Startups: How to Communicate Traction to Investors - Posts SR BP - Research articles - Gamasutra - Features - Writing a Business Plan for Independent Game Ventures With the average cost for producing a computer game topping $2M per title (that's twice as much as it cost just two years ago on average), how does an independent producer get the money to create that killer game concept?(i) Production costs may be growing exponentially but so are gaming industry revenues. Unit sales of video game and computer entertainment are worth an estimated $5.3 billion in 1997.(ii) Sales are up almost 60% for the first quarter of 1997 over the same period last year thanks to strong Sega, Nintendo 64 and Playstation sales. The unfortunate reality is that even though the industry taps a huge consumer market, most independent gaming projects don't get past the concept phase because they can't get the money they need to start production. The only way to get your foot in the door with potential investors is to have a good gaming concept and a well-written business plan. Of all the types of ventures to finance, I've found gaming projects to be the most difficult.
Class 8 Notes Essay Peter Thiel’s CS183: Startup - Class 8 Notes Essay Here is an essay version of my class notes from Class 8 of CS183: Startup. Errors and omissions are mine. Bruce Gibney, partner at Founders Fund, gave the lecture these notes are based on. Credit for good stuff goes to him and Founders Fund. Class 8 Notes Essay—The Pitch I. One of the most important things to remember when thinking about pitching is that there are huge numbers of pitches in the world. Conceptually, pitching sounds easy. But it’s not that easy. Humans are massively cognitively biased in favor of near-term thinking. Before you pitch you should have a clear goal in mind. First, you need to raise the right amount of capital. Second, higher valuations aren’t always in your interest. Your subsidiary goal should be to keep control of your enterprise. II. It’s always important to understand your audience. One of the most important things to understand is that, like all people, VCs are different people at different times of day.
NDA’s and how they don’t work « Non-Disclosure Agreements (“NDA’s”) are appropriate for certain types of employees and strategic partners, not potential investors like Venture Capital. Why do you need an Non-Disclosure Agreement (“NDA”)? Or, perhaps, more importantly why won’t they work for you? The primary purpose of an NDA is to protect the disclosing company’s valuable trade secrets and ideas, arguably a company’s most valuable resource. A recent discussion with Jay Rein reminded me that people in transitional business bring different perspectives when it comes to certain business tools and methods. Jay is mentoring a duo of young genius entrepreneurs and the use of NDA’s around Venture Capital became a topic. Bob Twitchell, our Accelerator Resident Technologist, and the holder of fifty valid patents himself, will tell you: “Trade secrets are only protected under state law to the extent that the information remains not generally known (i.e., secret). All that said is a verbose overview for the sake of posterity.
Writing a Business Plan : Startup Ideas : Sequoia Capital : US Writing a Business Plan At Sequoia we like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed... read We like business plans that present a lot of information in as few words as possible. Company purpose Define the company/business in a single declarative sentence. ProblemDescribe the pain of the customer (or the customer’s customer). SolutionDemonstrate your company’s value proposition to make the customer’s life better. Why now Set-up the historical evolution of your category. Market sizeIdentify/profile the customer you cater to. Competition List competitors List competitive advantages Product Product line-up (form factor, functionality, features, architecture, intellectual property). Business modelRevenue model Pricing Average account size and/or lifetime value Sales & distribution model Customer/pipeline list TeamFounders & Management Board of Directors/Board of Advisors
Perfect Your Pitch If you want to secure venture capital, avoid these 8 mistakes. As a venture capitalist, I'm constantly on the receiving end of pitches from entrepreneurs looking for capital. While there are plenty of different mistakes you can make, these are the ones I see over and over. Not knowing your audience: I invest in early-stage software and internet companies in the U.S. I'm always amazed when someone reaches out to me to invest in a telecom company, a retail products company or a biotech firm. Do your research and make sure the venture capitalists you target invest in what your company does.Asking the venture capitalist to sign a nondisclosure agreement, or NDA: This is a stupid idea perpetuated by lawyers. Brad Feld has been an early-stage investor and entrepreneur for more than 20 years. Brad Feld is co-founder of Foundry Group, a Boulder, Colo., venture-capital firm specializing in early-stage information-technology companies, and TechStars, a startup accelerator. Like this article?
The 11 Risks VCs Evaluate Though the industry is called venture capital, the goal of a VC isn’t to maximize every risk. Instead, we try to understand all the risks a business might face and weigh those risks with the reward - the exit. Here are the major risks that I typically review when a startup pitches. Market timing risk - Is now the right time for the business? It’s often hard to evaluate this risk, but nevertheless, it’s an important consideration. Business model risk - Is there a clear business model? Market adoption risk - Are there strong competitive players in the market? Market size risk - If the company is successful, is the exit scenario large enough to provide the types of returns our fund needs? Execution risk - Does the team have the right skills and passion to reach their goals? Technology risk - Does the company have to develop a new technology that may not reach fruition, or may take much longer than expected? Platform risk - Is the startup building atop YouTube, Twitter or Facebook?
untitled VCs Invested $26.5B In 3,698 Companies In 2012, Total Dollars And Deal Volume Both Down A new Moneytree report is being released this evening, showing that annual VC investment dollars have declined for the first time in three years. The study, which was conducted by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), and based on data from Thomson Reuters, reports that there were $26.5 billion put into 3,698 VC deals in 2012, a decrease of 10 percent in dollars and a 6 percent decline in deals over the prior year. For the fourth quarter, venture investment of $6.4 billion into 968 companies fell 3 percent in dollars, but rose 5 percent in deal volume over Q3 2012. Most industries saw double-digit decreases in investment dollars, especially the Clean Technology and Life Sciences sectors. “General economic uncertainty continues to hinder capital investments, and venture capitalists are no different,” noted Tracy T. “As some expected, 2012 investment levels are less than what we saw in 2011.
The Best VC Meetings are Discussions not Sales This is part of my blog series “Pitching a VC.” I’ve sat through a lot of VC pitches and having been CEO of an enterprise software firm for many years I’ve also sat through many customer meetings with sales teams. There is one classic mistake that I see across both types of meetings – “the tell & sell” presentation. The presenter comes out of the meeting proud at having gotten through all 30 slides (and maybe even a demo) with a bunch of smiling faces and nodding heads and no discussion. In our internal sales training sessions I would always teach our young sales execs that this seemingly good meeting was probably not as good as they thought. The advice I gave to my sales execs is the same advice I would give to you: smiling, nodding heads are normally not a great sign. The VC might have tried a few times to prompt a discussion and you didn’t take the cue but instead reverted back to slides. UPDATE: My initial post talked more about a debate than a discussion. 1. 2. 3. 4. 5. Example: 6.
Fund Raising is a Means Not an End Not all that glitters is goldWilliam Shakespeare For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake. When you take money from investors their business model becomes yours. One of my ex students came out to the ranch to give me an update on his startup. Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. It all starts with understanding what a startup is. What’s a Startup? • Temporary Organization: The goal of a startup is not to remain a startup. • Search. • Repeatable: Startups may get orders that come from board members’ customer relationships or heroic, single-shot efforts of the CEO. • Scalable: The goal is not to get one customer but many – and to get those customers so each additional customer adds incremental revenue and profit. Who to take money from? There are two reasons to take venture money. Lessons Learned