that a startup without any developer founders can’t succeed, but it will take a bigger financial investment and be a bit slower to get it off the ground.
When you don’t hire an agency, you have to know what you’re doing… you don’t have to know how to program your site… but you should know why you built it in PHP rather than ASP, why a certain framework is best for you or why you should custom build, etc. It is hugely important that somebody on the early team can build the site… or you immediately hire on a developer. If you simply can’t learn enough about what you’re trying to start to manage some technical contractors than find a partner who understands the technical part… If you just can’t learn it, then don’t start your site.
A Real World Scenario
Fantasy Land: You love sushi. You live on the stuff… You can rattle off all kinds of different rolls and fish delicacies… so you want to start a fishing company. You know how it generally works. Get a boat, hire a good crew, find some good fishing spots and viola! you’re rolling in the tuna.
Reality Land: You know nothing about how the fishing business actually works. You aren’t fluent in the terms… “Your sharemen are saying your prime berth is no good, so you’re talking to a banker about any naked mans that can point you in the right direction.” What kind of boat is right for what kind of fishing… long-lining, crabbing, etc.? How do you evaluate the skills of a good captain & crew? What is the appropriate equipment you need to buy to be effective? How do you know when you’re spending too much on something or not spending enough?
A Cure for Agencyitis
So what if you’re one of the entrepreneurs who has already hired an agency… or are a non-technical founder not sure how to go about learning what you need to learn to hire the right developer?
I didn’t want this to just be a harsh critique and not offer solutions, but the answer to the above question is a long answer and this post has already exceeded most people’s internet attention span. So I’m going to write a part 2 of this post with a hopefully helpful and in depth answer. Look for it here, or the coming soon www.InternetAstronauts.com – A Bootstrap Startup Blog
The Darius’ Advocate
The points above are from my experiences, but I’d love to hear your thoughts… even if you completely disagree. An agency perspective could be useful too.
—————————————————————————————————– And now on a lighter note… and sticking with the fishing theme:
6 Ways Bering Sea Fisherman are Like Startup Entrepreneurs
They Risk Big
Alaskan king crab fishing reported over 300 fatalities per 100,000 in 2005. While startup entrepreneurs rarely directly risk their lives like the bering sea fisherman, they risk their financial security, personal relationships and often put huge burdens on their loved ones.
They Love What You Do
If you’ve watched the deadliest catch than you would know that Bering Sea fisherman love what they do. They hear a calling to the sea and she beats the hell out of them every season… but they come back every year because they love being fishermen. Many of them have been generations fishermen and they pass down their love of the sea to their kids.
People Think They’re Nuts
It’s hard to watch the show and not think these guys are all missing a couple key connectors in their brain. The weather is as hostile as it gets, the work is back breaking hard and you stink like fish for weeks… oh yeah, and you’ll likely get sea sick enough to know what you look like from the inside out. To the outside person, it just doesn’t make any sense. Why give up the security of a comfortable career and balanced home life in order to work ridiculous hours and risk so much? Because they love it.
They Are Nuts
Let’s face it… you do have to be a little nutty to suffer as much as they do. But crazy ideas are often the most successful. It takes that stretch of the imagination and sanity to come up with something that doesn’t yet exist.
They Smell Bad
Startup entrepreneurs definitely don’t smell as bad as a fisherman, but chaotic working hours often throw a wrench in any plans you have to do basic things like grooming, working out… and sometimes even eating and drinking non-caffienated fluids.
They Need to Be a Bit Lucky
Fishermen have Charts, Maps, Expert Team Members… and if they drop their pots where the crab aren’t it could spell disaster for the season. They also can’t prepare for the random rogue waves that have been known to steal fishermen from the decks of the boat. A startup entrepreneur can have a solid launch plan, the right team and at the end of the day… a little bit of luck could be the difference between your rockets igniting or exploding on the launch pad.
They Make Good Money
The last one doesn’t count… because if you can’t handle the previous 6, then it doesn’t matter how much money you could make it just wouldn’t be worth it. Being a startup entrepreneur like being a Bering Sea fisherman is not about the money. It is about doing what you love and doing something new, exciting and hard as hell.
—————————————————————————————————– [Editor: Thanks, once again, to Darius for sharing his ideas and opinions on the startup scene. I always look forward to hearing his insights and first-hand accounts from the trenches. For more from Darius…]
[Editor: Over the past couple of months, I’ve had the pleasure of getting into a number of fairly deep conversations with the Portland-based Back Fence PDX crew, Frayn Masters and Melissa Lion, about the power of story. You see, that’s what they do. They help people understand and formalize their stories.
I mean, technology is great and all, but the stories of the entrepreneurs in this town—the folklore—is what really brings these technology stories to life. But I could never really effectively capture that concept.
So why not let a real writer—an author—step in? Enter Melissa and Frayn—two real authors.
Melissa was kind enough to swing by Silicon Florist to write a guest post about the power of story in the world of startups.
Do you like what she says? Disagree? Why not take the opportunity to have that discussion with her, in person, at Beer and Blog tonight, where Melissa will be the guest speaker. And the beer is free. That’s right. Thanks to TeachStreet. Win, win, and, um, win.
Now, on with our story…]
The Startup’s Journey
by Back Fence PDX
Storytelling is appealing at its core because it’s gossip—that delicious thrill of knowing a person’s hidden life a little bit better. The details of the person’s story stick in the listener’s mind to be retold to others due to the history and flawed point of view of the teller. And, like a game of telephone, as it gets passed on, the little details change making the story more and more enticing, adding to the lore.
Business plans, white papers and websites all tell a hygienic story—none have a distinguishing voice—they are the musings of robots. None share the shiver of a whisper in your ear, or the eyes-wide-with-anticipation surprise of what comes next. That gossip, that raw story, is the reason blogs and social networking sites bloom. They are a break from the bullet points and style guides. Voiceless PowerPoint presentations don’t make for juicy party chatter.
People crave a voice. People desire a story.
The Startup’s Story
There is the official story of the company. And then there is the lore. It’s the legend, the myth, what Joseph Campbell calls the Hero’s Journey. Campbell identifies the elements of the Hero’s Journey as the separation, the initiation and the return.
The separation is the moment the founder decided to do something different. Why the change? What was that moment? Was he or she on a bike ride? At dinner with a friend? Suddenly woken in the night? What did it feel like when the idea appeared?
The company is initiated through its initial mistakes, trials, additions and edits. It is the discovery of what works.
The return occurs when past life is melded with the present. When the business is at once, something totally new and yet blended with the past, with lessons learned and warnings heeded or ignored. It is the after shot of the makeover story—the person is still the same, but they are improved through the trials of the initiation.
Narrative Arc
Though storytelling is a natural element of humanity and the original social networking tool, an engaging and repeatable narrative is difficult to capture. The tools of the story from plot to character to voice can be unwieldy. The craft of narrative is one learned through years of trial and error. Skilled use of the craft is what separates lore from idle chat.
Professional storytellers have a trained ear for the details of the arc; they understand that it is not about perfection, but about flaws, the real humanity of the journey. They brush aside the static of the story, the starts and stops and craft a tale that is simple, compelling and easily retold so the lore is passed like so many legends through the community.
A story crafted by professional storytellers is the beginning of the buzz. There is a twist of the unexpected, or the make-over that engages the reader or listener. It’s the whisper that starts the cacophony.
It gives even the newest companies a past, a humanity that can never be felt through white pages. It is the history that all humans relate to. A well-told lore adds value to all companies, and invites a personal connection with those who hear the tale.
By creating a lore, a start-up invites others to become characters in the tale. The Venture Capitalist wants a role, they want to be character in the story. The Angel wants to be a hero. The lore provides a structure for people to better see their potential role in the start-up.
What’s your story? What’s the gossip passed around the community? What is the lore that is yet untold?
Back Fence PDX is a storytelling series in Portland. Co-producers Frayn Masters and Melissa Lion are professional storytellers, crafting the lore of Portland companies.
Last week, I had the opportunity to attend “Lunch with a VC” hosted by Carolynn Duncan of FundingUniverse and Epic Ventures. Carolynn took the time to field questions from a number of Portland startups and consultants on what it really takes to get a venture capitalist interested in investing in your company.
I thought I’d hit the high points, to help you get your head around what it’s going to take.
Think about these 10 things before you think about pursuing outside funding for your startup
Have you really solved a problem? Just because you see a problem doesn’t mean you’re the person to solve the problem. It’s far easier to criticize existing solutions than it is to invent your own solution. And even if you do invent a solution to that problem, there’s no guarantee that that’s a business.
Are you mentally prepared? Pursuing VC funding isn’t about self esteem. It’s about business.If you want someone to review what you’re doing and give you positive feedback, Silicon Florist may be a better candidate than a VC. A VC isn’t here to build you up or inflate your ego. A VC is here to figure out how you’re going to make money so that the investment firm can make money.
Are you ready for the oversight? Angels invest their own money. VCs invest other people’s money.As such, they’re going to have different types of involvement. And different kinds of goals. What kind of involvement and what kind of goals? Read on, gentle reader. Read on.
Can you deliver on the promise? Angels look for incremental gains. VCs look for exponential gain.But, rest assured, when it comes to investing, everyone’s goal is to make money. Angels are looking to invest time and money to get more money than they had. VCs are looking to invest far larger sums to make an exponential amount on their investment. Why? To make up the for the other crappy companies they picked that are failing to return anything.
Can you give up control? Angels are going to want more control because it’s their money. Why? Well, VCs invest other people’s money. Angels invest their own money. While both of those parties are going to be extremely interested in what you’re doing with their money, it’s highly likely that the Angel is going to be more involved—because Angels will be especially interested in keeping an eye on their personal money.
Can you tell the story of the money? The old adage hold true: It takes money to get money.As a rule, VCs don’t fund ideas. They generally fund things that are already making money. For VCs, an investment is an accelerator. They invest money in order to help the company make more money faster. Not making money yet? A VC might not be the right target.
Are you ready to make the VC pitch? To an investor, the “product” the investor is buying is the business. Not the actual product that the company sells. If you’re thinking of pitching a VC, don’t do the usual “show up and throw up” product demo of features and functionality. Give the potential investor a pitch on your business, moreso than that the product, itself.
Are you planning ahead or are you too late? Always pursue funding before you get desperate.Why? Well, two reasons. First, no one likes the stench of desperation. And second, it takes 3-6 months to do the due diligence on the deal before you can get stuff going. Don’t wait until it’s too late to begin the conversation. Better yet, begin the conversation before you need anything, at all. Work on your pitch and test drive it.
Are you ready to play the numbers game? How much of the final entity do you want to own? Take this into consideration… do you want to own 100% of a $1 million company, or do you want to own 51% of a $500 million company? If additional investment is going to make for an exponentially larger pie, then it might be wise to take a cut of the bigger pie, rather than try to horde the smaller pie. Angels and VC are interested in helping you build that bigger pie, so that everyone wins.
Are you foregoing a “great” funded company in favor of a “good” company that you control? A dead company doesn’t help anyone. The longer you can reasonably put off funding, the better off you will be. But don’t kill your company to retain control (see #9). If garnering additional funding ensures the fulfillment of your idea—even at a loss of control—funding may be the way to go. Bootstrap what you can, but not if it means the loss of your pursuits.
And that’s what I took away. But as always, that’s the high-level. For the deep dive, see Carolynn’s post.
Hopefully this overview helps. Interested in getting more feedback or answering different questions? Carolynn is planning to do this on a regular basis, here in Portland.
It would be great to have you at one of the future events.
None of the Founders Can Actually Develop the Website.
Darius is an