“Things start getting more rigorous around explaining your growth strategy and go-to-market,” said Ralph Gootee, Co-Founder and CTO of PlanGrid. “You have to have a much more mature look at your business, as far as metrics go, in the B round. For instance, it wasn’t my experience that you need to deeply understand your unit economics, but during my B round, unit economics became critically important.”
“We probably did more with less than anyone but it’s a critical mass business… There’s a reason why ‘critical’ is part of ‘critical mass,'” [BlackJet CEO Dean] Rotchin tells Fortune. “The members were super supportive, the VCs wanted to see our progress continue over a longer period prior to jumping in. There are some aggressive interesting models out there today, someone will make this work.”
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Yet according to Startup Genome Project’s survey of over 3200 startups, 74% of startup failures can be attributed to premature scaling. Another key finding was that startups, on average, need 2-3 times longer to validate their market than the founders expect. This underestimation of an appropriate timelines applies unecesare pressure on founders to scale prematurely.
"Uh-oh" moment: The group splintered in half after an argument about how best to run the company, and the threat of a lawsuit loomed. "We split our equity on a piece of notebook paper. We didn't have lawyers; I didn't think we needed them," Minshew recalls. "I spent three weeks alternating between the fetal position and the whiteboard trying to figure out how strongly I wanted to fight for the existing company vs. how prepared I was to strike out and do it over."
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Business valuation is never straightforward - for any company. For startups with little or no revenue or profits and less-than-certain futures, the job of assigning a valuation is particularly tricky. For mature, publicly listed businesses with steady revenues and earnings, normally it's a matter of valuing them as a multiple of their earnings before interest, taxes, depreciation and amortization (EBITDA), or based on other industry specific multiples. But it's a lot harder to value a new venture that's not publicly-listed and may be years away from sales.


Corporate DevelopmentCorporate DevelopmentCorporate development is the group at a corporation responsible for strategic decisions to grow and restructure its business, establish strategic partnerships, engage in mergers & acquisitions (M&A), and/or achieve organizational excellence. Corp Dev also pursues opportunities that leverage the value of the company’s business platform.
I was, I now realize, exactly the right sort of person to start a startup. But the idea terrified me at first. I was forced into it because I was a Lisp hacker. The company I'd been consulting for seemed to be running into trouble, and there were not a lot of other companies using Lisp. Since I couldn't bear the thought of programming in another language (this was 1995, remember, when "another language" meant C++) the only option seemed to be to start a new company using Lisp.

On the surface, the business didn’t succeed in the first two iterations of IntroNet for the same reason that 90% of tech startups fail: we did not find a product-market fit before the end of our cash. It’s a math equation that is pretty deterministic. Why didn’t we find product-market fit? Perhaps we were solving for a pain (e.g., LinkedIn sucks) instead of a real problem (e.g., I can’t find expertise)? Did we try to change user behavior in a way that wasn’t tractable? Yes, probably all of that.
“In 1991, I—along with my business partner—suffered a financial meltdown. We had built a successful publishing company, but our growth outstripped our working capital. We simply ran out of cash. Although we didn’t officially go bankrupt, the distributor essentially foreclosed on us and took over all our assets. This was a difficult time for me personally.
Finance is undoubtedly the life-blood of any business venture. But did you know that we need to incur a multitude of expenses before our business is actually up and running? Sound scary, right? Don’t lose your heart just yet; because you can write-off the start-up costs of your business. The good news is there are several expenses pertaining to a business start-up that can be deducted from the taxable income, once it becomes operational.
Small teams are great. They move faster, way faster. If you plan to do lots of product iterations, you don’t need to communicate all the changes and get buy-in from everyone. Conversely big teams have lots of chaos every time there’s a bit pivot. Build out the team afterwards to create the complete featureset, but until then, consumer product teams can just be a few engineers/designers and the product leader. That’s <6 people.

Startups are by definition doing something new; thus, many of the challenges I deal with on a day-to-day basis are also new-- whether it's structuring a new business model, analyzing a new market, or exploring a new marketing approach. Solving startup challenges is often chaotic, messy, and ambiguous; but pushing the envelope, facing new challenges and blazing new business trails is a thrill, and keeps the job fresh.

My bottom line for aspiring entrepreneurs is this: just do it. Leaving the safety of a blue chip job to pursue a new venture was the best decision I ever made. Not only was there no shame in my "failure," there have been more rewards than I could have anticipated. The experience made me more attractive to prospective employers, and I believe it will make me a better entrepreneur in my next venture.


After careful consideration, we’ve made the decision to focus fully on building Mix and transition StumbleUpon accounts into Mix.com over the next couple months. We have built Mix to work on every browser and smartphone, to make the transition as smooth as possible. With a few clicks you can register and import your SU favorites, interests and tags — creating Mix Collections that are easily shared with friends.
Recalling the release of Sgt. Pepper in his 1977 book The Beatles Forever, Nicholas Schaffner wrote that "Nothing quite like 'A Day In The Life' had been attempted before in so-called popular music" in terms of the song's "use of dynamics and tricks of rhythm, and of space and stereo effect, and its deft intermingling of scenes from dream, reality, and shades in between". Schaffner said that in the context of 1967, the track "was so visually evocative it seemed more like a film than a mere song. Except that the pictures were all in our heads."[87] Richard Goldstein of The New York Times called the song "a deadly earnest excursion in emotive music with a chilling lyric ... [that] stands as one of the most important Lennon-McCartney compositions … [and] an historic Pop event".[88] In a contemporary music critics' poll published by Jazz & Pop magazine, "A Day in the Life" won in the categories of Best Pop Song and Best Pop Arrangement.[89]

“In 1991, I—along with my business partner—suffered a financial meltdown. We had built a successful publishing company, but our growth outstripped our working capital. We simply ran out of cash. Although we didn’t officially go bankrupt, the distributor essentially foreclosed on us and took over all our assets. This was a difficult time for me personally.
The organization costs of a partnership or corporation are generally not deductible until the business liquidates (Wolkowitz, 8 T.C.M. 754 (1949)), but, as with startup costs, a partnership or corporation may elect to deduct up to $5,000 of organization costs and amortize the remainder of its organization costs over 180 months beginning in the month the entity begins business. The regulations deem a corporation or partnership to have made this election (Regs. Secs. 1.248-1(d) and 1.709-1(b)(2)) unless the entity affirmatively elects to capitalize the organization costs by attaching a statement to a timely filed return, including extensions, for the tax year in which the entity begins business. The partnership or corporation must reduce the $5,000 maximum deduction (but not below zero) by the amount of the total organization costs over $50,000 (Secs. 248(a)(1) and 709(b)(1)(A)). Example 5 shows the tax treatment of organization costs for a corporation that incurred more than $50,000 but less than $55,000 of organization costs.
After that experience, he was determined to find a less risky method of starting new business ideas. He chanced upon the Lean Startup methodology and implemented it to test out a startup idea at only a fraction of the cost. Although it had no customer traction in Singapore bit doing things this way helped minimize the waste in time, effort and money.
MVP stands for Minimum Viable Product. As the name suggests this is the phase where a startup essentially creates the zeroth model of its core idea. It is the first saleable version of your product designed with minimum yet sufficient features to satisfy early adopters and to validate the assumptions of usability and demand basis on which the final product (or the beta) is developed.
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