Category: Disruption

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Should you raise money or bootstrap? by Elizabeth Yin

Should you raise money or bootstrap?  (By bootstrap, I actually mean raise < $250k from individuals / angels).

Having run a startup that raised money and now in running a VC, ironically, if I were starting a product company today, I would start out with the mentality of bootstrapping for as long as I could.  And, maybe, just maybe, I might consider raising more money under a few limited circumstances.

I would raise more than $250k if I had a company that:

1) Was growing 30%+ MoM in sales and my operations could not keep up to fulfill those sales

I’ve noticed for operationally-heavier companies (i.e. not SaaS businesses but generally tech enabled services or alike), it can be easy to grow your sales quickly, but often these companies need to throttle their growth, because they do not have enough people to fulfill these services.

2) Was a marketplace with high engagement

Marketplaces tend to be “winner take all” businesses, because they are only valuable if both the supply and demand sides are both liquid and efficient.  And, this happens when you have a lot of supply and demand, which means to really thrive, you need to be willing to invest in a land-grab on both sides.

 

http://blog.elizabethyin.com/post/179189593325/should-you-raise-money-or-bootstrap

 

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Blockchain, Inc: A Look At The Ownerless Company Of Tomorrow

Here’s a view of what a decentralized, all-code company might look like in its initial form.

As tech giants like Facebook explore blockchain as a means to reinvent themselves, startups are working on blockchain projects that could displace services like AWS (as with Filecoin) or loosen tech companies’ hold on personal information.

Now, in addition to transforming areas like data and payments, blockchain is shaking up traditional corporate structures. Through blockchain, companies could fundraise without stocks, operate without bank accounts, or pay employees without even knowing their names.

Could we soon see the creation of a completely ownerless company?

Below, we dig into how the blockchain-based company of tomorrow might take shape, from anonymous workforces to shared physical assets.

INCORPORATING A COMPANY WITHOUT STOCKS

Conventional wisdom dictates that startups should incorporate with taxes and stock options in mind. However, tomorrow’s companies might abandon this philosophy altogether.

According to Earn founder-turned-Coinbase exec Balaji Srinivasan,

“Blockchain companies, to build a community, only need an internet connection and a good regulatory environment… They’re open source groups that [manage internal funds in] straight crypto and might not even have traditional, terrestrial bank accounts.”

https://www.cbinsights.com/research/blockchain-ownerless-companies-future/?utm_source=CB+Insights+Newsletter&utm_campaign=8bd320cb86-ThursNL_10_18_2018&utm_medium=email&utm_term=0_9dc0513989-8bd320cb86-88412737

 

 

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These were the 10 biggest European tech stories last week

Happy Friday!

Our research team tracked 50 tech funding deals worth more than €279 million, as well as 5 M&A transactions and 1 IPO across Europe, including Russia, Israel, and Turkey.

We listed every single deal in our weekly newsletter (note: the full newsletter is now available to paying subscribers only). Here’s an extra overview of the 10 biggest European tech news items for last week:

1) Apple is taking control over the power-management technology at the heart of its iPhones in a $600 million deal with Dialog Semiconductor that also secures the German-listed company’s role as a supplier to the US tech giant.

2) Copenhagen-based visual effects startup Spektral was acquired by Apple for $30 million at the end of 2017 in a deal that was only disclosed this week. The company focused on applying machine learning techniques to image and video editing.

3) Helsinki-based Varjo, founded in 2016, has secured a $31 million Series B investment led by Atomicoto bring its technology to market as what it claims is the world’s first VR / XR hardware and software product specifically aimed at industrial use. The round, which brings Varjo’s total funding raised to $46 million, was joined by Next47, the Siemens-backed venture firm, as well as previous backers EQT Ventures and Lifeline Ventures.

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http://tech.eu/brief/these-were-the-10-biggest-european-tech-stories-this-week-october-12/

 

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The Good and the Bad of Bootstrapping

When you start a business, there are many financing options to consider — friends and family, small business loans, angel investment, VCs — but there is no textbook solution for getting a new business off the ground.

One option that entrepreneurs, investors, and average Joes love to love is bootstrapping. Rather than seeking external funding, entrepreneurs who bootstrap their companies rely on savings, early cash flow, and conservative money management. The age-old concept of the American dream lives on in the world of startups — we have pulled ourselves up by our bootstraps.

My co-founders and I have confronted the good, the bad, and the ugly of choosing not to use outside capital in the inception and growth of Ampush. Here’s my take on the double-edged sword known as bootstrapping:

Retaining Full Control

Without a board to impose its ideas, timelines or limits, we are able to be opportunistic, nimble and adaptive. We determine which strategic vision to follow. Since we don’t have to wait for approval, we can execute that vision or make changes at our own speed. We also learn at our own pace; we make mistakes but keep going. By retaining full control of the company, my co-founders — the people who understand the business best and run it day to day — and I are in control of its future.

 

The Good and the Bad of Bootstrapping

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Better Everyday: Rethinking the Standard Fundraising Deck

I see hundreds of fundraising decks each year. I’ve been doing this for eight years now, so I’ve been able to see some longitudinal trends during that time.

There are a couple trends that I have noticed emerge over the last few years that I think have become industry standard. The problem is that I think they don’t work and need to be rethought. Not sure if this is going to be true for every investor out there, but this is definitely true for me.

Below are a couple things I’d change, and a proposed structure that I’d recommend for most fundraising decks. This is what I’d recommend for founders that are raising a more mature seed or series A that has at least early signs of Product/Market Fit.

 

https://bettereveryday.vc/rethinking-the-standard-fundraising-deck-406c9061e1c3

 

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What Startups Need to Know About Regulated Markets

Posted on October 9, 2018 by steveblank

Often the opposite of disruption is the status quo.

If  you’re a startup trying to disrupt an existing business you need to read The Fixer by Bradley Tusk and Regulatory Hacking by Evan Burfield. These two books, one by a practitioner, the other by an investor, are must-reads.

The Fixer is 1/3rd autobiography, 1/3rd case studies, and 1/3rd a “how-to” manual. Regulatory Hacking is closer to a “step-by-step” textbook with case studies.

Here’s why you need to read them.

One of the great things about teaching has been seeing the innovative, unique, groundbreaking and sometimes simply crazy ideas of my students. They use the Business Model (or Mission Model) Canvas to keep track of their key hypotheses and then rapidly test them by talking to customers and iterating their Minimal Viable Products. This allows them to quickly find product/market fit.

Except when they’re in a regulated market.

What Your Startup Needs to Know About Regulated Markets

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Going from Series A to B: What tech founders need to know

VC FUNDING / THU 4 OCT 2018

As most tech entrepreneurs will know, fundraising can help you secure market share, grow your business and build a killer product, but it can also be extremely daunting and time consuming.

According to UKTN’s Investment tracker, UK founded technology businesses raised more than £4bn in 2017, with the same data showing that companies in the space have already surpassed the £2bn mark so far this year.

Raising from the right investors, at the right time, on the right terms is key for business success. So, bearing in mind that companies are operating in an extremely competitive market, we partnered with professional services firm Smith & Williamson, to host a panel discussion in a bid to demystify what the fundraising process entails for both founders and investors.

https://www.uktech.news/guest-posts/funding/vc-funding/70652-20181004

 

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The Complete List of Unicorn Companies

The Global Unicorn Club

(including whisper valuations)

Current Private Companies Valued At $1B+

Total Number of Unicorn Companies: 278

Total Cumulative Valuation: ~ $867B

What is a Unicorn Startup?

A unicorn startup or unicorn company is a private company with a valuation over $1 billion. As of August 2018, there are more than 260 unicorns around the world. Variants include a decacorn, valued at over $10 billion, and a hectocorn, valued at over $100 billion.

 

https://www.cbinsights.com/research-unicorn-companies?utm_source=CB+Insights+Newsletter&utm_campaign=f1d6a4e635-ThursNL_10_04_2018&utm_medium=email&utm_term=0_9dc0513989-f1d6a4e635-87406845