The Four Key Steps in Startup Fund Raising Processes


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Raising capital from venture capitalists at any stage can seem like a very strange, ambiguous and amorphous process. I’ve written about the way Redpoint diligences/researches a startup and its market and what questions we tend to ask at each stage. In this post, I’ll focus on the process from entrepreneur’s point of view. When raising capital, entrepreneurs will see potential investors move through four phases of investment decision-making process: screening, socialization, diligence, and decision.

The Four Key Steps in Startup Fund Raising Processes


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Raising capital from venture capitalists at any stage can seem like a very strange, ambiguous and amorphous process. I’ve written about the way Redpoint diligences/researches a startup and its market and what questions we tend to ask at each stage. In this post, I’ll focus on the process from entrepreneur’s point of view. When raising capital, entrepreneurs will see potential investors move through four phases of investment decision-making process: screening, socialization, diligence, and decision. I’ve drawn a schematic that illustrates this evolution above. The chart also shows a line indicating the progression from one step to the next, using data from my own investment funnels. Screening: the first call and/or first meeting. The screening step can include associates, principals and/or one or two partners. In this phase, investors are evaluating the risks of the investment, the market size, and the industry, to determine if it’s a fit with Continue reading "The Four Key Steps in Startup Fund Raising Processes"

The Things You Do Often Create the Things You Believe


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




The process of creating the right culture in a startup has always been mysterious to me. Each company’s culture evolves in its own way. I’ve wondered whether the culture is set by the personalities of the founders, or prominently displayed value statements and mission, or biases purposely imposed in the hiring processes like Google’s googliness filter. Or is understanding the psychological forces at play among employees the most important element?

The Things You Do Often Create the Things You Believe


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




The process of creating the right culture in a startup has always been mysterious to me. Each company’s culture evolves in its own way. I’ve wondered whether the culture is set by the personalities of the founders, or prominently displayed value statements and mission, or biases purposely imposed in the hiring processes like Google’s googliness filter. Or is understanding the psychological forces at play among employees the most important element? Maria Popova, the editor of Brain Pickings, recently wrote about one of these psychological forces called the Ben Franklin effect. She extracted this concept from a book on common self-delusions called You Are Now Less Dumb. In the post, which is very much worth reading, she writes we seem to believe that “we do nice things to people we like and bad things to those we dislike.” But the Franklin Effect rejects that idea. Our actions mold our beliefs, Continue reading "The Things You Do Often Create the Things You Believe"

Evaluating a SaaS Subscription Billing Service


This post is by Subraya Mallya from PrudentCloud


Click here to view on the original site: Original Post




With increasing number of software solutions moving to SaaS, the way to charge, collect the fee for the service Subscription Billingis also changing. License (lump-sum) fee is being replaced by (monthly/annual) subscription fee. If the architecture, data management, service uptime (SLAs) are not challenging enough, SaaS companies now also have to deal with subscription pricing, billing and tiered offerings which is not the core competency of most SaaS businesses. To meet this this challenge, a new category of software offering called Subscription Management (aptly also SaaS) which specialize in providing robust billing, pricing capabilities has emerged.

A  friend who runs a SaaS company, which is growing fast and has outgrown their in-house process/technology of managing subscriptions,  was beginning to evaluate a Billing Service. He asked me to help with characterization of what an ideal service should be capable of and baseline the needs that they need to assess. Thought it might be

Continue reading "Evaluating a SaaS Subscription Billing Service"

Which Acquirer Pays the Most for Startups?


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




A few days ago, Simply Business published an infographic and data on the acquisition patterns of Amazon, Apple, Facebook, Google and Yahoo. Looking at that data, I wondered which acquirers pay the most for startups. Ideally, this data provides some negotiating leverage to founders selling their businesses. I’ve prepared three charts and a table to tell the story. The first compares the average acquisition prices over the life of each of the tech monoliths.

Which Acquirer Pays the Most for Startups?


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




A few days ago, Simply Business published an infographic and data on the acquisition patterns of Amazon, Apple, Facebook, Google and Yahoo. Looking at that data, I wondered which acquirers pay the most for startups. Ideally, this data provides some negotiating leverage to founders selling their businesses. I’ve prepared three charts and a table to tell the story. The first compares the average acquisition prices over the life of each of the tech monoliths. The y-axis is in log scale. A value of 2 means $10M^2 or $100M. On the whole, the average acquisition prices are all in the same ball park. Facebook and Google have outliers, demarcated by dots, which are WhatsApp and DoubleClick, Nest, Motorola for Google. Next let’s look at M&A activity by company. Google is also by far the most acquisitive company, averaging 11 acquisitions per year since 1999. This is close to twice the pace
Continue reading "Which Acquirer Pays the Most for Startups?"

Why the WhatsApp Acquisition Changes Everything


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




From zero to $19B of business value in five years; WhatsApp’s sale to Facebook is an important moment in the history of the consumer web. The deal proves distribution, reach and large user bases aren’t the competitive moats they once were. Apple’s App Store and Google Play have leveled the playing field to such an extent that a startup can command 10% of the market cap from a $200B company.

Why the WhatsApp Acquisition Changes Everything


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




From zero to $19B of business value in five years; WhatsApp’s sale to Facebook is an important moment in the history of the consumer web. The deal proves distribution, reach and large user bases aren’t the competitive moats they once were. Apple’s App Store and Google Play have leveled the playing field to such an extent that a startup can command 10% of the market cap from a $200B company. To reach scale in the search-driven world of the web meant waiting 90 days to appear in the Google search rankings, maximizing inbound links, optimizing anchor text. In those web days, a startup couldn’t dream of appearing as the first search result on their launch day. It was an impossibility. But in mobile, this happens all the time. Startups launch and on their first day in the iTunes store, the app hits the top of the charts, # 1. This Continue reading "Why the WhatsApp Acquisition Changes Everything"

What to Look for When Hiring a Head of Marketing for Your Startup


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




When a startup is confronted with the prospect of hiring a head of marketing, founders heads often spin. What should be the day-to-day tasks for this person? What skill sets are important? Because of the seeming abstract nature of marketing, founders sometimes delay finding a head of marketing until they feel acute pain, at which point they can clearly identify the attributes of the right candidate. But underinvestment in marketing, like underinvestment in infrastructure or software or product, isn’t a good idea.