About 10% of startups fail in the first year. Approximately 70% of companies go under in two to five years.
But those numbers don’t matter when you’re pressed: investors expect to see a business plan that outlines how you plan to achieve profitability in 3-5 years.
“As odd as it may sound, as a founder, there are a few key things to keep in mind that will ensure your financial model is a powerful tool for you, as well as investor-ready,” writes legal/business consultant Anthony Millin.
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In this detailed primer, he shares a framework for creating a 60-month bottom-line financial plan that covers early fixed costs, such as R&D and marketing, that generate high burn rates in the first 12-18 months.
“Remember, the goal here is to demonstrate an accurate understanding of your market and how your business scales, which is reflected in the various assumptions you use to build the model,” Millin wrote.
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If you raise the venture capital, you have to pay yourself
What is the ideal salary for an early stage startup founder? Should they be paid though?
While some investors are urging entrepreneurs to give up their salaries, Haje Jan Kamps said, “Not being able to afford your mortgage, rent [or] car payment” will have a material effect on the company’s chances of success.
“As an investor in these startups, it’s your duty to help the startup get to that stage in as short a time as possible,” he wrote.
“Telling founders not to take a salary is incredibly counterproductive on many levels.”
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In the new normal for VC, builders win
Big VC firms secure access to deals through complex strategy, research and relationship building, but looking deeply into each founder’s vision and motivation is the only way forward, says Will Robbins, general partner at Contary Capital.
With more capital readily available, “we’re not going back to a time when venture capital firms won by being the only time table at the table,” Robbins said, gathering deal flow to build a technology stack, and productivity “for LPs for decades to come.”
Big investors are bargain hunting as crypto startup prices come back down to earth.
Several of the biggest crypto funds launched in the past two years are still raising capital and hunting for more opportunities, reports Jacqueline Melink.
To understand what they want and what trends to expect in 2023, she spoke to them:
- Lydia Chiu, VP of Business Development, Ava Labs
- Tushar Jain, Managing Partner, Multicoin Capital
- Peter Kenez, Chairman, Venom Foundation
- Arianna Simpson, General Partner, Andreessen Horowitz
RevOps Released: 4 Tips to Help Teams Filter the Noise and Focus on the Big Picture
Today, one person cannot manage a B2B SaaS sales operation, which is why Chief Revenue Operations is #1 on LinkedIn’s 2023 Jobs on Rise list.
To save time from day-to-day tasks for RevOps teams to tackle “big, physical projects,” Rattle COO Apoorva Verma shares recommended methods for training sales reps, finding areas to automate, and “shaping every critical process in your business.” He said.
When your startup fails
If a fighter has no reasonable chance of winning the match, throwing in the towel is a smart move.
The same is true for startups that fail to grow: after a certain point, an entrepreneur can falsely pursue their goals and do more harm than good.
To learn more about what happens when a founder closes her own company, Ron Miller spoke with Lillian Cartwright, co-founder of Shelflife, a wholesale resources B2B marketplace.
Cartwright It raised $3 million in seed funding in 2021, but after approaching 90 VCs in the summer of 2022, “we couldn’t raise anything,” she said.
“So in the first week of February, I informed the investors in my usual regular update that I was winding down the company and returning the capital.”