Startup Funding Quotes

Hyping your product to get funding while concealing your true progress and hoping that reality will eventually catch up to the hype continues to be tolerated in the tech industry.

First, only invest in companies that have the potential to return the value of the entire fund.

An entrepreneur without funding is a musician without an instrument.

And that was a job at a doomed start-up funded by the endless well of rich people who can only dream the most boring dream a rich person can dream: being even more rich.

Research published in 2018 by Boston Consulting Group found that although on average female business owners receive less than half the level of investment their male counterparts get, they produce more than twice the revenue.9 For every dollar of funding, female-owned start-ups generate seventy-eight cents, compared to male-owned start-ups which generate thirty-one cents.

there's an entire sector of venture capital now devoted to funding start-ups as “talent farms” for Big Tech

If building a startup is a roller-coaster ride, then fund-raising is a roller coaster in the dark - you don't even know what's coming!

On February 4, 2014, Partner Fund purchased 5,655,294 Theranos shares at a price of $17 a share—$2 a share more than the Lucas Venture Group had paid just four months earlier. The investment brought in another $96 million to Theranos’s coffers and valued it at a stunning $9 billion. This meant that Elizabeth, who owned slightly more than half of the company, now had a net worth of almost $5 billion.

Rakesh used to say, ‘In a start-up, either you are close to the customer, or close to the product.

No one funds a mere idea, especially if you are looking at venture capital. Funding is made to something that has proven a small part of a business model or proven a business model on a small scale.

I did not want to be an ingrate, but I had trouble seeing why writing support emails for a venture-funded startup should offer more economic stability and reward than creative work or civic contributions.

Venture capitalists, with the exception of people like Don Valentine, would tell you that they'd rather fund a great team than a great idea. The reason is that if they have a bad idea, great teams can figure out a better one. Mediocre people even with a great idea can screw it up in its execution. Or if they have a bad idea, then they aren't going to be in a position to think about how to change it. They're just going to pursue it blindly.

You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future. For the startup world, this means you should not necessarily start your own company, even if you are extraordinarily talented. If anything, too many people are starting their own companies today. People who understand the power law will hesitate more than others when it comes to founding a new venture: they know how tremendously successful they could become by joining the very best company while it’s growing fast. The power law means that differences between companies will dwarf the differences in roles inside companies. You could have 100% of the equity if you fully fund your own venture, but if it fails you’ll have 100% of nothing. Owning just 0.01% of Google, by contrast, is incredibly valuable (more than $35 million as of this writing).

Thorp had tried to build a wall between North and South Dakota for some reason. He contracted the job to his son, and the whole thing turned out to be a money laundering scheme to fund disbanded Nicaraguan Contras who were launching a tech start-up in Ireland.

less than 1% of new businesses started each year in the U.S. receive venture funding, and total VC investment accounts for less than 0.2% of GDP. But the results of those investments disproportionately propel the entire economy. Venture-backed companies create 11% of all private sector jobs. They generate annual revenues equivalent to an astounding 21% of GDP. Indeed, the dozen largest tech companies were all venture-backed. Together those 12 companies are worth more than $2 trillion, more than all other tech companies combined.

to begin funding in 2024, India’s National Quantum Mission has allocated a substantial Rs 6000 crores over the next eight years. While this is a significant investment for India, it is the first notable investment into quantum technology in India. In contrast to other nations, India has seen notably much much lower industry investment and investor interest in quantum technology. When it comes to startup funding in this sector, Indian companies have collectively managed to raise less than Rs 50 crores as of December 2023. This sum is minuscule compared to the global quantum computing startup scene, where funding has exceeded this amount by nearly thousand times in the same period.

What the Soviet émigrés brought with them is symptomatic of what Israeli venture capitalist Erel Margalit believes can be found in a number of dynamic economies. “Ask yourself, why is it happening here?” he said of the Israeli tech boom. We were sitting in a trendy Jerusalem restaurant he owns, next to a complex he built that houses his venture fund and a stable of start-ups. “Why is it happening on the East Coast or the West Coast of the United States? A lot of it has to do with immigrant societies. In France, if you are from a very established family, and you work in an established pharmaceutical company, for example, and you have a big office and perks and a secretary and all that, would you get up and leave and risk everything to create something new? You wouldn’t. You’re too comfortable. But if you’re an immigrant in a new place, and you’re poor,” Margalit continued, “or you were once rich and your family was stripped of its wealth—then you have drive. You don’t see what you’ve got to lose; you see what you could win. That’s the attitude we have here—across the entire population.

Industry leaders like IBM, Google, and Microsoft have been at the forefront, channeling significant portions of their extensive R&D budgets into quantum computing research and development. Alongside these tech giants, a dynamic landscape of startups has emerged, with companies such as Rigetti Computing, IonQ, and D-Wave collectively securing hundreds of millions of dollars in funding.

Each year about 600,000 start-ups are launched. Less than 0.5 percent attract VC. Of Inc. magazine's annual list of the 500 fastest growing companies in the United States assessed over a decade (1997–2007), less than 20 percent of companies were venture backed” - “62.4 percent of VC investments were completely lost while 3.1 percent of the investments accounted for 53 percent of the profits for roughly 600 investments

Michael Arrington, the loudmouth founder and former editor in chief of TechCrunch, is famous for investing in the start-ups that his blogs would then cover. Although he no longer runs TechCrunch, he was a partner in two investment funds during his tenure and now manages his own, CrunchFund. In other words, even when he is not a direct investor he has connections or interests in dozens of companies on his beat, and his insider knowledge helps turn profits for the firm.

During the globalization wave, Amazon had lost the battle for e-commerce to Ebay, the battle for digital media to Apple, and the battle for technology innovation to Google. Bezos was hungry to re-invent Amazon over a decade after it was founded. The two masterstrokes of Bezos that created new revenue streams by renting out Amazon’s infrastructure – Amazon Prime and Amazon Web Services (AWS) – were at the time, shots in the dark. They would end up turning things around.

Exact figures are impossible to obtain, since the state never releases them, but today there are over three hundred multinational companies and six thousand start-ups that employ hundreds of thousands of people. Sales are booming, with defense exports reaching an all-time high in 2021 of US$11.3 billion, having risen 55 percent in two years. Israel’s cybersecurity firms are also soaring, with US$8.8 billion raised in one hundred deals in 2021. In the same year, Israeli cyber companies took in 40 percent of the world’s funding in the sector.

wondered how old she was. When she first sat down I’d thought she was in her midthirties, closer to my age, but her smile, and the spray of faded freckles across the bridge of her nose made her look younger. Twenty-eight maybe. My wife’s age. “And I work, of course, when I fly,” I added. “What do you do?” I gave her the short story version, how I funded and advised Internet start-up companies. I didn’t tell her how I’d made most of my money—by selling those companies off as soon as they looked promising. And I didn’t tell her that I never really needed to work again

Sheryl once explained the cycle of wealth to me as she saw it. I was complaining that someone I really admired had retired from Facebook at a very young age. I couldn’t understand why they’d do that. What would they do instead that would be so interesting? She said matter-of-factly that they would probably follow the cycle of wealth she’d observed at Google and Facebook: exotic travel for a year or more before becoming bored of that, then transitioning to getting very fit or some other personal goal. After achieving that goal, buying a boat or some other extravagant hobby purchase, and then finally getting divorced or going through some other personal crisis. If they come back from that, maybe they attempt their own start-up or fund or, most likely, philanthropy.

The overall data shows that more than twice the money flows into venture capital from LPs than comes back to them in a given year. I wanted to hold onto something positive from this industry—after all, I’ve met a few brilliant people in it—but looking at the data, it’s hard, if not impossible. In a Freudian sense, it's worth remembering that sometimes a cigar is just a cigar—not everything has a deeper psychological meaning. VCs have made it look like magic, but the illusion disappears once you turn on the lights. At its core, venture capital isn’t as much a unique asset class as it is a troubled one. The industry survives by injecting more and more capital each year, while leaving the majority of limited partners stuck at the losing end of a pay-your-bid auction.

In 2012 Kurzweil was appointed a director of engineering at Google, and a year later Google launched a sub-company called Calico whose stated mission is ‘to solve death’.26 In 2009 Google appointed another immortality true-believer, Bill Maris, to preside over the Google Ventures investment fund. In a January 2015 interview, Maris said, ‘If you ask me today, is it possible to live to be 500, the answer is yes.’ Maris backs up his brave words with a lot of hard cash. Google Ventures is investing 36 per cent of its $2 billion portfolio in life sciences start-ups, including several ambitious life-extending projects. Using an American football analogy, Maris explained that in the fight against death, ‘We aren’t trying to gain a few yards. We are trying to win the game.’ Why? Because, says Maris, ‘it is better to live than to die’.27

Take the New York–based Lemonade, arguably the best funded of today’s crowdsurance startups. Via an app, Lemonade brings together small groups of policyholders who pay premiums into a central “claim pool.” Artificial intelligence does the rest. The entire experience is mobile, simple, and fast. Ninety seconds to get insured, three minutes to get a claim paid, and zero paperwork. Adding more technology to this arrangement, companies like the Swiss firm Etherisc sell “bespoke insurance products” on the Ethereum blockchain. Because smart contracts remove the need for employees, paperwork, and all the rest, all sorts of new insurance products are being created. Etherisc’s first offering is something not covered by traditional insurers: flight delays and cancellations. Individuals sign up via credit card, and if their plane is more than forty-five minutes late, they’re paid instantly, automatically, and without the need for any paperwork.

The engineers were constantly baffled by what Musk would fund and what he wouldn’t. Back at headquarters, someone would ask to buy a $200,000 machine or a pricey part that they deemed essential to Falcon 1’s success, and Musk would deny the request. And yet he was totally comfortable paying a similar amount to put a shiny surface on the factory floor to make it look nice. On Omelek, the workers wanted to pave a two-hundred-yard pathway between the hangar and the launchpad to make it easier to transport the rocket. Musk refused. This left the engineers moving the rocket and its wheeled support structure in the fashion of the ancient Egyptians. They laid down a series of wooden planks and rolled the rocket across them, grabbing the last piece of wood from the back and running it forward in a continuous cycle. The whole situation was ludicrous. A start-up rocket company had ended up in the middle of nowhere trying to pull off one of the most difficult feats known to man, and, truth be told, only a

Smart Sexy Money is About Your Money As an accomplished entrepreneur with a history that spans more than fourteen years, Annette Wise is constantly looking for ways to give back to her community. Using enterprising efforts, she qualified for $125,000 in startup funding to develop a specialized residential facility that allows developmentally disabled adults to live in the community after almost a lifetime of living in a state institution. In doing so, she has provided steady employment in her community for the last thirteen years. After dedicating years to her residential facility, Annette began to see clearly the difficulty business owners face in planning for retirement successfully. Searching high and low to find answers, she took control of financial uncertainty and in less than 2 years, she became a Full Life Agent, licensed Registered Representative, Investment Advisor Representative and Limited Principal. Her focus is on building an extensive list of clients that depend on her for smart retirement guidance, thorough college planning, detailed business continuation, and business exit strategies. Clients have come to rely on Annette for insight on tax advantaged savings and retirement options. Annette’s primary goal is to help her clients understand more than just concepts, but to easily understand how money works, the consequences of their decisions and how they work in conjunction with their desires and goal. Ever the curious soul who is always up for a challenge, Annette is routinely resourceful at finding sensible means to a sometimes-challenging end. She believes in infinite possibilities as well as in sharing her knowledge with others. She is the go-to source for “Smart Wealth Solutions.” Among Annette’s proudest accomplishments are her two wonderful sons, Michael III and Matthew. As a single mom, they have been her inspiration and joy. She is forever grateful to the greatest brothers in the world- Andrew and Anthony Wise, for assistance in grooming them into amazing young men.

Everything about this project was dark alley, cloak and dagger. Even the way they financed the operation was highly unconventional: using secret contingency funds, they back-doored payment to Lockheed by writing personal checks to Kelly for more than a million bucks as start-up costs. The checks arrived by regular mail at his Encino home, which had to be the wildest government payout in history. Johnson could have absconded with the dough and taken off on a one-way ticket to Tahiti. He banked the funds through a phony company called “C & J Engineering,” the “C & J” standing for Clarence Johnson. Even our drawings bore the logo “C & J”—the word “Lockheed” never appeared. We used a mail drop out at Sunland, a remote locale in the San Fernando Valley, for suppliers to send us parts. The local postmaster got curious about all the crates and boxes piling up in his bins and looked up “C & J” in the phone book and, of course, found nothing. So he decided to have one of his inspectors follow our unmarked van as it traveled back to Burbank. Our security people nabbed him just outside the plant and had him signing national security secrecy forms until he pleaded writer’s cramp.

Revitalized and healthy, I started dreaming new dreams. I saw ways that I could make a significant contribution by sharing what I’ve learned. I decided to refocus my legal practice on counseling and helping start-up companies avoid liability and protect their intellectual property. To share some of what I know, I started a blog, IP Law for Startups, where I teach basic lessons on trade secrets, trademarks, copyrights, and patents and give tips for avoiding the biggest blunders that destroy the value of intellectual assets. Few start-up companies, especially women-owned companies that rarely get venture capital funding, can afford the expensive hourly rates of a large law firm to the get the critical information they need. I feel deeply rewarded when I help a company create a strategy that protects the value of their company and supports their business dreams. Further, I had a dream to help young women see their career possibilities. In partnership with my sister, Julie Simmons, I created lookilulu.com, a website where women share their insights, career paths, and ways they have integrated motherhood with their professional pursuits. When my sister and I were growing up on a farm, we had a hard time seeing that women could have rewarding careers. With Lookilulu® we want to help young women see what we couldn’t see: that dreams are not linear—they take many twists and unexpected turns. As I’ve learned the hard way, dreams change and shift as life happens. I’ve learned the value of continuing to dream new dreams after other dreams are derailed. I’m sure I’ll have many more dreams in my future. I’ve learned to be open to new and unexpected opportunities. By way of postscript, Jill writes, “I didn’t grow up planning to be lawyer. As a girl growing up in a small rural town, I was afraid to dream. I loved science, but rather than pursuing medical school, I opted for low-paying laboratory jobs, planning to quit when I had children. But then I couldn’t have children. As I awakened to the possibility that dreaming was an inalienable right, even for me, I started law school when I was thirty; intellectual property combines my love of law and science.” As a young girl, Jill’s rightsizing involved mustering the courage to expand her dreams, to dream outside of her box. Once she had children, she again transformed her dreams. In many ways her dreams are bigger and aim to help more people than before the twists and turns in her life’s path.

The evidence for the cognitive interpretation of the above-average effect is that when people are asked about a task they find difficult (for many of us this could be “Are you better than average in starting conversations with strangers?”), they readily rate themselves as below average. The upshot is that people tend to be overly optimistic about their relative standing on any activity in which they do moderately well. I have had several occasions to ask founders and participants in innovative start-ups a question: To what extent will the outcome of your effort depend on what you do in your firm? This is evidently an easy question; the answer comes quickly and in my small sample it has never been less than 80%. Even when they are not sure they will succeed, these bold people think their fate is almost entirely in their own hands. They are surely wrong: the outcome of a start-up depends as much on the achievements of its competitors and on changes in the market as on its own efforts. However, WYSIATI plays its part, and entrepreneurs naturally focus on what they know best—their plans and actions and the most immediate threats and opportunities, such as the availability of funding. They know less about their competitors and therefore find it natural to imagine a future in which the competition plays little part.

a young Goldman Sachs banker named Joseph Park was sitting in his apartment, frustrated at the effort required to get access to entertainment. Why should he trek all the way to Blockbuster to rent a movie? He should just be able to open a website, pick out a movie, and have it delivered to his door. Despite raising around $250 million, Kozmo, the company Park founded, went bankrupt in 2001. His biggest mistake was making a brash promise for one-hour delivery of virtually anything, and investing in building national operations to support growth that never happened. One study of over three thousand startups indicates that roughly three out of every four fail because of premature scaling—making investments that the market isn’t yet ready to support. Had Park proceeded more slowly, he might have noticed that with the current technology available, one-hour delivery was an impractical and low-margin business. There was, however, a tremendous demand for online movie rentals. Netflix was just then getting off the ground, and Kozmo might have been able to compete in the area of mail-order rentals and then online movie streaming. Later, he might have been able to capitalize on technological changes that made it possible for Instacart to build a logistics operation that made one-hour grocery delivery scalable and profitable. Since the market is more defined when settlers enter, they can focus on providing superior quality instead of deliberating about what to offer in the first place. “Wouldn’t you rather be second or third and see how the guy in first did, and then . . . improve it?” Malcolm Gladwell asked in an interview. “When ideas get really complicated, and when the world gets complicated, it’s foolish to think the person who’s first can work it all out,” Gladwell remarked. “Most good things, it takes a long time to figure them out.”* Second, there’s reason to believe that the kinds of people who choose to be late movers may be better suited to succeed. Risk seekers are drawn to being first, and they’re prone to making impulsive decisions. Meanwhile, more risk-averse entrepreneurs watch from the sidelines, waiting for the right opportunity and balancing their risk portfolios before entering. In a study of software startups, strategy researchers Elizabeth Pontikes and William Barnett find that when entrepreneurs rush to follow the crowd into hyped markets, their startups are less likely to survive and grow. When entrepreneurs wait for the market to cool down, they have higher odds of success: “Nonconformists . . . that buck the trend are most likely to stay in the market, receive funding, and ultimately go public.” Third, along with being less recklessly ambitious, settlers can improve upon competitors’ technology to make products better. When you’re the first to market, you have to make all the mistakes yourself. Meanwhile, settlers can watch and learn from your errors. “Moving first is a tactic, not a goal,” Peter Thiel writes in Zero to One; “being the first mover doesn’t do you any good if someone else comes along and unseats you.” Fourth, whereas pioneers tend to get stuck in their early offerings, settlers can observe market changes and shifting consumer tastes and adjust accordingly. In a study of the U.S. automobile industry over nearly a century, pioneers had lower survival rates because they struggled to establish legitimacy, developed routines that didn’t fit the market, and became obsolete as consumer needs clarified. Settlers also have the luxury of waiting for the market to be ready. When Warby Parker launched, e-commerce companies had been thriving for more than a decade, though other companies had tried selling glasses online with little success. “There’s no way it would have worked before,” Neil Blumenthal tells me. “We had to wait for Amazon, Zappos, and Blue Nile to get people comfortable buying products they typically wouldn’t order online.

In fact, the same basic ingredients can easily be found in numerous start-up clusters in the United States and around the world: Austin, Boston, New York, Seattle, Shanghai, Bangalore, Istanbul, Stockholm, Tel Aviv, and Dubai. To discover the secret to Silicon Valley’s success, you need to look beyond the standard origin story. When people think of Silicon Valley, the first things that spring to mind—after the HBO television show, of course—are the names of famous start-ups and their equally glamorized founders: Apple, Google, Facebook; Jobs/ Wozniak, Page/ Brin, Zuckerberg. The success narrative of these hallowed names has become so universally familiar that people from countries around the world can tell it just as well as Sand Hill Road venture capitalists. It goes something like this: A brilliant entrepreneur discovers an incredible opportunity. After dropping out of college, he or she gathers a small team who are happy to work for equity, sets up shop in a humble garage, plays foosball, raises money from sage venture capitalists, and proceeds to change the world—after which, of course, the founders and early employees live happily ever after, using the wealth they’ve amassed to fund both a new generation of entrepreneurs and a set of eponymous buildings for Stanford University’s Computer Science Department. It’s an exciting and inspiring story. We get the appeal. There’s only one problem. It’s incomplete and deceptive in several important ways. First, while “Silicon Valley” and “start-ups” are used almost synonymously these days, only a tiny fraction of the world’s start-ups actually originate in Silicon Valley, and this fraction has been getting smaller as start-up knowledge spreads around the globe. Thanks to the Internet, entrepreneurs everywhere have access to the same information. Moreover, as other markets have matured, smart founders from around the globe are electing to build companies in start-up hubs in their home countries rather than immigrating to Silicon Valley.

Found a startup society. This is simply an online community with aspirations of something greater. Anyone can found one, just like anyone can found a company or cryptocurrency.2 And the founder’s legitimacy comes from whether people opt to follow them. Organize it into a group capable of collective action. Given a sufficiently dedicated online community, the next step is to organize it into a network union. Unlike a social network, a network union has a purpose: it coordinates its members for their mutual benefit. And unlike a traditional union, a network union is not set up solely in opposition to a particular corporation, so it can take a variety of different collective actions.3 Unionization is a key step because it turns an otherwise ineffective online community into a group of people working together for a common cause. Build trust offline and a cryptoeconomy online. Begin holding in-person meetups in the physical world, of increasing scale and duration, while simultaneously building an internal economy using cryptocurrency. Crowdfund physical nodes. Once sufficient trust has been built and funds have been accumulated, start crowdfunding apartments, houses, and even towns to bring digital citizens into the physical world within real co-living communities. Digitally connect physical communities. Link these physical nodes together into a network archipelago, a set of digitally connected physical territories distributed around the world. Nodes of the network archipelago range from one-person apartments to in-person communities of arbitrary size. Physical access is granted by holding a web3 cryptopassport, and mixed reality is used to seamlessly link the online and offline worlds. Conduct an on-chain census. As the society scales, run a cryptographically auditable census to demonstrate the growing size of your population, income, and real-estate footprint. This is how a startup society proves traction in the face of skepticism. Gain diplomatic recognition. A startup society with sufficient scale should eventually be able to negotiate for diplomatic recognition from at least one pre-existing government, and from there gradually increased sovereignty, slowly becoming a true network state.

keep coming back to this: it’s all the same money. Each dollar of VC funding for another useless startup in an already crowded space is the same legal tender that allows or denies someone access to housing, food, insulin.

Irrational exuberance* is the psychological basis of a speculative bubble.

Raise Startup Capital For Your Business Funding a startup business is quite a daunting task especially if you’re short of funds or you don't have previous experience of running a business. In order to stay afloat, you need to be prepared for a multitude of issues and fund raising is a huge issue for new entrepreneurs in this field. With a few tips you can get the best deal on funding and establish a professional relationship with your Small Business Accountants. When the final decision is made to go ahead with the capital raise, make sure you have all your ducks in a row.

During the business start-up process, you will discover that this experience is a cruel teacher. It often gives the test before the lesson.

Make your move before you are ready.

Before you can set about getting traction, you have to define what traction means for your company. You need to set a traction goal. At the earliest stages, this traction goal is usually to get enough traction to either raise funding or become profitable. In any case, you should figure out what this goal means in terms of hard numbers. How many customers do you need and at what growth rate? Your traction strategy should always be focused on moving the needle for your traction goal. By moving the needle, we mean focusing on marketing activities that result in a measurable, significant impact on your traction goal. It should be something that advances your user acquisition goal in a meaningful way, not something that would be just a blip even if it worked.

Problems are the necessary friction that makes great business opportunities possible.

Research published in 2018 by Boston Consulting Group found that although on average female business owners receive less than half the level of investment their male counterparts get, they produce more than twice the revenue. For every dollar of funding, female-owned start-ups generate seventy-eight cents, compared to male-owned start-ups which generate thirty-one cents. They also perform better over time, ‘generating 10% more in cumulative revenue over a five-year period’.

The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined. This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments. (Even quite successful companies usually succeed on a more humble scale.) This leads to rule number two: because rule number one is so restrictive, there can’t be any other rules.

Israel has more companies registered on the NASDAQ and the New York Stock Exchange than any other country in the world per capita, more start-ups per capita, more academic papers in the field of medicine per capita, and more venture capital funds per capita.

The deep work paid off. Benn quickly landed a job as a developer at a San Francisco tech start-up with $25 million in venture funding and its pick of employees. When Benn quit his job as a financial consultant, only half a year earlier, he was making $40,000 a year. His new job as a computer developer paid $100,000—an amount that can continue to grow, essentially without limit in the Silicon Valley market, along with his skill level.

The term “network effect” has almost become a cliché. It’s a punch line to difficult questions, like “What if your competition comes after you?” Network effects. “Why will this keep growing as quickly as it has?” Network effects. “Why fund this instead of company X?” Network effects. Every startup claims to have it, and it’s become a standard explanation for why successful companies break out.

Over a generation, America has grappled with one problem after another that could be said to have contributed to the decay of its politics and many people’s livelihoods. The American social contract has frayed, and workers’ lives have grown more precarious, and mobility has slowed. These are hard and important problems. The new winners of the age might well have participated in the writing of a new social contract for a new age, a new vision of economic security for ordinary people in a globalized and digitized world. But as we’ve seen, they actually made the situation worse by seeking to bust unions and whatever other worker protections still lingered and to remake more and more of the society as an always-on labor market in which workers were downbidding one another for millions of little fleeting gigs. “Any industry that still has unions has potential energy that could be released by start-ups,” the Silicon Valley venture capitalist Paul Graham once tweeted. As America’s level of inequality spread to ever more unmanageable levels, these MarketWorld winners might have helped out. Looking within their own communities would have told them what they needed to know. Doing everything to reduce their tax burdens, even when legal, stands in contradiction with their claims to do well by doing good. Diverting the public’s attention from an issue like offshore banking worsens the big problems, even as these MarketWorlders shower attention on niche causes. As life expectancy declined among large subpopulations of Americans, winners possessed of a sense of having arrived might have chipped in. They might have taken an interest in the details of a health care system that was allowing the unusual phenomenon of a developed country regressing in this way, or in the persistence of easily preventable deaths in the developing world. They might not have thought of themselves at all, given how long they were likely to live because of their tremendous advantages. “It seems pretty egocentric while we still have malaria and TB for rich people to fund things so they can live longer,” Bill Gates has said.

Four of the directors were there to perform more mundane tasks. Kaufman, Earle, Raskob, and du Pont would supply the requisite start-up funds, but not even those millionaires were willing to put up the cost of the entire undertaking. The issuance of stock was not deemed suitable. They needed a $27.5 million loan. They

And so here’s the VC conundrum: whether to focus on early-stage investments, where the risks are higher, the potential returns larger, but the fund size—and thus fee income—is smaller, or on later-stage deals where the risks are lower, the fees fatter, but the opportunities for tenfold returns are much rarer.

Unequal support with respect to items such as equipment managers, trainers, massage therapists, meals, hotel accommodations, and transportation; • The commitment of funds to pay for 14-year-old boys and not girls to live and train in Bradenton, Florida, while attending a private soccer academy; • The commitment of $10 million to build soccer stadiums for a for-profit professional league for men, Major League Soccer (“MLS”); • The commitment to loan or give millions to assist in the start-up of MLS. Correspondingly, when repeatedly asked by the Women’s United Soccer Association (“WUSA”) for start-up funding to help relaunch a league, US Soccer has repeatedly claimed “it is not in the business of building leagues”;

At Founders Fund, we focus on five to seven companies in a fund, each of which we think could become a multibillion-dollar business based on its unique fundamentals.

A prevalent misjudgment among new entrepreneurs is aiming for investor funds without considering the mentorship and experience these financial backers offer. Startup enthusiasts often chase after capital gains while overlooking the rich well of knowledge and connections that come with the right investors

The pitfall for many in the startup scene is seeing investors just as financial resources, rather than as wellsprings of knowledge and strategic guidance. Securing funding is often the sole focus of startup idea owners, bypassing the opportunity to tap into the wealth of wisdom from angel investors and venture capitalists

The oversight of merely seeking financial support, without valuing the expertise investors bring, can limit a startup's potential for growth and innovation. Many startup owners focus too narrowly on funding, underestimating the importance of the strategic advice and networks that savvy investors bring to the table.

A roller coaster is all about fast thrills and wild, whiplashing movements. They can be a lot of fun, but they aren’t a good model for effective product management. Investors and executives like to see immediate results, and when those results don’t materialize right away, they can be tempted to pivot suddenly, resulting in whiplash for the product team. This problem comes from setting a time horizon that is too short. For startups, a lack of patience is often the result of having a very short runway. They have to get something up and running fast so they can raise the next round of funding, or they need to start producing revenue right away. Of course, everyone wants to make fast and efficient progress, but providing insufficient opportunity for success will result in false negatives that can lead product managers astray. When an otherwise healthy “fail-fast” mentality is taken to the extreme, it can stifle innovation. “We think this new feature is a good idea,” a product manager might say. “To avoid overinvesting, we’ll first launch a lackluster version of it. If it doesn’t get overwhelmingly positive results immediately, then we’ll know it’s not the right direction for our product.” Daisy-chained together, these false negatives result in a headache-inducing roller coaster ride for product development that ends up in exactly the same place it started.

For a study in contrast, consider the European Union’s venture interventions. In 2001, the European Commission allocated more than €2 billion ($1.9 billion) for venture subsidies. But it failed to pair this capital with the design features underpinning Israel’s success. Europe did not recognize limited partnerships. It did not address burdensome labor-market regulations. It failed to build startup-friendly stock markets to facilitate VC exits. As a result, rather than crowding in private venture operators, the European initiative crowded them out: given the limited entrepreneurial opportunities in Europe, commercial VC partnerships were not interested in competing with subsidized public investors.54 Worse, because government-sponsored investors were less skilled and motivated than private ones, this displacement reduced the quality of European VC: deal selection and post-investment coaching deteriorated. From the beginning of the industry through the end of 2007, the average European venture fund generated a return of minus 4 percent.

CrowdSmart, which Polese cofounded in 2015, uses “human-powered AI” to help investors choose which young companies to bankroll. In 2016, to test its platform, CrowdSmart raised a small fund and invested in nearly thirty start-ups that its algorithm had rated highly. Within eighteen months, 80 percent of the companies went on to attract outside follow-up funding at an increased valuation—a substantially better result than most venture funds achieve, Polese says—and 40 percent were founded or led by women. That’s what happens

CrowdSmart, which Polese cofounded in 2015, uses “human-powered AI” to help investors choose which young companies to bankroll. In 2016, to test its platform, CrowdSmart raised a small fund and invested in nearly thirty start-ups that its algorithm had rated highly. Within eighteen months, 80 percent of the companies went on to attract outside follow-up funding at an increased valuation—a substantially better result than most venture funds achieve, Polese says—and 40 percent were founded or led by women. That’s what happens when you de-bias the process.

The idea was for the government to invest $100 million to create ten new venture capital funds. Each fund had to be represented by three parties: Israeli venture capitalists in training, a foreign venture capital firm, and an Israeli investment company or bank. There was also one Yozma fund of $20 million that would invest directly in technology companies. The Yozma program initially offered an almost one-and-a-half-to-one match. If the Israeli partners could raise $12 million to invest in new Israeli technologies, the government would give the fund $8 million. There was a line around the corner. So the government raised the bar. It required VC firms to raise $16 million in order to get the government’s $8 million. The real allure for foreign VCs, however, was the potential upside built into this program. The government would retain a 40 percent equity stake in the new fund but would offer the partners the option to cheaply buy out that equity stake—plus annual interest—after five years, if the fund was successful. This meant that while the government shared the risk, it offered investors all of the reward. From an investor’s perspective, it was an unusually good deal.

Topics & Questions for Discussion In Chapter One, “Cyrus Jones and the Magic Funeral,” Asha describes Cyrus as “mostly human, a little bit cartoon, a tiny bit ghost.” Having read the book, what do you think of Cyrus as a character? Have you met anyone like him in real life? Think back to your high school crush(es). Do you recall that first feeling of attraction? How would you react if you happened upon that person now? What does Asha’s relationship with her older sister Mira bring to story? How does she add to your understanding of Asha as a person? Jules is a source of support, emotional and financial, for Cyrus and Asha. What other roles does he play in the novel? Recall the manifesto Cyrus writes in Chapter Three: “We don’t try to convince people to buy things We don’t spy on anyone We don’t sell our souls (we don’t sell anything) and We are equal partners and make all decisions together.” Did you predict any of these points might falter? Were you correct? Consider what kind of workplace Utopia is. Would you like to work there? What elements would you like to see in your current work situation? At the end of Chapter Five, Asha thinks about the cultural differences between her and Cyrus, contemplating his “whiteness.” To what extent do you think their differences affect their understanding of each other? Have you had to think about cultural differences in a similar way? Besides WAI, several other app ideas are mentioned in the novel: Consentify, LoneStar, Buttery, Flitter, and so on. Discuss your favorite, or if you have any other start up ideas. Asha, Cyrus, and Jules must delve into all the logistical aspects of starting and growing a business, from assembling the right team to sourcing funding. What seem to be the biggest challenges to starting a business? The novel deals with themes of gender dynamics and white male privilege throughout. At what points can you see these dynamics at play, and how do the characters respond? If you were Asha’s friend, or family member, how would you react to her relationship with Cyrus? Would you have warned her or supported her? What does or doesn’t seem to work about their marriage?

David versus Goliath Asymmetry lies at the heart of network-based competition. The larger or smaller network will be at different stages of the Cold Start framework and, as such, will gravitate toward a different set of levers. The giant is often fighting gravitational pull as its network grows and saturates the market. To combat these negative forces, it must add new use cases, introduce the product to new audiences, all while making sure it’s generating a profit. The upstart, on the other hand, is trying to solve the Cold Start Problem, and often starts with a niche. A new startup has the luxury of placing less emphasis on profitability and might instead focus on top-line growth, subsidizing the market to grow its network. When they encounter each other in the market, it becomes natural that their competitive moves reflect their different goals and resources. Startups have fewer resources—capital, employees, distribution—but have important advantages in the context of building new networks: speed and a lack of sacred cows. A new startup looking to compete against Zoom might try a more specific use case, like events, and if that doesn’t work, they can quickly pivot and try something else, like corporate education classes. Startups like YouTube, Twitch, Twitter, and many other products have similar stories, and went through an incubation phase as the product was refined and an initial network was built. Trying and failing many times is part of the startup journey—it only takes the discovery of one atomic network to get into the market. With that, a startup is often able to start the next leg of the journey, often with more investment and resources to support them. Contrast that to a larger company, which has obvious advantages in resources, manpower, and existing product lines. But there are real disadvantages, too: it’s much harder to solve the Cold Start Problem with a slower pace of execution, risk aversion, and a “strategy tax” that requires new products to align to the existing business. Something seems to happen when companies grow to tens of thousands of employees—they inevitably create rigorous processes for everything, including planning cycles, performance reviews, and so on. This helps teams focus, but it also creates a harder environment for entrepreneurial risk-taking. I saw this firsthand at Uber, whose entrepreneurial culture shifted in its later years toward profitability and coordinating the efforts of tens of thousands. This made it much harder to start new initiatives—for better and worse. When David and Goliath meet in the market—and often it’s one Goliath and many investor-funded Davids at once—the resulting moves and countermoves are fascinating. Now that I have laid down some of the theoretical foundation for how competition fits into Cold Start Theory, let me describe and unpack some of the most powerful moves in the network-versus-network playbook.

In the modern world, you do not die from hunger but indigestion. Not all but many sectors and many startups or new-age companies in India have now indigestion type of situation. Do not raise so much funds that you get indigestion and become your own enemy.

If it takes $300bn to end world hunger, and 7 trillion to fund the next AI wonder, how many people have to starve to death, to feed the appetite of the cyberworld?

The chances of a venture-backed startup surviving five years, which is less than fifty percent, is the same as for all new companies, regardless of the source of funds.

If the Forge people are vying for more power in the government, then it makes sense for them to fund more startups. Then they can place people out there in the business world who will grow in power and wealth and later be loyal to the ones who granted them their opportunity.

I am not anti-venture capital. I am anti-everyone-thinking-venture-capital-is-the-only-way-to-start-a-tech-company.” The dream of being picked from a sea of wannapreneurs, anointed as a “real” founder, and handed buckets of money is alive and well in Silicon Valley and other startup hubs around the world. Except there’s something wrong with seeking this narrative . . . It’s lazy. It implies that you need someone else’s permission to build your company. That you’re not a real entrepreneur until an investor tells you that you are. Or maybe you like having an excuse not to ship, and a never-ending quest for funding is a pretty good excuse. There’s a reason the most common piece of advice I give aspiring founders is: Build your business, not your slide deck. Instead of waiting for a basket of money to fall into your lap, go build your business. If you were an author, I would tell you to stop asking publishers for permission and go write your book. Andy Weir (author of The Martian) didn’t wait for approval; he wrote an international bestseller that’s been made into a film starring Matt Damon.

I nostri cinque peccati che scoraggiano ricerca e innovazione Dalla politica all’università, il sistema italiano continua a ostacolare l’economia della conoscenza Start-up al palo Dai laboratori al business: in Italia è ancora difficile riuscire a trasferire le scoperte teoriche nell’industria Riccardo Viale | 831 parole Da quando è stato introdotto il concetto di economia e di società della conoscenza, come importante elemento delle politiche pubbliche, si è iniziato ad analizzare l’insieme delle condizioni di contorno - le «framework condition» - in grado di stimolare o di ostacolare lo sviluppo di questo modello. La strategia di Lisbona del 2000 aveva lo scopo di rendere l’Europa l’area più competitiva a livello mondiale proprio come economia e società della conoscenza. Oggi abbiamo i risultati: in media c’è stato un arretramento, secondo la maggior parte degli indicatori, rispetto ai principali concorrenti internazionali. E l’Italia? Come si può immaginare, non ha realizzato alcun serio passo in avanti: non solo per le condizioni dirette (come finanziamento alla ricerca, numero di ricercatori e di brevetti, indici bibliometrici o rapporto università-impresa), ma per le «framework conditions». Ma più che dare dati vorrei riferirmi ad una serie di situazioni tipiche, ragionando con il modello degli incentivi dal macro al micro. Per mostrare come la dinamica sociale ed economica italiana sia intrisa di incentivi negativi. La logica del breve termine Innanzitutto, a livello di sistema politico e di governo nazionale e regionale, gli obiettivi dell’economia e della società della conoscenza sono in genere percepiti di medio e lungo termine. Di conseguenza, in un Paese che vive lo «shortermismo» della logica emergenziale, nulla è più marginale del sistema della Ricerca&Sviluppo. Questo «bias», d’altra parte, non è solo italiano, se si considera la recente scelta di Juncker di indebolire il fondo «Horizon 2020» per potenziare quello di stimolo immediato all’economia. Seconda tipologia. Le università italiane sono fuori da tutte le graduatorie internazionali. Anche le migliori, come il Politecnico di Milano e Torino o la Bocconi, sono a metà classifica. Si sa che uno degli strumenti prioritari per stimolare l’eccellenza e la diversificazione accademica è la «premialità economica» dei migliori atenei, secondo un sistema simile a quello del «Rae» britannico: lasciando da parte il problema del mediocre sistema italiano della valutazione, mentre in Gran Bretagna l’incentivo economico arriva a un terzo del finanziamento pubblico, da noi si ferma a molto meno (anche se dai tempi del ministro Moratti si vede un certo progresso). Non esiste, quindi, un sufficiente effetto incentivante di tipo meritocratico sulla produzione di conoscenza. Terza tipologia. Anni fa, in Lombardia, una multinazionale della telefonia aveva proposto un centro di ricerca avanzato. Ciò avrebbe consentito una collaborazione con i centri di ricerca già presenti nel territorio, in primis il Politecnico di Milano. Cosa successe dopo? Una lista di problemi, ostacoli ed incoerenze tipiche della pubblica amministrazione. Tutto questo era in contrasto con il programma dell’azienda, che decise di trasferire il progetto in un altro Paese. Quarta tipologia. Spesso si parla di sostenere le nuove idee per garantire la nascita di start-up ed imprese innovative. Ma quale incentivo può avere un ingegnere o un biochimico a creare una «newcom», quando è quasi impossibile trovare il «seed money» (quello per le fasi iniziali) nelle banche ed è quasi inesistente il capitale di rischio del venture capital, mentre non si ha la possibilità di valorizzare finanziariamente una start-up a livello di Borsa, dato che manca, in Italia ma anche in Europa, un analogo del Nasdaq? La crisi del fund raising Infine - quinta ed ultima (tra le molte) tipologia di disincentivi - è la capacità di «fund raising» per la ricerca dei

If the thought of tracking your time makes your skin crawl, you’re not alone (I know exactly how you feel). I hate tracking my time. It’s a hassle. That being said, I do it because I know that it is not only an important way of keeping things fair in a Grunt Fund, but also an invaluable tool for running a start-up.

The team spent several years working on Glitch, but it never caught on with a mainstream audience. The game was shut down in 2012 due to a lack of traction. Butterfield and his team had spent nearly four years working on a failed project. It was a painful setback—but it wasn’t “game over.” While working on Glitch, the team had built an internal productivity tool to streamline communication, and it was very effective. Instead of shutting down Tiny Speck, Butterfield decided to refocus the company around the productivity tool. They would polish and retool their internal app for external distribution, selling it to other companies with a SAAS (Software as a Service) pricing model. They called the new product Slack. The early traction for Slack was outstanding. In 2014, the company (now also known as Slack) raised $42.8 million in a new round of funding from several top tier venture firms. Later that year, they raised another $120 million, valuing the company at over $1 billion.[33] Your project might fail. But if your project fails, you don’t necessarily need to abandon your underlying passion. It’s like driving. When your car stops running, you don’t give up on the prospect of ever driving again—you get a new car so you can get back on the road. Butterfield knew he had a passion for startups, and he knew that startups were tough. When his vehicle broke down, he didn’t stop driving. He took his broken car to the dump, got a new one (with far more horsepower), and slammed his foot back down on the gas pedal.

For example, you could build many companies based on applying the cutting edge predictive analytics and data mining techniques commonly used at consumer web startups, quantitative hedge funds, etc., to less advanced industries.

the Olin Foundation provided crucial start-up funds for the Federalist Society, a powerful organization for conservative law students founded in 1982.

Consider consultant Clay Herbert, who is an expert in running crowd-funding campaigns for technology start-ups: a specialty that attracts a lot of correspondents hoping to glean some helpful advice. As a Forbes.com article on sender filters reports, “At some point, the number of people reaching out exceeded [Herbert’s] capacity, so he created filters that put the onus on the person asking for help.” Though he started from a similar motivation as me, Herbert’s filters ended up taking a different form. To contact him, you must first consult an FAQ to make sure your question has not already been answered (which was the case for a lot of the messages Herbert was processing before his filters were in place). If you make it through this FAQ sieve, he then asks you to fill out a survey that allows him to further screen for connections that seem particularly relevant to his expertise. For those who make it past this step, Herbert enforces a small fee you must pay before communicating with him. This fee is not about making extra money, but is instead about selecting for individuals who are serious about receiving and acting on advice. Herbert’s filters still enable him to help people and encounter interesting opportunities. But at the same time, they have reduced his incoming communication to a level he can easily handle.

On March 31, 2016, Securities and Exchange Commission chair Mary Jo White said this to the students of Stanford Law School: Nearly all venture valuations are highly subjective. But, one must wonder whether the publicity and pressure to achieve the unicorn benchmark is analogous to that felt by public companies to meet projections they make to the market with the attendant risk of financial reporting problems. And, yes that remains a problem. We continue to see instances of public companies and their senior executives manipulating their accounting to meet various expectations and projections.1 We have reached a point in the world of technology startups where the fervor for building a company with a billion-dollar valuation — the elusive startup unicorn — is overshadowing the creation of real value. It is not the first time we have been here; the world of startups and venture capital has always run in cycles, from optimistic zeal to caution to post-catastrophe introspection and back again. But perhaps it is time that entrepreneurs and investors alike begin waking up to the fact that the “valuation-at-all-costs” model, with its relentless pressure, remote odds of success, and human cost, is not only unsustainable but bad business. At this point in the current cycle, the radically overvalued startup appears to be headed for the endangered species list. That is a good thing. While billion-dollar behemoths will always exist, and the high-wire act of chasing scale while also chasing the cash to fund that scale will occasionally produce a solid company, there are other ways to build a business. There are better ways to build a business.

Persson did not create Minecraft because he wanted to create a billion-dollar company; he loved video games and kept his day job while developing it. When the game soared in popularity, he started a company, Mojang, with some of the profits, but kept it small, with just 12 employees. Even with zero dollars spent on marketing and no user instructions, Minecraft grew exponentially, flying past the 100 million registered user mark in 2014 based largely on word of mouth.2 Players shared user-generated extras like modifications (“mods”) and custom maps with each other, and the game caught on not only with children but their parents and even educators. Still, Persson avoided the valuation game, refusing an investment offer from former Facebook president Sean Parker. Finally, he and his co-founders sold Mojang to Microsoft for $2.5 billion, a fortune built on one man’s focus on creating something that people loved.3 On the other end of the spectrum is Zynga, one of the fastest startups ever to reach a $1 billion valuation.4 The social game developer had its first hit in 2009 with FarmVille. Next came Zynga’s partnership with Facebook that turned into a growth engine. The company began trading on the NASDAQ in December 2011 and had 253 million active users per month as late as the first quarter of 2013.5 Then the relationship with Facebook ended and the wheels started coming off. Flush with IPO cash, Zynga started exhibiting all the symptoms of ego-driven, grow-at-any-cost syndrome. They moved into a $228 million headquarters in San Francisco. They began hastily acquiring companies like NaturalMotion, Newtoy, and Area/Code. They infuriated customers by launching new games without sufficient testing and filling them with scripts that signed players up for unwanted subscriptions and services. When customer outrage went viral, instead of focusing on building better products, Zynga hired a behavioral psychologist to try to trick customers into loving its games.6 In a 2009 speech at Startup@Berkeley, CEO Mark Pincus said, “I funded [Zynga] myself but I did every horrible thing in the book to just get revenues right away. I mean, we gave our users poker chips if they downloaded this Zwinky toolbar, which . . . I downloaded it once — I couldn’t get rid of it. We did anything possible just to just get revenues so that we could grow and be a real business.”7 By the spring of 2016, Zynga had laid off about 18 percent of its workforce and its share price had declined from $14.50 in 2012 to about $2.50.

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Delays in incorporation of companies, lack of early stage (essentially seed or angel) funding, limited options around employee stock options, insolvency laws, lack of access to external commercial borrowing, and the cumbersome Foreign Exchange Management Act (FEMA) are only some of the constraints budding start-ups encounter.

So in 2013, Patagonia launched a venture capital fund to invest in environmentally and socially responsible for-profit start-ups. We wanted to apply the many lessons we have learned in trying to conduct our business more responsibly to applications beyond the outdoor apparel industry. We were willing to sacrifice short-term returns for long-term financial and environmental gains. Tin Shed Ventures serves as a vehicle for the third pillar of Patagonia’s mission statement: “ . . . use business to inspire and implement solutions to the environmental crisis.” But it also serves to do good in the world: providing funding for people who have business ideas that could help solve the environmental crisis. It is really the small private businesses we hope to influence. It is the tens of thousands of young people who dream of owning their small farm someday. All of us working together can create the change that we need.

Noah Kagan went to UC Berkeley and graduated with degrees in Business and Economics. He worked at Intel for a short stint, and then found himself at Facebook, as employee #30. You’d think this is where the story would get really good: Noah went on to become the head of product and is now worth 10 billion dollars! That’s not what happened. Instead, he was fired after eight months. Noah has been very public about this, and it’s well documented. He even wrote about why it happened, which mostly comes down to the fact that he was young and inexperienced. Here’s where the real story gets interesting. After being fired, Noah spent ten months at Mint, another successful startup. For Noah, that was a side-hustle. After Mint, he founded KickFlip, a payment provider for social games. He also started an ad company called Gambit. Both of those companies fluttered around for a while and then fizzled out. Next came AppSumo, a daily deals website for tech software. AppSumo has done very well, and it’s still in business as of this writing, but Noah eventually turned his attention to another opportunity. While building up his other businesses, he had become an expert at email marketing, and realized there was a huge need for effective marketing tools. So he created SumoMe, a software company that helps people and companies build their email lists. SumoMe has exploded since its launch. Over 200,000 sites now use it in some capacity, and that number is growing every day. It’s easy to imagine SumoMe becoming a $100 million dollar company in a matter of years, and it’s completely bootstrapped. The company has taken zero funding from venture capitalists. That means Noah can run the business exactly how he wants. I’ve known Noah for almost ten years. I met him when my first company was getting off the ground. Several months ago, we were emailing back and forth about promoting my first book. He ended one of the emails with, “Keep the hustle strong.” I smiled when I read that. Noah is, and always will be, a hustler. He’s been hustling for his entire career―for over a decade. And he deserves everything that’s coming his way. Hustle never comes without defeat. It never comes without detours and side-projects. But the best hustlers all know this simple truth: All that matters is that you keep on hustling.

Groupon is a study of the hazards of pursuing scale and valuation at all costs. In 2010, Forbes called it the “fastest growing company ever” after its founders raised $135 million in funding, giving Groupon a valuation of more than $1 billion after just 17 months.5 The company turned down a $6 billion acquisition offer from Google and went public in 2011 with one of the biggest IPOs since Google’s in 2004.6 It was one of the original unicorns. However, the business model had serious problems. Groupon sometimes sold so many Daily Deals that participating businesses were overwhelmed . . . even crippled. Other businesses accused Groupon of strong-arming them to sign up for Daily Deals. Customers started to view the group discount (the company’s bread and butter) as a sign that a participating business was desperate. Businesses stopped signing up. Journalists suggested that Groupon was prioritizing customer acquisition over retention — growth over value — and that it had gone public before it had a solid, proven business model.7 Groupon is still a player, with just over $3 billion in annual revenue in 2015. But its stock has fallen from $26 a share to about $4 today, and it has withdrawn from many international markets. Also revealing is that the company is suing IBM for patent infringement, something that will not create customer value.8 Many promising startups have paid the price for rushing to scale. We can see clues to potential future failures in the recent “down rounds” (stock purchases priced at a lower valuation than those of previous investors) hitting companies like Foursquare, Gilt Group, Jet, Jawbone, and Technorati. In their rush to build scale, executives and founders search for shortcuts to sustainable, long-term revenue growth.

In Brazil, from 2008–14, a local NGO, ReCivitas Institute, gave a monthly basic income of about US$9 to 100 residents of Quatinga Velho, a small poor village in São Paulo state, funded by private donors. In January 2016, it launched Basic Income Startup, another donor-funded project, which will give individuals a ‘lifetime’ basic income, adding another individual for each $1,000 donated. ReCivitas hopes this idea will be replicated elsewhere in Brazil and internationally.

I had several friends from law school who were very enterprising guys, much more so than the average law student. They each started businesses after practicing law at large firms for multiple years. What kind of businesses did they start? They started boutique law firms. This is completely unsurprising if you think about it. They’d spent years becoming good at delivering legal services. It was a field that they understood and could compete in. Their credentials translated too. People learn from what they’re doing and do it again on their own. It’s not just lawyers; the consulting firm Bain and Company was started by seven former partners and managers from the Boston Consulting Group. Myriad boutique investment banks and hedge funds have spun out of large financial organizations. You can see the same pattern in the startup world. After PayPal was acquired by eBay in 2002, its founders and employees went on to found or cofound LinkedIn (Reid Hoffman), YouTube (Steve Chen, Jawed Karim, and Chad Hurley), Yelp (Russel Simmons and Jeremy Stoppelman), Tesla Motors (Elon Musk), SpaceX (Musk again), Yammer (David Sacks), 500 Startups (Dave McClure), and many other companies. PayPal’s CEO, Peter Thiel, famously made a $500,000 investment in Facebook that grew to over $1 billion. In this sense, PayPal is one of the most prolific companies of recent times. But if you look at any successful growth company you’ll start to see their alumni show up doing parallel things. Former Apple employees founded or cofounded Android, Palm, Nest, and Handspring, companies that revolve around devices. Former Yahoo! employees founded Ycombinator, Cloudera, Hunch.com, AppNexus, Polyvore, and many other web-oriented companies. Organizations give rise to other organizations like themselves.

It's better to be treated as a paper airplane than a fighter jet. When you are disrupting, the best possible start-up scenario is to be dismissed, even ignored, just as Blockbuster ignored Netflix—right up until Blockbuster was "netflixed."17 Southern New Hampshire University (SNHU) is a good example of an organization that took on fly-under-the-radar market risk.18 A decade ago, SNHU was a two-thousand-student college with declining enrollment. Instead of trying to increase enrollment by competing for Ivy League-caliber professors at the high end or with government-funded community colleges at the low end, the university chose to play where no one else was playing—online. There was no guarantee that students would be interested in online degree programs. But because SNHU took on market risk, playing where no one else was playing, and there were many students looking for the flexibility provided by online courses, it is now considered the Amazon of education, with thirty-four thousand students enrolled. SNHU is in the process of jumping to yet another growth curve to decrease the cost of a college degree by measuring competencies rather than credits. One student demonstrated all 120 competencies in one hundred days. His associate's degree cost a grand total of $1,250. A good example of taking on market risk in personal, career terms is Amy Jo Martin, founder of Digital Royalty. In 2008, of the hundreds of millions of dollars being spent on advertising and publicity by the NBA, very little was allocated to social media. Martin saw an unmet need, and leveraged her expertise to persuade the Phoenix Suns to hire her as director of digital media, a first-of-its-kind position within the NBA. Martin's clients have included Shaquille O'Neal, and she has more than a million Twitter followers. Her gig sounds fantastically fun, but at the outset people wondered if it was even a job.

Facebook, the best investment in our 2005 fund, returned more than all the others combined. Palantir, the second-best investment, is set to return more than the sum of every other investment aside from Facebook. This highly uneven pattern is not unusual: we see it in all our other funds as well. The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.

Meanwhile, on Raghav’s wish list was a film company. He was a Hindi film buff, but he was not in any way star-struck. He simply thought it was a good business idea, and that the time was right. Vandana, who had a lot of connections in the film industry, was to be a part of the venture. Raghav launched the film company as a personal venture, though TV18 was a minority investor, with a holding of 20 per cent. In June, the Indian Film Company raised Rs 400 crore at London’s Alternative Investment Market, much to Raghav’s amazement. ‘Almost any guy with even half a track record and a gleam of new economy, media or technology in his eye could go to London, float a company which hardly did anything, probably even if revenues were zero, and pick up equity. We did exactly that with our film fund. We had no track record in the film business. Zero.’ But investors were more than willing to throw money around in 2007.

was improving the lives of the current residents and laying the groundwork for generations to come. The CityForge founders had come up with the idea while they were undergraduates at UNC-Chapel Hill, and after graduating this past May, they had set out to make their concept a reality. They had spent the summer promoting their startup and raising money from friends, family, and passionate supporters. They used the funds for their trip to Kenya, where they planned to document every stop along the way—and identify their first “CityForge villages.” And, for reasons that remained unclear to Peyton, the two boys had made a

A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of ‘exit.

An accurate budget must be built on a base of thorough research. You must do research on your community to find out what it will cost to get a church off the ground. You need to solidly answer questions such as:, What will the cost of living in this community be?, What will my salary be? How about salaries for additional staff?, How much will it cost to rent space for the church to meet in?, How much will it cost to operate a business in this city (office rent, phones, computer equipment, copy equipment, and so on)? Talk with other pastors in the community. Find out what their start-up costs were and what they are currently spending to maintain and operate the church. Other pastors can be a valuable resource for you on many levels. The worst mistake you can make is to start the budget process by viewing economic realities through a rose-colored lens. If you speculate too much or cut corners in this area, you’ll end up paying dearly down the road. Remember, God never intended for you to go it alone. There are people and resources out there to help you prepare. Ask others for help. God receives no glory when you are scraping the bottom to do His work. So don’t think too small. Church planting is an all or nothing venture. You can’t just partially commit. You have to fully commit, and often that means with your wallet. Don’t underestimate the importance of having a base of prayer partners. You need prayers as desperately as you need money. You need prayers as desperately as you need money. An unhealthy launch may occur when a new church begins as the result of a church split, when a planter is disobedient in following God, or when there is a lack of funding or solid strategy. Finding the right teammates to help you on this journey is serious business. The people you bring on to your staff will either propel you down the road toward fulfilling the vision for your church or serve as speed bumps along the way. You should never be afraid to ask potential staff members to join you—even if it means a salary cut, a drastic position change or a significant new challenge for them. When you ask someone to join your staff, you are not asking that person to make a sacrifice. (If you have that mentality, you need to work to change it.) Instead, you are offering that person the opportunity of a lifetime. There are three things that every new church must have before it can be a real church: (1) a lead pastor, (2) a start date, and (3) a worship leader. Hire a person at the part-time level before bringing him or her on full time. When hiring a new staff person, make sure he or she possesses the three C's: Character, Chemistry & Competency Hiring staff precedes growth, not vice versa. Hire slow, fire fast. Never hire staff when you can find a volunteer. Launch as publicly as possible, with as many people as possible. There are two things you are looking for in a start date: (1) a date on which you have the potential to reach as many people as possible, and (2) a date that precedes a period of time in which people, in general, are unlikely to be traveling out of town. You need steppingstones to get you from where you are to your launch date. Monthly services are real services that you begin holding three to six months prior to your launch date. They are the absolute best strategic precursor to your launch. Monthly services give you the invaluable opportunity to test-drive your systems, your staff and, to an extent, even your service style. At the same time, you are doing real ministry with the people in attendance. These services should mirror as closely as possible what your service will look like on the launch date. Let your target demographic group be the strongest deciding factor in settling on a location: Hotel ballrooms, Movie theaters, Comedy clubs, Public-school auditoriums, Performing-arts theaters, Available church meeting spaces, College auditoriums, Corporate conference space.

A good portfolio manager knows which companies to keep and which ones to let go. Many a GP has struggled with portfolio companies that cannot meet their value-creation milestones, or raise additional follow-on rounds of capital, or generate target returns in a time span of, say, five to seven years. The faster you recognize those losses, the better it is.” - “As David Cowan says, “Just focus on your top five—the rest is distraction.” The harder part of the investor's discipline is to know when to quit.” - “You have to constantly scan all of those things and be willing to adjust your own sense of what's a reasonable outcome and move the company into a position where it has the maximum chance to succeed. ” - “Time is your enemy: Portfolio companies always take twice as much capital and twice as long to exit. Early-stage companies rarely meet milestones as planned and always burn cash faster than anticipated.

Amidst all the hype and hoopla around this business, I wanted to emphasize the challenge—it is seductive but the failure rate is very high. And those who fail have no good place to go.

This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments.

A product that sells in a local store cannot be part of the core offering in the mall or online. This

A product that sells in a local store cannot be part of the core offering in the mall or online.

The power law means that differences between companies will dwarf the differences in roles inside companies. You could have 100% of the equity if you fully fund your own venture, but if it fails you’ll have 100% of nothing. Owning just 0.01% of Google, by contrast, is incredibly valuable (more than $35 million as of this writing).

You begin with the Problem, or the need you’re addressing.  Then you proceed to the Solution, your product or service that fulfills the need.  The Market is the target customers to whom you will offer your solution.  Finally, Business is all about the ways you’re going to capture that market.

your initial team should be focused on building and selling your product.

What does one sale look like for your company? How much did it cost you to achieve that one sale? How did you scale that one sale to turn into many sales? This is what investors care about.

One of the things that I was taught in Business School is that the best jobs are never posted.

Traction is what separates a viable business from a really good idea. It’s what shows that your business can grow and sustain itself. It’s a way to show that a dollar invested into your business will always result in three dollars of revenue. It’s the proof that your business model isn’t based on assumptions, but on actual hard data.

Start selling to customers before you even have a product.