Will your startup succeed? — a self checklist (part 2)
At Future Branch, we’ve learned a lot about startups. We created a self-checklist to help determine if you’ve got the mettle. Find part 1 here and part 3 here.
The Business
Now that you have a problem to solve, users experiencing that pain, and a possible solution, it’s time to look into the business side of things. You need a business plan that will survive the startup time period.
1. It takes money to make money
Unfortunately, running a startup costs money. You should have enough money to live and operate the business for 18 months, this is called runway. This is long enough time that you can pivot your solution if investors aren’t interested. Your startup journey will take at least 2 years and hopefully 3 or more. Having a runway of 18 months gets you close enough.
2. Show me the money
Your business needs to make money. You should be generating revenue within 9 months. You need to have monthly reoccurring revenue (MRR) and it needs to be growing every month. You need to create a sustainable business.
Series A investments come when you show that your business is viable and having MRR is one of the best ways to prove this.
“Investments come when you show that your business is viable.”
3. Give it away now
Are you a control freak? By the end of your startup journey, would you be comfortable owning less than 10% of your company?
Would you rather have 50% of a 10" pie, or 20% of a 16" pie? It’s worthwhile to share equity in order to grow your overall value. Having 100% of nothing is nothing, but having 10% of a $10 million business is a million bucks. You’ll need to be comfortable owning a small portion of the business by the time you exit.
Next
We’ve come to the end of Part 2. Next we’ll learn about the team requirements. Please explore my other stories here. If you’ve liked this, please hit the 👏 or follow. Thanks!
Oh and don’t forget to take the self-checklist.
