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In the early 1990s, my brother was working for a company that was going through the roof selling shareware software via catalog. David sold his recording equipment for $50,000 and they borrowed the rest of their seedmoney from a bank. says HourlyNerd co-founder and co-CEO, Rob Biederman. “So David’s advice.
Did I mention it only took the founder a month? More and more of our best and brightest are learning to code and/or joining the ranks of innovative startup companies instead of working for banks and consulting firms. Most founders that get funded know their backers or have close connections to them well before they officially "pitch.".
Drawing on advice from our own Tim Berry, founder of Palo Alto Software and Josh Cochrane, our VP of Product Development, I’ve broken down a few of the different options for entrepreneurs looking for feedback on their pitch. The three who agreed to do it had some semblance of a relationship with the founders beforehand.
In the last batch of startups we funded, we had several founders who said theyd thought of applying before, but werent sure and got jobs instead. We think of the techniques were developing for dealing with large numbers of startups as like software. Sometimes it literally is software, like. Now the only threshold is courage.
A few years ago it became fashionable for large VC’s to do seed funding. With open source software (LAMP stack) and cloud computing infrastructure it just wasn’t that expensive to get your company going and founders just wanted to raise less money. What gives? Am I a hypocrite? The contra is also true.
It says that selling an airplane ticket for $500 and getting paid a $5 fees by the airlines (1% gross margin) is not the same thing as selling $500 of software that you built (>90% gross margin). Most of this advice boils down to an argument in favor of basic planning before starting a company or raising money.
“I wouldn’t expect anyone except seed investors to complain about it,” Graham says. “Founders don’t think their problems are due to trends. And in fact, overall trends are a second-order effect for founders.” Sarah Lacy is the founder and editor-in-chief of PandoDaily.
One of the things I do as a founder of a later stage startup is to meet with early stage entrepreneurs to help them get their companies going. In later posts I’m going to get into more detail on specific topics like hiring, raising money, what types of ideas have the potential to get big, finding your founders, and the like.
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