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“Bootstrapping vs Raising Capital” are the binary terms that many people view the continuum of fundraising options. In my many years of experience, this is a gross misunderstanding of what lies ahead for new founders. Money doesn’t usually fall from the pockets of the well informed investor like rain in a storm. A more likely title should be “you are going to be bootstrapping because most people won’t give you a lot of money for a long time.”. Not quite as appealing of a title? …


The problem with this world is that too many people are full of shit (or water depending on the proper idiom in your neck of the woods). It has probably been this way forever, but I wasn’t around until a few years before Teddy Ruxpin hit the scene so I couldn’t tell you what it was like before that. Since the beginning of my time as an amateur social observer in the early 90s (so starting when I was 6), this is as exciting a time as I can remember for the bullshit ecosystem. Why? Because the world continues to “get flatter” as Thomas Freidman has so eloquently championed (and recently denounced). This means that the number of people who are full of shit (water) and are able to contact you directly has exponentially grown over the past few decades. …


I love reading books about startups and business. I thought I’d share some good ones I’ve read in the past year or two with a quick blurb about why you might like them if you are looking for something new and interesting or are in a rut. This list got kind of long as I was writing it. I really enjoyed all of them so I would have felt guilty leaving any out.

The Outsiders by William Thorndike

This tells the story of eight different CEOs at large companies and provides insight into their decision making process. I personally like this one because coming from the startup world I reflexively viewed the world from a different lense (more product and sales oriented, less financial). This one opened up a new perspective for me in terms of thinking about businesses from the vantage point of capital allocation decisions. That was really helpful. Most startup founders probably aren’t thinking about making acquisitions, but this book got me thinking about situations where that might make sense as well. …


One of the most frustrating elements of working in a team with multiple stakeholders who have various priorities (ie sales, marketing, finance, engineering, etc) is that it’s easy to lose sight of what drives a digital business forward. Most industries in 2020 are extremely competitive and the days where you can skate by with a crappy product and good marketing are behind us. The next generation of digital marketing is going to be driven more by great product experiences and organic growth than by paid media. …


NOTE: How you approach these steps can vary quite a bit based on how your company is performing, the market you are in and your personal network.

I can speak to my experience selling a company that I bootstrapped quickly to a few million dollars of annual revenue in the mobile programmatic advertising space.

1. Talk to some bankers. At almost every revenue level and company sector, there are people who specialize in this process. Keep in mind that talking to bankers, doesn’t mean that you need to use them. They can provide insightful information and also signal that you are open to selling your company without you needing to stand on the corner with a big “FOR SALE” sign.
2. Talk to investors. You never know if you will be successful in attracting suitors and even if you have some traction, you’ll want to retain some leverage. If you have a term sheet for investment or potential interest from investors that can be a vehicle to provide some leverage (maybe not as good as multiple interested buyers, but better than nothing). You may also end up deciding that you’d prefer to take the investment and try to grow.
3. Understand the metrics that drive value in your industry. In AdTech for example, companies (at least in 2014) we’re valued off top line revenue. In other industries, its EBITDA. Be aware of your industry so you can set expectations and negotiating ranges correctly. This leads to #4.
4. Be realistic. If your company is a rocket ship, this should give you some optimism that you’ll be able to bid up buyer offers…but if your company is doing OK or poorly you’ll want to set expectations in line industry metrics and be more open minded.
5. Accounting diligence. Make sure that all of your accounting and financial statements are in order. Ideally use a GAAP accounting method. (Most) people are not stupid, so you likely aren’t going to pull the wool over any eyes with accounting tricks. You’ll just make people suspicious.
6. Product (or service) diligence. Whether you are a tech company or some other kind of company, be prepared to answer a lot of specific questions about how your product works.
7. Time. This process can take a very long time even after you sign an LOI with a prospective buyer. I had no idea how long a Purchase Agreement could be until I went through this process.
8. Purchase Agreement levers. If you are fortunate enough to receive a purchase agreement from a prospective buyer, read it thoroughly with your lawyer and make note of all the various possible levers for negotiation. Even if you think some elements are trivial (ie transfer taxes), you can get proverbially “raked over the coals” if you aren’t aware of them as negotiating levers on other points you care about.
9. Get a lawyer with experience negotiating deals in your space. They will have an understanding of whats “market” for each element of the agreement so, at a minimum, you don’t screw yourself.
10. Integration. Remember that after you are acquired, in most cases, you will end up working with the company that bought you. This is where a lot of unhappiness and failure takes place. It’s very important to plan for the integration between the two companies. This means answers to questions like specific roles for everyone (there should be no ambiguity even if it requires tough conversations), a timeline for the company product or services to become a part of the larger company offering, any sales and marketing changes. …


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I read an article last week in The Athletic about Washington State football coach Mike Leach. He has been really successful as a coach and has consistently produced high flying offensive teams with quarterbacks posting impressive statistics. He is also known as a very eccentric character. The article interviewed many of his former quarterbacks and players to get insights into his tactics and his generally uncommon behavior.

I found it to be super insightful. His advice and strategy for quarterbacks? “Throw the ball to the fucking open guy”. It’s not such a simple thing to actually do, but the goal is pretty obvious. Refreshingly straightforward. What does this have to do with technology and startups? So much of the time in my business experience people choose to overcomplicate concepts for self serving reasons; to make themselves seem important, to discourage others from realizing they are capable of doing the same tasks without spending money on an “expert”, etc. …


3D Printer, image: unsplash.com

About 6 months ago, for whatever reason, I really wanted to learn more about 3D printing. Probably some sort of ⅓ life crisis (if I live to be 102) and the feeling that technology is flying forward like a rocket ship and I am being left in the dust.

I had watched a number of YouTube videos and read a bunch of articles, but I still wasn’t satisfied with understanding how it worked or how I could make practical use of the technology. I hope this short article can help you understand the basic “how” and “why” of 3D printing.

I’d like to give a special shout to John Kray and Zach Rose at HydraResearch3D for helping me get a basic understanding of the space and helping me to actually print some prototypes with their new Nautilus printer. …


Image: freepik.com

There are many different approaches taken to both vetting and valuing an early stage startup company (with high growth aspirations). I wanted to share a few of them to give you a picture of what that VC you are hoping to talk to might be thinking about. Hopefully this will help you empathize with their perspective and understand what might be going through their mind when considering your company.

VETTING:

Typically, an investor (or investment firm) will have some thesis or lens through which they view the world of investments available to them.

This is often a function of their own experience in certain industries, people they have worked with before, past investment data, etc. …


Image: Freepik

I am not an early stage VC but recently had a chance to mentor a large number of startups 1-on-1 in a very condensed period of time. All of the startups I worked with had a live product and some level of traction. The experience left me with a much more visceral understanding of how hard it is to pick investments at this stage and actually be helpful to early stage teams.

I was slightly apprehensive when I was first asked to mentor all of these startups in such a short time period because I wondered “what the hell do I know about these industries”? Usually when working with startups I have more time to learn about their industry and digest information. In any case, I overcame my concerns pretty quickly because I knew it would be a lot of fun and that I would learn a lot. I wanted to share some reflections on what I learned about how to be most helpful if you are lucky enough to have a team of people care about your opinion and you are not an expert on their industry. …


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We have all been on the receiving end of product and sales demonstrations. Have you ever wondered why some people can make a boring product seem exciting and other people can make any product seem like watching paint dry? Here are some practical tips for winning customers and influencing others (and having more fun).

  • Be Sincere

Everyone has seen Glengarry Glenross (and if you haven’t you should). It’s a great movie but it’s not real. When it comes to selling any product, building trust is your best ally and most effective sales tool. Acting like an asshole does not help you do that. You should invest in developing a genuine enthusiasm for your own product and also learning about how you can improve the life of your prospect. I know that sounds ridiculous and cheesy, but there is nothing in the world more powerful. Dale Carnegie was onto something. It is very obvious when this is not the case and there is nothing more irritating than listening to someone talk to you like they are a “feature showcasing and objection handling bot”. No one wants to feel like the person they are talking to is trying to put a vacuum cleaner in their pocket and extract money from them. You can be professional and be yourself at the same time. They aren’t mutually exclusive. …

About

Charlie Lambropoulos

All things startup and technology. Founder of https://www.codecatalyst.co — A product development studio for high growth startups and leading brands.

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