4 Decisions Every Startup Should Make Before Launching

Owning and operating your own business is exhilarating. It’s a time to work as your own boss and create a successful path for yourself. Yet, starting a business is also quite daunting. While every business owner shouldn’t hold back in terms of goals or strategy, he or she should also take plenty of time to get a deep understanding of what having a business actually means. This includes all of the caveats, legal responsibilities and financial risks that come with it. Before launching your start-up, make these all-important decisions

When you have your own business, it’s tempting to simply write off everything and anything at tax time. Deciding ahead of time what to write off will eliminate any confusion from business owners and employees on what is a practical write-off, and in effect, reduce the chances of getting audited come April 15^th.

Travel, cell phone use, home office, rent and business supplies are all popular write-offs, but the important thing is to decide on a policy, and understand the regulations, up front. Preparing your taxes at the end of a new business’s first fiscal year is no joke and making the right preparations months in advance is crucial in helping owners avoid financial issues down the road.

How will you structure your business?

In the beginning stages, a decision about business structure has to be made. Ask yourself these important questions about how you’ll structure your start-up business:

Do you want to have a business partner?
How much liability do you want to have personally versus liability for your business?
Do you want yourself, and any partners, to have a lot of flexibility in the handling of the business?
How many tax liabilities do you want to be responsible for?

Depending on the answers to these questions, you might be looking at forming a Limited Liability Company, a Standard Corporation, a S-Corporation, a Professional Limited Liability Company, or something similar. Each option incurs different taxes and has its own caveats and structures. It is wise to consult professional help to see exactly which structure is right for your business.

Which banking option is for you?

In the time leading up to starting a business, it’s important to create a cushion for yourself. After all, many start-up businesses fail and it’s important to have a back-up plan or exit strategy should your business model go south. Start off by looking into the rates, yields, minimums and other options for different banking accounts. Setting up the right type of banking option can make help to alleviate some of the financial risks that come with launching a new business.

Each bank offers its own set of advantages for business owners. For example, those who choose to do online banking at Discover Bank can opt-in for various rewards and cash bonuses for making businesses expenses. By establishing a financial cushion and working with companies you trust is one of the most sure-fire ways to stay afloat in the awkward launch process.

Who will you employ?

After deciding on the industry of your business and going through the preliminary steps, it’s time to decide who you’ll hire and what those individuals will be doing. It’s a very delicate line when trying to hiring a proper amount of people to complete all tasks.

Hire too little and you risk exposing your team to over-extension leading to faster burnout and lower employee retention. Hire too many and you run the risk of confusion over responsibilities and a bloated payroll you can’t justify. The best course is to find qualified individuals for the job who you know you can trust. A few bad eggs can take down companies with even the most sound business models.

Even though launching a start-up isn’t the easiest of tasks, especially among the new information and rules that need to be learned and understood, decisions made ahead of time will make the process as simple as possible. Tasking yourself with making these important decisions from the beginning will help you draw a navigable path into the future.

About the author

DJ Miller is a graduate student at the University of Tampa. He is an avid gadget geek who spends most his time writing on anything tech related. In his spare time he likes to travel, play soccer, and watch movies. You can follow him on twitter @MillerHeWrote

10 Rules For A Great Startup Idea [infographic]

As entrepreneurs we’ve been hammered over the head with the idea, that ideas are worthless without execution and follow through. But how do we know if our ideas are even good enough to pursue.

If you’ve vetted your idea and you think it may be a great startup idea, but you don’t have a team, one of the best places that you can go to vet the idea and get started is a Startup Weekend event. So how do you get to that point?

Founder Institute Founder and CEO Adeo Ressi has a structured approach to analyzing ideas. He shares it at most of the Founder Institute events across the country. Well now the Founder Institute has made that wisdom available to everyone via this infographic checklist below.

Passion, simplicity, revenue, customer knowledge, market knowledge, market size, secret sauce, vetting and killing and sharing your idea are all part of this important approach. You can dive more into these ideas below.

10 Rules to a Great Startup Idea infographic

You can find out more about Founder Institute and their programs across the country at fi.co

Now check out 8 bits of awesomness outlining startup life.

Startups Here’s A Better Way To Ask For An Email Introduction

I ask for and receive a lot of requests for introductions. Whether it’s someone at a company looking for a partnership or job, an investor, a journalist, or someone else, it’s an integral part of pretty much any profession. At the same time, such requests often arise in the least efficient way possible for the middleman: in person, in the middle of another email exchange talking about the other party, or simply with no details at all.

Once I got involved in the startup scene with Fetchnotes, I found that the startup crowd has email introductions down to an exact science. I’m sure similar rules apply outside our bubble, but inside it there are a very specific set of expectations, and it was a bit cryptic and counterintuitive to pick up at first. But hopefully this helps you maximize the success of your introduction requests.

First of all, no matter where the request for an intro arises, always send a separate request email. That way, the receiving party can act on it directly (since most intros are over email). You’re asking someone to spend their social capital on you, so your number one goal is make it as easy as possible. Here’s how:

—

Hey Alex,

Hope all is well! I saw you’re connected to Mark Zuckerberg (contact) on LinkedIn. I was hoping to connect with him about a partnership (reason), the details of which are below. Do you know him well enough to make an intro (gives middle-man a way out in case they don’t know each other well)?

StartupWithFriends is an awesome new app that lets you start a company with your friends, right on Facebook (what you do). We have 150K+ active users, and on average they’re starting 1,000 companies per day (credibility + traction). We’ve been integrating with OpenGraph already (shows you’ve done work already, otherwise they often point you to their API page) but we think that we can make it a huge revenue driver for them if we get access to some of the data not available in their APIs, specifically the number of times a user looks at the profiles of their ex-girlfriends (basic benefits + needs outlined).

Let me know if you can make the connection. If not, no worries, I can reach out cold (shows them you have confidence that this is going to happen one way or another).

Thanks!
Networker McAwesome

—

When I receive an email like this, I forward it to my contact and ask, “Hey, these guys were looking to connect. Can I make an intro?” If he says yes, I make the connection. If not, I say I tried but he doesn’t want to talk. Unless you know someone really well (or know they are looking for such opportunities), you want to give them a chance to say no. Otherwise, they’ll feel obligated to take it and have bad feelings toward the person from Day 1. Not only is it just good etiquette to give them a choice, but it prevents the value of your introduction from being diluted too.

Is it contrived? Obviously. Does the other party realize its contrived? Usually. And yet I write every email intro request in this exact format because it does three really, really important things:

Makes it easy for the middleman to make the intro (just hit forward and type a sentence)
Gives the person you’re trying to get connected with a basic overview (so they feel more comfortable taking a meeting)
Limits the amount of aggregate back-and-forth.

That makes the intro more likely to happen, the person you’re trying to meet more likely to take the meeting, and most of all, makes the most efficient use of everyone’s time.

Happy connecting!

This post originally appeared on the author’s blog.

Alex Schiff is the founder and chief executive officer of Fetchnotes, which makes productivity as simple as a tweet. Prior to Fetchnotes, Alex was the vice president of Benzinga and a student at the University of Michigan’s Ross School of Business.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Check out our interview with FetchNotes here at nibletz.com The Voice Of Startups Everywhere Else

5 Steps For Calculating Your Startups Costs

You can’t create a realistic business plan without knowing how much it will cost to get your business up and running. If you don’t have an idea of your startup costs, you won’t know how long you’ll have to bootstrap, how much funding you’ll need, how quickly to scale. In other words, without calculating your startup costs, you don’t really know where you’re going — or how you’re going to get there. And your company could fail before you even hit the break-even point.

Some entrepreneurs believe that calculating their costs is all about listing and tallying their cash outlays. This is an essential step, of course, but calculating startup costs is much more than a simple exercise in addition. Equally important is to set some milestones and build your financial plan around hitting these goals.

Here’s how:

#1: Identify your milestones.

To determine the major milestones for your company, you need to assess where you are and where you want to be. You can’t begin to identify your costs until you know what you want to accomplish. What are the important milestones for your company to achieve? Some possible milestones could be to get out a beta product, get a first product, or to gain a solid understand your market. Try to create discrete milestones rather than bundle them together.

#2: Determine what you need to do to accomplish your milestones.

Once you’ve identified your milestones, you need to think about the resources necessary to hit these milestones. Consider the following costs:

Human resources. This is often the greatest startup expense. Figure out who you will need to build your company, and then calculate their projected salaries and wages (depending on whether you hire employees or outsource). Remember to include recruiting, benefits, taxes, and other related HR costs.
Operational costs. These are the day-to-day costs of keeping your business running, including such things as your internet service and office supplies, and other inventory and equipment expenses.
Professional services. You’ll need to include costs for essential professional services, such as an accountant or attorney. Also consider what permits or licenses you may need.
Facilities. Determine, what, if anything, you will need in terms of facilities or office space.
Marketing. Your company won’t be very successful if nobody’s heard of it! Consider the cost of marketing materials, your Google AdWords campaign, or other marketing costs.

#3: Consider funding sources.

Next you need to determine if you are going to bootstrap the entity or if you want to/need to/can raise funds. To do this, calculate your burn rate (the amount of capital you will go through every month), using your total expense calculation. If you realize that you will need to raise money to cover your monthly costs, decide what potential funding source you’re going to target: friends and families, angel investors, or venture capitalists.

#4: Establish your funding goal.

There are pros and cons to each funding source, but there is no right source for all companies. It depends on your company niche, what stage your company is in, and what else you are looking for — and not looking for — in a funding partner. And, of course, it depends on how much money you need.

You may think more money is better, but this is actually a mistake. Use your expense calculations as a baseline for how much funding you will need. Add in a bit of a cushion, since it’s common for startups to underestimate their cost — but don’t add in too much. Raising what you need (and no more) is called capital efficiency– and it’s a much more telling indicator of your company’s success that your capital access.

#5: Balance your milestones against your funds.

Once you have determined what you need to hit your milestones, you need to go back and balance that against your funds. Balance your way between what you can do and what you can afford in order to reach each milestone. This isn’t a one-time process; you’ll find yourself constantly dancing between these two points.

Admittedly there will be surprises as you launch and grow – that’s why you don’t want to start with a five-year financial plan; it’s just not possible to accurately project that far out. Instead, you just want to calculate your initial costs and create a budget, and update that budget, on a quarterly basis. If you can start with a reasonable estimate of your projected costs, you’ll be better prepared to write your business plan — and positioned to build a successful company.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

Hiring A Web Developer? 4 Interpersonal Skills To Look For

The Internet and smartphones help us to bring our ideas to life more easily and cheaply than ever before. But before you can get your big idea out in front of the masses, you need that idea to transform from a sketch in your notebook into a working website or mobile app.

Which, in most cases, means you need a great Web or mobile developer.

However, if you’ve never looked for a quality Web or mobile developer before, the task can feel extremely daunting. Many people waste a lot of time and money running through multiple developers before they find the perfect one. Why? It’s often because you aren’t on the same page as the developer with regards to what you want, how much it’s going to cost, and how long it’s going to take.

Nevermind technical skills (those are easy enough to verify) — if you’re working on a high-tech project, interpersonal skills are just as important. These 4 qualities will help ensure you find the partner you’re looking for — the one who can bring your idea to life without wasting any of your time or money:

1. Trustworthiness.

A great Web or mobile developer isn’t just another contractor you hire to get some work done. Ideally, they become your partner. They bring skills and tools to the table that breathe life into your idea and turn your grand vision into a distinct reality. If your gut says you don’t trust them, you’re never going to feel comfortable working with them.

Without trust, chances are you and your developer will never be on the same page with anything. In the back of your mind, you’ll always be second guessing the developer’s decisions and motivations. Moving forward will become increasingly difficult as the process slows down because of the lack of trust in the partnership.

2. Passion for their work.

Someone who has a deep passion for their work is often palpably excited and positive about that work. This excitement spills over into their interactions with you.

If your developer isn’t excited to be working with you, that sentiment is going to show in their communication and demeanor — walk away!

3. Previous (positive) experience working with clients.

Some developers create incredible, high-quality work and are amazing at what they do, but they’re simply not that good at working with clients. They’re not “people” people. If your developer doesn’t have previous experience working with clients, that’s going to be a problem.

Previous experience working with clients means your developer will have an existing process and workflow in place, which creates a much smoother experience for you. They’ll be able to help prevent common problems that could arise during your project, saving you time and money.

If you’re not sure about your developer’s capacity to deliver in this respect, ask for references.

4. Excellent communication skills.

Given our increasing reliance on email as a primary form of communication, it’s easy to misinterpret what somebody is saying or how they are feeling. If your developer isn’t very good at communicating in this way, you’re likely to lose track of what’s going on with the project.

A developer who is also an excellent communicator will ensure you always have a clear overall view of the project. They’ll explain everything in layman’s terms and not drown you in confusing technical jargon. It’s part of the developer’s job to make you feel more comfortable overall about your project.

Tim Jahn is the co-founder of matchist, a curated service for freelance developers to connect with quality clients and projects. He’s also the co-founder of Entrepreneurs Unpluggd, an events and media company that helps entrepreneurs move their businesses forward. As an active member of the Chicago tech community, Tim has made his mark interviewing hundreds of entrepreneurs from all over the world.

3 Key Questions To Ask Before Hiring For Your Startup

One of the hardest but most exciting things about being a young entrepreneur, first-time business owner or even a startup manager is the hiring process. But there are a few things you have to think about before green-lighting a new startup employee, especially in the earliest stages of starting up.

Here are 3 questions to guide you:

1. Do you really NEED another employee?

When you’re first starting out, you’re hiring someone for one of two reasons: (1) because you have pushed your own limits of how much you can work in a day (aka you’re going insane by working so much), or (2), the person you’re hiring has a skill that you simply don’t have and the time spent learning that skill would not be worth it for your business.

Think of yourself — how many hours you put in, how much work you do to spur your business or the business you’re working for. Now duplicate yourself. Is there actually enough work to be done that there could be a clone of you working simultaneously and not be bored or off-task throughout the day?

And if you simply don’t have a skill needed, rethink that aspect of your business. Is there anyone else already on the team that has that particular skill? Is that task that you think needs to get done absolutely core to your business? If yes, then hire. If not, then hold off until it’s absolutely necessary.

2. How do you hire? Immediately, or a trial period?

Companies bring new hires onto the team in different ways. Some startups tend to hire people like developers on a Friday as salaried employees, and ask them to be at work on Monday — mostly because their skill set is definite and because their job takes place in a space that needs to be confined. (We can’t have our engineers working from Starbucks while writing all of our code to improve security on our site.)

Hiring business teams works a little bit differently. Many of these jobs rely on longer-term objectives and relationships that take time to build, combined with some sort of measurable ROI. At MySocialCloud, we help our employees transition from previous activities (working at another company, going to school, unemployment) to working on our team with a two-week “trial period.”

We give them a couple of tasks and some actionable items for the two weeks. They can choose how and when they go about accomplishing the tasks by the set date. After the two weeks, we go through an evaluation process: Did they complete the actionable tasks? How well were they completed? Did they go above and beyond? Did they, as ambitious people who know it takes more effort to work at a startup, take the initiative to add their own tasks to that list to help spur the business?

If all of these tasks are completed at a level that exceeds your expectation, it’s time to hire!

Pro tip: Interview A LOT of people. Look at a lot of different candidates. At the very least, it gives you a perspective of who NOT to hire, which helps you hone in on the qualities and skills of a person who truly fits on your team.

3. Do you offer equity and if so, when/how much?

When it comes to equity in a new company, there are two main pitfalls to avoid.

One is the overly generous mentality. There are some first-time founders who hand out equity for their startup like nobody’s business. They give equity to every new employee, and anyone who has helped them with advice or getting a meeting with an important person. DON’T do this! Equity at a startup is worth next to nothing, and the only way it becomes something is if you make it something. Only give it to people who really contribute (e.g. another co-founder, a technical lead on your team, etc.). And don’t forget to make it vesting.

The flip side is the “hoarding” mentality. These are the founders who know for a fact that their business is worth bazillions of dollars and they want to have it all. DON’T be this person, either. As mentioned above, startup equity means nothing unless your team makes it worth something — you can’t build a business by yourself.

You do need some people on your team to have equity (maybe not all of them, but definitely some of them). At the very least, it motivates them to work harder knowing they have a large potential payout once you reach your goals.

Stacey Ferreira co-founded MySocialCloud, a technology startup that allows people to store their usernames and passwords for all their online websites for auto-login and share websites with friends easily, during her senior year of high school with her brother, Scott. When she was just 18, she raised a seed round of funding of just under $1 million from Sir Richard Branson and Jerry Murdock.

Check out the hiring for your rockstar panel at everywhereelse.co The Startup Conference, EE14, Early Bird tickets and booths still available.

Top 5 Reasons Startup Founders Blow Through Money

There’s a lot of reasons why companies don’t make it, and sometimes it’s not that the idea or product isn’t good — it’s just that you run out of money. Even though we know that blowing through money is a “bad” thing, I’ve been talking a lot with founders and investors about what “bad” means. What have they noticed as common themes when they sit down with founders that exhausted their money too quickly at the seed stage? So here are the top 5 reasons startup founders blow through money.

Let me know your thoughts and if this aligns with what you’ve personally seen. What have you regretted spending money on, or what do you roll your eyes at as an investor?

1. “I have a business meeting in Thailand!”

We all know these founders. They travel somewhere new every week. Their meetings take them around the world–frequently. They are always tired and busy from travelling, and they make sure to check-in at every luxurious hotel they stay at.

Why this fails: The desire to pre-maturely live a life of luxury through funding raised for business development extends to other poor choices. It goes — fast.

Understanding this entrepreneur: Typically extroverted and commands control of the room. Works efficiently on little sleep and cares a lot about appearances.

Can benefit by: Making sure that meetings are efficiently scheduled. One entrepreneur told me they combat this by making a “day trip” rule. If the meeting is important enough to fly for the day and return, it’s a go. It helped this entrepreneur cut down on meetings that could be conducted via phone without sacrificing quality.

2. “That’s way too expensive!”

This is another extreme–founders that don’t want to spend anything and opt for cheap solutions…cheap everything. This sends bad signals to clients and investors and often costs the entrepreneur more in the form of lost opportunities.

Why this fails: Some founders are very conservative. They need money in the bank–a cushion. They are risk takers with anxiety and they want to ensure that they get the results that they need for the next raise.

Understanding this entrepreneur: Typically introverted and mathematical. Usually overly conservative in their predictions.

Can benefit by: Giving up some control and working with investors and advisors to create healthy budgets.

3. “It’s a marketing spend!”

We all enjoy celebrating successes of startups for special launches or funding announcements. Sometimes startups plan evenings with open bars and chalk it up to a good use of marketing dollars. Chances are this isn’t the best use. Same can be said for overly-spending on trade shows, fancy promotional videos, or sponsoring an event before the time is right.

Why this fails: Marketing is extremely important, but many startups will exhaust their “marketing spend” without focusing on basic things first — like establishing a healthy blog presence, or discovering ways to become “experts” in a topic by speaking at conferences. If you’re spending money on marketing and you don’t have a blog, you’re doing it backwards.

Understanding this entrepreneur: Typically extroverted and creative and full of ideas. Too focused on big picture instead of steps to get there.

Can benefit by: Forcing themselves to write plans about their spends. Marketing is about ROI, so if you are planning on spending money you need to know what a worthwhile conversion will be for you. Are you looking for customers, users, app downloads? What result will make you happy?

4. “We’re going to hire salespeople!”

A great mentor told me that you only need one salesperson. She didn’t mean literally one – but she meant that you, as a founder, need to be able to sell your product yourself before trying to hire others to sell it for with/for you. Managing a sales team without getting your hands dirty in the sales process only makes you disconnected from your product, and will frustrate future early sales employees.

Why this fails: As a founder you are the product, don’t expect to hire and watch the numbers soar. Your product won’t sell itself unless you sell it first. It doesn’t matter how many sales people you hire if you don’t have the sales process down in the first place.

Understanding this entrepreneur: Typically they don’t have a background in sales and think that hiring sales employees will magically make numbers appear on a sales board. Typically technical, sometimes egotistical.

Can benefit by: Selling the product. That’s all there is here. If the founder is technical and won’t be doing sales, someone on the founding team must be a hustler. Founders are either selling or building. Choose one and do it well.

5. “I’ll never work for anyone, ever!”

This entrepreneur is right out of college. They don’t want to get a job, or can’t last at a job for more than a few months. They have great ideas and plans and want to change the world, but need some reality first. These founders just spend money in all the wrong places for all the wrong reasons, which could be anything from 1-4 mentioned above. Great mentors seem to make or break these types of entrepreneurs.

Why this fails: If you haven’t had a job before you may lack judgement of certain realities and what it really requires to start a business.

Understanding this entrepreneur: Typically driven, these founders need to get broken in a bit before reaching the point of being able to successfully manage others.

Can benefit by: Getting a job and showing that you can work well with others and under the management of others. The goal is to show that you are able to learn and adapt.

Sarah Ware is the co-founder and CEO of Markerly, next generation publisher tools. Markerly is a recent graduate of 500 Startups. Nibletz has used Markerly’s publisher tools since their launch last year. Right click on anything on the site and see the magic happen.

Last year Sarah appeared on Bad Ass Female Founders From Everywhere Else and the “I Survived An Accelerator Panel” hosted by GAN’s Pat Riley,at everywhereelse.co The Startup Conference! Find out more about the next everywhereelse.co here.

3 Key Startup Jobs To Outsource

(image: leasingnews.org)

If you’re running an early-stage startup, chances are there are some knowledge gaps in your core team. You may be strong on the technical side or a product whiz, but what about financial strategy, administration, HR? Are you prepared to manage the day-to-day of your startup, from recruiting new talent to bookkeeping to financial planning?

If you have a knowledge gap within the ecosystem of your organization, you need to fill it. But your in-house startup team needs to focus on developing your products and service, creating partnerships, and earning revenue. Your internal resources should be focused on your core competencies, not on these side tasks.

So, what should you do? Outsource — to professional consultants or groups.

The best plan is to outsource whatever services you can so as to save on the highest business costs of all — staffing costs — while getting the support you need and the assurance that these functions are being taken care of by professionals.

Specifically, you can outsource the following 3 functions:

1. CFO: If your company has closed a seed round of funding or is earning more than $250K per year, you need a CFO to handle your financial strategy and run your accounting team. Even if you’re not yet funded or earning significant revenue, you may still be in need of CFO services. For example, if you’re in high-growth mode or have a lot of activity or expenses, you definitely need a financial professional to oversee your financials.

Depending on your needs, a consulting CFO may be able to help with financial projections, cash forecasts, operating budgets, financial plans, pricing, reporting, debt management, M&A, equity and debt negotiations and liquidations. Overall, CFOs help you with business planning, providing your business plan with essential rigor. Your business is creating a product or service; finance is not your business. Look for a professional CFO who has experience working with startups.

2. Accountant: If your financial status doesn’t warrant hiring a CFO, you still need financial support; at the very least, you’ll need help with your day-to-day accounting and regulatory compliance. This could mean tracking down the best US or Canadian accounting software deals. On the other hand, outsourcing your bookkeeping to the right firm will give you the support you need for cash management, AP/AR, financial close and taxes.

You can also hire a consulting group to provide accounting support on a project basis. So, whether you need help with audit preparation or generally accepted accounting principles (GAAP), your accounting partner can give your accounting issues the attention they need — so you can focus on other things.

3. Human Resources: Any entrepreneur can attest to the fact that HR can be a total time suck. From recruiting to managing personnel issues, from compensation to benefits, from payroll to employee policies and procedures, human resources management can take over your entire schedule. And HR costs include much more than wages — all HR functions, while non-revenue driving, have an associated cost. Outsourcing your HR functions is definitely a cost as well, but when you calculate it out per employee (and figure on the invaluable savings of staying in compliance) it becomes clear that this is a necessary business cost.

While your company is in its early stages, it’s essential to get support, but only as you need it. To outsource doesn’t mean you just hand over a function and forget about it. You’ll still want to be apprised of all aspects of your startup; hiring the right consulting groups will insure that you stay informed.

Remember, you don’t outsource to make a service disappear; you outsource to reduce your cost structure and keep your internal resources focused on your business. When you outsource necessary functions on an as-needed basis, you can concentrate your internal team efforts where they are most needed: growth. And the companies you hire will help you stay on track as your company grows to the next level.

Need a cofounder, why not try CoFoundersLab.

The Anatomy Of A Winning Pitch Deck

(image: onstartups.com)

It’s accelerator graduation season for Spring 2013 accelerator classes. That means it’s a good time to talk about pitch decks. Our good friends at investorpitches.com have put together “The Anatomy Of A Winning Pitch Deck” in a great, easy to follow infographic.

There seems to be a lot of different ways to build a pitch deck. We’ve seen over 25 accelerator demo days in the last year and for the most part each accelerator has a different way of teaching startup teams how to build the pitch deck. For the most part, what you’ll notice is that all of the startup teams at each accelerator follow the same model, but each accelerators model is different.

investorpitches.com has assembled their best practices for building pitch decks that work for investors. Of course they warn “include all the pieces you need, and none that you don’t”.

The biggest part of the pitch deck is to make sure you combine story telling and selling to connect the mind and the heart. No one wants to see any founder stand up on stage and just read a bunch of slides. Most people in the audience are capable of reading the slides themselves. What the person pitching needs to do is narrate the slides and we’ve them together.

In working with some of the teams in the Seed Hatchery accelerator this week, it brought me to one of my biggest tips when helping people prepare for the actual investor day pitch. “The confidence monitor can help you or kill you”. The confidence monitor is a great thing for getting your place in your pitch and reminding you what’s on the screen. But you can very quickly turn that into just reading the monitor and forget the story telling.

Chances are you wrote your pitch out, printed it out, practiced it with the print out, and then for the last week or two you’ve been practicing without the printout. Nothing changes on stage. Don’t let the confidence monitor kill your confidence.

The other big thing to remember in all of this is that investors aren’t there to evaluate your ability to put together a Keynote or Power Point presentation. They are there to evaluate your startup, it’s traction, it’s success and it’s potential. Above all, don’t forget to build a product.

Check out the infographic below for what should go into your pitch deck.

Our friends at Populr have assembled some of the best pitch decks in the world.

How Startups Can Identify Their Core Values

While walking a potential investor through my first company’s office, he suddenly stopped to take a few deep breaths. I thought something was wrong until he told me, “I’ve never felt such powerful energy!” As a 21-year-old entrepreneur, I had taken our company culture for granted until that moment.

In the course of building my first and second companies, I learned firsthand that a startup’s culture is built on its founders’ true values. With this in mind, I set out to discover and define my own values as I was finishing up my second year at Stanford Business School and getting ready to start Fig, my third company.

But how do founders identify their personal values? While I cannot provide a universal recipe, I can share three questions that helped me determine my core values, and some of the ways my current team aims to align our culture with our shared values:

When have you felt most alive? Building my first startup during my undergraduate years was a deeply fulfilling life experience. I pinpointed what made the experience so rich by asking “Why?” many times over. Our team, a group of 20-somethings, was on an adventure of self-actualization. Every day, we pushed one another to grow — not just because we wanted to see the startup succeed, but also because we longed to see each team member fulfill his or her potential, professionally and personally. Once I uncovered the root of my fulfillment, I was able to articulate my passion for the value of “Becoming and Achieving” — whether it means developing product design skills to create richer customer experiences or improving my listening skills to strengthen my marriage. At Fig, we reimburse team members when they invest in their own growth and share their learning with the rest of the team.
What behaviors stir up intensely negative reactions in you? During grad school, I examined the wide range of emotions I experienced while listening to speakers and interacting with my classmates. The vast majority of the time, I felt inspired and challenged. There were a few experiences, however, that got under my skin. When speakers or classmates demonstrated airs of arrogance or coldness, I felt frustrated. As I questioned why I had these feelings, I discerned the root of my discomfort: these airs created distance between the members of a community that was usually open and supportive. Meditating on my discomfort helped me understand just how much I value another value, “Cultivating Authentic Community.” To help us connect at at a deeper level, our current team holds weekly emotional check-ins, and alternating bi-weekly team workouts and book discussions.
Are there narratives you hold sacred or value systems you can borrow from? The Torah and The Prince are two texts I found helpful in discovering my values. The Torah speaks to human dignity in conveying that all people are created in the image of their creator. By contrast, The Prince encourages leaders to pursue power by any means necessary. Distinguishing between the perspectives I cherish and those I eschew helped me understand my commitment to a third value, “Affirm Human Worth.” We embrace this at Fig by striving to honor people’s time and avoid instrumental behavior.

While all our values will drive our behavior as leaders, don’t assume all of your personal values should become part of your startup. One of your chief roles as a startup leader is to prioritize and communicate what is most important. Startup coach Dave Kashen encourages founders to “select startup values that enable team members to flourish and the company to win in the marketplace.”

Finally, give yourself and your team members grace for the moments you fall short of the ideals you hold most dear. I miss the mark more often than I would like to admit. Perfect adherence isn’t necessary to create a life-giving and high-performance culture. Your startup culture is strengthened every time team members discuss and help one another better lean into your shared aspirations.

Kevon Saber is the CEO of Fig, a mobile startup focused on personal well-being. Prior to Fig, Kevon was VP of Sales & Marketing at GenPlay Games, a mobile games developer he co-founded which has created fifteen games and $40+ million in consumer revenue. Kevon holds a BS in Finance from Santa Clara University and a MBA from the Stanford Graduate School of Business. Kevon and his family live in the San Francisco Bay Area.

Now check out 1o must read startup tips for young brands.

Navigating Through Startupland [INFOGRPAHIC]

As entrepreneurship continues to grow at a rapid pace, navigating through this startup land of ours can be a little tricky.

Startup Weekend, hackathons, Founders Instititue, accelerators, incubators, funding, pre-seed, post-seed, valuation, pivot and all those other terms we use each and everyday, are enough to get some entrepreneurs and founders extremely confused. Believe it or not, there are entrepreneurs out there that have an idea and just want to get it to market.

Once they spend a day, a week, or a month talking to other entrepreneurs and startup community leaders, they typically have even more questions.

One thing I’m asked a lot are “What are some startup resources for me?”. If I have the time I go over a lot of the resources in the infographic above. The same goes for our good friend Shahab Kaviani, the founder of CoFounders Lab (which we featured on Monday). That’s why CoFounders Lab has created the “Startup Land” infographic.

We’ve known for a while that CoFounders lab is more than just founder dating. Kaviani and his team have created a full online community of entrepreneurs, leaders and feeders. From that experience, and through exiting out of a previous startup, Kaviani was able to come up with this Startup Land infographic which we think you’ll find extremely useful.

You can check out all CoFounders Lab has to offer here.

Click here to download the full sized infographic.

New to startups? Check out these startup tips.

My Favorite Startup Wisdom Came From Critics

My mentors are not the bite-sized platitude types. And no entrepreneur I know ever actually listened to advice — otherwise, we would all be IP lawyers like our parents wanted us to be.

Sure, we nod in agreement with the advice we get, but only because the advice we get is pretty benign to begin with: hire people who complement your weaknesses, fall in love with the problem you are solving and not the product, get in touch with your customer’s feelings, add cheerful touches of color to your office, etc. I can feel you nodding.

Truly “good” advice, on the other hand, burns like dirt in an open wound. The scar tissue that forms is the armor you need to survive the entrepreneurship battle. What kind of advice is that? It’s what you remember verbatim after all the compliments are forgotten: the criticism.

Listed below, then, are my absolute favorite pieces of “advice” — and how each shaped my career to date:

1. “You know you aren’t good enough, right?” In the Lifetime movie of my life, I have a snappy reply, like, “Move over old man, ‘cause ladies are doin’ it for themselves!” In real life, I was stunned into submission as the advice-giver planted a big wet kiss on my cheek and whispered something about me reminding him of his daughter. Yuck!

But here’s what’s even more shocking: I agree with this criticism. I am not good enough to do a startup on my own. I am not a truly gifted and creative physics savant, but my co-founder and CTO, Robert Kester, is! I am also the type of person who would forget to pay quarterly payroll taxes. Luckily, the lovely Kayla Porche, our Accounts Manager, would never allow any such nonsense, and so our ship runs very smoothly.

I am not good enough in more ways than I can count, but I am very good in the few things that a CEO needs to be good at: I have excellent taste in people and technologies, I have a vision the whole company believes in, I can sell ice to Eskimos, and I am arrogant enough to ignore old dinosaurs who think they are doing me a favor.

2. “You won’t make any money.” Keep this between us friends, but I would totally do this job for free. Today I can earnestly say that my colleagues and I made the world a better place. And we do, in fact, make quite a bit of money — go figure!

On day one, you and your co-founders need to decide exactly when you want to cash in your chips and exit the company. The path you choose needs to fit your personality type as well as the true potential of your company.

Do you want to sell the company in two years for mega-bucks? OK, then you should probably follow the traditional VC route that looks to sell fast and inflated (think force-fed duck for foie gras). Generally, the company will need to have a massive market size and be easily scalable. This rules out most companies.

If you are a young founder, there is a very high chance that you will be pushed aside. Are you OK with that? When you spend your money, will it bring you joy?

Do not forget the joy multiple when considering how much money you want to make. When I go buy a new car, I get the happiness from the car and the extra joy from remembering how I came to afford that car. Unfortunately, I meet too many depressed founders who seem a bit lost. If the money does not bring you long-lasting pride and joy, then it was all for naught.

3. “You’re a b—h.” I was 12 years old when someone close to me first called me the b-word. I am all grown up now, and my response is, “Yes, but I’m a glorious b—h.”

I don’t get this said to my face so much anymore, but I still get that look. If you are confused about what this look is, try an experiment: Disagree with a 40-something-year-old VC about one of their recent investments.

Yes, ladies, being a young female entrepreneur is going to be much less fun for you than your male counterparts. The boys get more dates and the girls get thinly veiled hostility. You will not be liked for your success. But you’re not doing this to be liked, are you? (See: Sheryl Sandberg’s 2010 TED talk.)

Ignore the people trying to bring you down a peg. And do not, not, not give up and become an attorney/consultant/doctor. I am sick of being the only young woman on the entrepreneurship panel. Please join me!

Finding the starting line will be the hardest part. It may take years to form the right company, but you will be successful because you, my friend, are a glorious b—h.

Allison Lami Sawyer is the CEO and co-founder of Rebellion Photonics.

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Got Klout? Now You Can Get Into The American Airlines First Class Lounge

The “new” American Airlines has been doing a lot these days to come out of an airlines typical “business traveler” comfort zone. They are the only domestic airline that’s supporting startups at the ground level. Through a variety of partnerships and a nationwide team devoted to small business, and specifically startups, American Airlines is promoting their BusinessExtrAA program to the business leaders of tomorrow.

Their efforts to help startups don’t just end with an extra layer of rewards, the American Airlines team that’s working with startups is routinely found at startup events, job fairs and even hackathons. At these events they’re telling people about American’s programs but also mentoring and providing sound business advice to entrepreneurs both young and old.

Paul Swartz, who heads the airline’s small business and startup outreach in the north east, is routinely found taking office hours at events. We saw him spend countless hours talking with startup founders and entrepreneurs at CES 2013, and at SXSWi. One founder at SXSW told us that during his office hours consultation they talked about marketing, and brand loyalty.

Now American Airlines has decided to beef up their social outreach. Sure they’ve had a Twitter account that tweets out business tips, blog posts and customer service tips, but now American Airlines wants to reach influencers.

Through a unique partnership with Klout, American Airlines is now offering 1 day access passes to their first class Admiral’s Club lounge for those with high Klout scores. The best part is, you can get the benefit and hang out in the lounge, even if you fly on a different airline that day (we’re not sure why you would want to).

From experience the Admiral’s club lounge typically has great wifi, comfortable workspace, workstations with printers and desk tops, a variety of snacks, soda, beer and wine and it’s all free. Many of the Admiral’s club lounges have favorable views of the tarmac, gates and runways and they make for a great escape while waiting on a layover. In some of the bigger airports, the Admiral’s lounge offers private call areas and lounge furniture so you can catch a quick nap.

There is no restriction on the Klout perk for more information you can visit klout.com and for info on American Airline’s BusinessExtrAA program click here.

We flew American to NY for TechCrunch Disrupt NY 2013, Here are over 30 startup stories from Disrupt.

11 Tools To Simplify Your Startups Accounting

Stay on Track With Indinero

“The most important financial metric for most startups is monthly cash flow. Indinero lets us easily see how much we’re spending each month by category so we can budget for the coming months.”

– Bhavin Parikh | CEO, Magoosh Test Prep

QuickBooks Eases Things

“Almost all small business accountants in the United States are familiar with QuickBooks. Thus, I recommend any QuickBooks product (although I like Online Edition the best) because it makes it easy for your to clean up books and collaborate with your accountant for tax time.”

– Eric Bahn | Founder, Beat The GMAT

Outright Shows Everything

“I’ve got Outright set up to push notifications to my phone: every time I receive a payment, my phone goes ‘cha-ching!’ It’s a good noise to hear. On top of that feature, Outright can automatically pull in data from accounts and other apps, while putting everything together in a format that makes my CPA very happy. (Disclaimer: I write for the Outright blog, as well as using the app religiously.)”

– Thursday Bram | Consultant, Hyper Modern Consulting

Go With Google Docs

“Google Docs is a great tool to manage business finances. It’s very powerful and simple to use which makes it a breeze to use.”

– Ben Lang | Founder, EpicLaunch

Pay Up With Square

“Square is a great payment processing mobile app that makes accepting credit cards a snap and moves money quickly into my bank account.”

– Benjamin Leis | Founder, Sweat EquiTees

Microsoft Excel Is Still Relevant!

“It is the industry standard for spreadsheets for a reason. With a little training, you can run circles around any closed source software.”

– Peter Minton | Founder & President, Minton Law Group, P.C.

I Owe It All to Freshbooks

“I’ve never been very good with money. In fact, at one point, I appeared on CNN as the poster child for those with shopping problems. But Freshbooks helps me keep it all together on the business side. I use it to track my time and my business expenses, send invoices (and followups), send out and receive estimates, and generate tax reports. And despite my history with money, it’s all a breeze.”

– Steph Auteri | career coach, writer, and editor, Word Nerd Pro

Wave Accounting Saves Time

“Wave Accounting is completely free and connects directly to your bank account. It automatically keeps track of all your spending for you. It’s a great product and a huge timesaver.”

– Josh Weiss | Founder and President, Bluegala

Sync With Mint.com

“Although most people use Mint.com to monitor their personal finances, many business owners don’t take advantage of doing the same thing with their business accounts. Not surprisingly, Mint’s software works similarly with business bank accounts and credit cards, which makes it very valuable to manage budgets and overall spending.”

– Logan Lenz | Founder / President, Endagon

Stick With Shoeboxed

“I used to dread tax time, because my receipts were always a mess, and often nonexistent. Shoeboxed makes it incredibly easy to keep track of all of my receipts, and then import all of the data to sites like Outright, Mint, etc.”

– Sean Ogle | Founder, Location 180, LLC

There Are Still ‘Human’ Applications…

“I have this awesome human application called a Director of Operations. She handles all the accounting, financing, taxation, and regulation. It’s like magic. I’d highly recommend getting one. They can read between the lines on all those long-winded documents and keep you from wandering into trouble.”

– Brent Beshore | Owner/CEO, AdVentures

Now check out 10 Tools That Simplify Startup Collaboration