Startup Entrepreneur Boot Camp Event (JHTC)

I attended an event hosted by the JHTC in Mountain View. The event was “Startup Entrepreneur Boot Camp” with some very interesting speakers (the full list is at the bottom). The event brought together a panel of well-versed individuals to talk about startups. This is a summary of some of the points that were brought up by the panelists mentioned at the bottom of the post.

From the wealth of expertise concentrated in this panel, I’ve found out that everything boils down to the vision of the founders(s) and the alignment with investors. A bootstrapped company is not the same as VC driven company but both have their own set of issues and advantages.

Entrepreneurs need to think about the market where they are and the flexibility that the market grants to the idea. Keep in mind that the idea that you startup with might look very different from the idea that is implemented but you have to look at the opportunity cost for you and the VC or any other type of investor. Some times these two can be deeply at odds but more often than not they are complimentary. A theme that emerged during the conversation is the stark contrast of what motivates VCs and what motivates founders.

The VC in the panel talked about making you rich while the founders in the panel talked more about value and later finding the right pay day for their company. If both goals can be taken into consideration while building a company then a good balance can be achieved and a successful exit might be at bay. However, if one side pushes harder than the other, then lots of problems start to arise. As one of the panelists said, balance is a tricky thing to achieve.

• From idea to startup
• Lots of mistakes at the beginning
• Get prototype before funding
• If business requires a lot of education then you are ahead of the curve but might want to reconsider positioning due to funding at the offset. Maybe wait for the education to catch up

Top things to know about a startup

• Thick skin
• Dogged execution
• Focus on one thing and simplify everything

Bipul Sinha:

We are not afraid of pre-revenue companies but we look for focused teams. Lots of focus, attacking a large market with serious IP.

Glep Budman:

Backblaze.com a bootstrapped company because some startups that need high level funding need to grow quickly and need to burn through cash before getting to revenue. A VC funded company requires you to put money in the problem. A bootstrapped company is about solving a problem efficiently. More and more today a startup does not need to be funded in the millions. In today’s market it is much easier to go to market without the need for serious VC capital.

How do you pick the initial team? At the beginning it was about the good idea but with time I realized that no one wants a good idea. The single most important thing around the startup is the “HR” portion. Alignment, trust and compliment between the partners is key. Alignment in terms of exit strategy, commitment level and collaboration style.

Companies don’t die because the idea is bad but because the people get tired or the company runs out of money.

Ted Hollifield:

What is the advice you give to a startup starting out?

• See a lawyer immediately and not again until you are ready to do a big transaction. Avoid the giant fox of half finished agreements for the long run
• Successful startups tend to be easy. You are there to ride waves to not chase them
• One of the biggest challenges is balance but be able to change what you are doing. Achieving that balance is tricky
• Startup 1: Diapers.com is a simple idea and the fastest growing internet retailer. Simple and good
• Startup 2: Fundamental misalignment between investors and founders can bring a company down easily
• Startup 3: A startup refocuses after failure while losing 200 Million

A formula for incorporation:

• C Corporation in Delaware.
• Seed money
• Institutional rounds through a preferred stock in the company. Generally no more than 4 rounds of funding before exiting
• Patent protection comes down to knowing your industry and learning how valuable they are to your business. For instance, if you are doing a web 2.0 company then you wouldn’t be talking to a patent attorney any time soon

Speakers:

• Greg Mathis (panel moderator) is a senior attorney in the Corporate practice at Dorsey Whitney LLP with over 12 years’ experience working with Silicon Valley startups, investors and venture capitalists.
• Ted Hollifield specializes in corporate and securities law with an emphasis on public equity and debt offerings, venture capital financings and M&A for emerging growth companies.
• Bruce Entin most recently was Chairman and CEO of chip startup Siliquent Technologies, Inc., which was sold to Broadcom.
• Robert Sears is founder and CEO of Red Giant, a consumer payments startup, and a serial entrepreneur–Red Giant is the third company he has founded.
• Gleb Budman is CEO and Co-Founder of Backblaze, a secure online backup service
• Bipul Sinha is a Venture Capitalist at Blumberg Capital and focuses on investments in Digital/Social Media, Internet, SaaS, Technology Enabled Services and Mobile Computing.

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