Over twenty years ago, a mentor of mine gave me some advice that I have never forgotten; I call it the “New York Times Test.” He declared his expectation that anything he said, wrote or did could end up in the New York Times one day, and he used that as a guide and to only say, write and do things that he would be proud of when they appeared on the front page.Read More
As a venture capitalist, I meet every day with two or three entrepreneurs who pitch me to invest in their dreams. (Last year, we reviewed more than 2,000 new companies.) Having done this now for 20 years across three funds, I’ve heard every kind of pitch imaginable. Here are five examples of what not to say to a VC:
“I have a big potential customer that is just about to close.”
We’re not even talking about the right causes of the diversity problem in tech yet.
For the second year now, VC firm First Round Capital has released a fantastic “State of Startups” annual report. First Round surveyed over 700 founders and CEOs of technology startups to get their impressions on the current landscape of the startup world. The survey covers things like whether or not we’re in a bubble, how the IPO market is looking, and--yes--diversity in the tech world.
If you haven’t had a chance yet, you should definitely check out the report. It’s a relatively quick read and will give you a good fix for how folks are feeling about the environment we’re in today. But I want to dig into one particular topic that is near and dear to my heart: the fact that only 3% of venture funding goes to women and a measly 1% goes to people of color.Read More
For those who follow the startup scene closely, it can be easy to get caught up in how much money a company is raising. But where the funding comes from can be just as important as the amount, because seasoned investors have a lot more to offer.
“Money is just money,” said MATH Venture Partners Managing Director Mark Achler. “The real value-add is our experience in scaling companies.”
By Will Little and Troy Henikoff
In the first three articles in this series, we looked at the big-picture motivation for startup financial modeling, why it’s important to start with your assumptions, and how to practically build your income statement and custom detail tabs. Today, we’ll finish off the series by examining how to construct the final components necessary to complete your model, including a quick discussion of unit economics and how to best keep your model updated. Feel free to ping us on Twitter (@wclittle, @troyhenikoff) with any questions.
Download a Copy of the Example Model
To make following along this final article easier, download a free copy of our example financial model here. Remember, understanding the nuances of your own unique business is critical, so only use this (and any other model you find online) as a guide while you build your own model from scratch.
When it comes to investment structures, I hope that my 30+ years as an entrepreneur and VC has led to some wisdom about what works and what doesn’t because it certainly has led me to have strong opinions on the topic. People like to say that VCs are in the pattern recognition business. If that’s true, then today I’m seeing a troubling pattern developing around company valuations aided and abetted by the overuse of debt.Read More