Photo by Brendan Church on Unsplash

First, it is time-consuming. There is no way around this. Second, there is a tried-and-true process that will get your round closed as efficiently as possible.

I’m a big fan of looking for the “ruts in the snow”. So, follow the well-trodden path below to save yourself from a lot of stress:

Are You Ready?

I’ve been the CFO in several software companies that have all raised money. I am also an active angel investor in B2B SaaS companies. Both roles have given me a vantage point to see how rounds are being done, by who, and how in the Birmingham startup ecosystem.

A lot has been written about raising money to fuel your startup or scaleup. I’ll save you trouble and list a couple that are really good:

But, I’ve heard grumbles over the years from Birmingham startup folks that “no one is funding startups in Birmingham”. I know funding is happening, though. I think the problem is awareness.

This is a short post because it is brutally honest. Years ago, a friend asked me to share some thoughts about what it takes to grow a successful software company — not just founding it.

The following flowed out of me in a few minutes without any self-censorship:

It’s been over a month since I last wrote an article on digital currencies and decentralized trust networks. A lot has happened in that time.

What are these paper and metal things?

Bitcoin had a hard fork, Microsoft debuted the open-source Coco Framework to make it easier for developers to use distributed ledgers in applications, and the Ethereum founder unveiled “Plasma” to address scaling issues with Ethereum. But, who cares? What can you do with digital currencies and, more importantly, the decentralized trust networks?

Where the rubber meets the road

In the last article, I talked about the symbiotic relationship between digital currencies and the decentralized trust networks, which is often implemented as a blockchain. You can use digital currencies to buy things — from Overstock, Expedia, and Newegg to name a few. …

Decentralized trust networks are the core of the thing we are talking about when we discuss Bitcoin, Ethereum, and other cryptocurrencies. Cryptocurrencies rely on decentralized trust networks and vice versa. They stack.

Decentralized trust networks

Blockchain is a popular way to implement a decentralized trust network. In my previous article, to simplify things, I intentionally did not use the term “blockchain” — instead, I just described it. The blockchain is the ever-growing, public ledger of transactions that network users copy to their computers and keep updated (through software applications called nodes). Here are node maps for Bitcoin, Ethereum, and Litecoin.

Decentralized trust networks* — also called consensus networks — that use blockchain depend on cryptocurrencies to provide the incentive for keeping the whole network running smoothly. Bitcoin, Ethereum (for now), and many other cryptocurrencies use…

Several friends have asked me about Bitcoin, blockchain, and so on. I’ve sent them articles, given long-winded explanations over coffee, and taken them through actual transactions using my phone. As the frequency of these sessions has increased, I decided it made sense to spend some time pulling it all together into a series of articles.

Photo by Jeff P / CC BY 2.0

My goal with these articles is to give you a simple explanation of the technologies that go into cryptocurrencies so you’ll feel confident enough to decide how much more you want to learn and where to go to learn more. Along the way, I’ll point out the various rabbit holes you can go down. Some of these rabbit holes go very deep and shoot off in many different directions.

Simplified writing on purpose

Since this is an introductory series, I’m going to take some liberties with terminology and explanations. Technically, some of my explanations will be more or less correct, but I’ll leave out…

Sometimes when things go well, you may not realize what could have gone wrong. This is why you hear that you can learn more from failure than from success. I get it, but I think success stories can also be good learning opportunities, as long as you can recognize what could have gone wrong and why.

Photo by Comrade King / CC BY-SA

Dancing through a minefield

The guys behind Codetree wrote a fantastic article on their adventures with buying their SaaS business. Their blow-by-blow diary from when they first started looking at the business until they sealed the deal is an instructive read for anyone trying to understand how software businesses are really bought and sold. Even though it was a small business at the time ($48k ARR), the core process and emotions involved are basically the same even when you add more zeros to the numbers.

What must be true?

When you set out to buy a software business, there are a lot of things that can go wrong…

I like to learn, especially when it can be done cheaply. There is nothing cheaper but yet so valuable in angel investing as having good mentors to help you. I decided to a take some time to outline lessons that one of my very experienced mentors gave me.

Photo by Jonathan McIntosh/ CC BY-SA

Pre-define your investment profile

Valuation and structure actually do matter

A high valuation and/or bad structure can make an investment in a good company be a bad investment. But, the reverse is not true. …

5x ARR, 3.6x ARR, 10x ARR

If you have been in the SaaS world long enough you will hear people toss around valuations based on ARR as if they are irrefutable laws involving just three pieces of information:

Photo by Darren Price / CC BY

A Ferrari can go 60 MPH. A VW Bug can also go 60 MPH. Buying a Ferrari will put a noticeable dent in your bank account. Getting a VW Bug should be a little easier. Why?

“¡Hola! ¿Cómo puedo ayudarle?” I slightly panic and concentrate on taking a measured breath before I speak. “I can do this”, I say to myself as I smile and say, “Hóla, quisiera un menú, por favor.” The waiter politely nods and briefly disappears before reappearing with two menus for my wife and me. I suddenly feel like I’ve just transformed into the Dos Equis spokesman.

Language matters

I’m surprised that I held onto the following misconception about language for so long. I used to feel, in some weird way, that some people were predestined to fluently speak more than two languages. I knew that being brought up in a two-language household produced bilingual speakers but to speak three or more languages seemed like a talent you had to be graced with at birth. Further, I ignored evidence that clearly pointed out that being native-level fluent at more than two languages is not as common as I assumed. In fact, the more we traveled the more I realized…

Jonathan Sides

Liked to build things as a kid & still do.

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