Co-founder // CEO at Shopin, CEO & founder StartupHat, Springleap, co-founder Evly (acquired). Designer of 16 mobile handsets (acquired). Angel investor and advisor at multiple startups. Passionate about startups and working with amazing people to solve big problems in a scalable way, especially crowdsourcing and marketplaces. I advise on raising angel/seed/vc fundraising in the US, EU and African markets, crowdsourcing, community, marketplaces, marketing, strategy, and crowdfunding. Achievements: 1. won Techstars Pitchnite 2. won Alleyboost Investor Pitchnite 3. won the United Nations World Summit Award for most innovative ebusiness, 4. was listed in Fast Company most innovative companies, 5. winner of Mentorcamp Canada and 2nd place at the Innovation 100 awards in California - beating Apple, Zazzle, eBay, Zappos and all our competitors. I'm here to help. Looking forward to connecting.
Shopstyle has a ton of this. Millions of skus - however, you need to set up your own key identifiers to really make it rock.
For Passo, we built an engine to normalize the data by working with nearly 30 stylists to set our key identifiers
1. When you have the luxury of choice: You chose the right angel based on:
1.1. Culture and personality fit. Do they trust you? Do you trust them?
1.2. Do they have a network of funders, mentors and business relationships they can and will open to you?
1.3. Are they experienced investors? Better if they are as they will understand how a business is built and that it takes time. The course is NEVER straight nor smooth
2. To ask for capital, you start by laying out the goals. Generally you raise 18 months of funding. Figure out what you need to accomplish to take you to profitability/ the next raise. Reverse engineer toward those goals. Create a budget. Add 25% fat.
2.1. Once you have a budget you will know how much you actually need to ask for
2.2. Set a valuation/ valuation cap
2.3. You NEVER let an angel set your goals or execution plan. You set it, stand by it and execute. Investors invest in the team that executes on the team vision.
2.4. You pivot when the MVP hits tests and the market resists, not on an opinion unless that opinion is ENTIRELY convincing. Don't confuse capital with control nor insight.
3. Good ones execute to plan, inform the investors every month with a simple financial and business update + asks
There shouldn't be any "magic" to this. It's stock standard:
1. Set the conversion cap
2. Give them follow on rights should you need another round (you never know)
3. No anti-dillution
4. No liquidation multiple, just preference
5. 7% interest rate
That's as fair as fair can be. Don't reinvent the wheel.
Also consider a YC safe note. Downloadable and usable straight out the box.
I would make the contract relevant in the country wherein the the company is incorporated. It will allow you to use the same legal team to resolve any of the issues. You should also only be using one of the "big 5" firms: Greenberg, Cooley, Sonsini, Gunderson etc. They usually have representative offices in most of these countries and you get the efficiency of keeping everything under one roof.
There are many other efficiencies of using these large firms that already service most VCs, funds, startups. They understand the ecosystem, work well together and can give way to strategic business introductions (investment, partnership, acquisition).
I currently own a small but very successful digital eCommerce agency that design, build, support and market enterprise eCommerce sites.
My idea is to launch a separate eCommerce agency entirely focused on an eCommerce market that is more towards eCommerce SMB's. I have been trying to figure out how I can use my experience and knowledge to find a hungry young co-founder that would like to start up the company. I finally found that person who I've known for some time, he's been freelancing for several years and only making $40k a year. He isn't as experienced as myself, but with guidance and mentoring I believe he can grow into a great leader.
Ultimately, I'm trying to figure out how I can eventually move away from being an active partner and into more of an advisory role once the company is profitable. I'd like this to be a separate company I start-up and is run by our team. I feel like I can set up this agency to grow with the team around it, as I have an idea to find ANOTHER co-founder who will be responsible for business development, this way we have two active partners working in the company who have more of an invested interest in the companies success.
How am I contributing to the company?
I'm bringing all my experience to the table and implementing this into the agency, which is the advantage I bring to the business.
Here are a few details about my experience and INITIAL involvement with this startup agency:
- Business Development (This would eventually be replaced with a full-time employee once the business has positive cash flow)
- Strategic Partnerships
- Process Implementation
- SOPS Setup
- Pricing Strategy
- Marketing Strategy
My co-founders responsibility:
- Sales initially
- Project Management once we have projects rolling in
- Web development initially until we grow to be able to bring on a full-time hire
- Payables & Receivables
1.) What type of partnership role should I be considering for myself?
I would think about this: How critical are you to the other founder? If massively so, and you need to work there one day of the week - it's a big distraction to the current business.
I think you should try this calculator out. It can help to keep a clear head: http://foundrs.com/
Also - make sure your partners/ stakeholders at the existing business are happy with you opening another business and diluting your focus. From a founder to another founder: we both know it's ALWAYS more work and stress than you expect.
2.) Should I be getting a salary if I'm not actively involved in the business after year 1/2?
I would say no unless you're materially contributing to the success and growth of the business regularly. Rather look to a dividend structure of some sort. It's not unusual once the company is really doing well that advisors are regularly rewarded in cash or equity. That's normally the case in a VERY mature business.
3.) How should I be setting my schedule to contribute to the company from advisor role?
Depends on how much lift the founder and business needs. Obviously year 1 and 2 will be a lot of work, and you definitely don't want a "waterfall" experience of suddenly walking in one day and seeing everything has veered off track substantially.
Either allocate 1-2 hours each day at the same time everyday or 1 day of the week which is the least intense day at your existing business.
4.) How should the partnership ownership be split, considering my future involvement in the company?
Use the calculator I gave you ;)
5.) Any tips on negotiating the partnership so that its fair?
The calculator! Also - incentives on milestones. If they build a really big pie, every slice, slightly smaller or larger will be sweeter for it. Make sure they're rewarded to build out that pie.
First off: Well done! You're over 1000 paying subscribers. That's not easy and a good metric to reach.
Having said that - everything depends on your vertical, lifetime value of the customer, cost of customer acquisition, network effect etc.
Should this all bear out well - there are a number of amazing funds:
2. Axel Springer
3. Point-Nine Capital
5. Accel Partners
6. DN Capital
7. Index Ventures
8. Hasso Plattner
There are a bunch more I'm familiar with. It has to do with matching your requirements and stage to their mandate.
Hit me up privately if you would like to discuss.
Firstly investigate if there is anything trademarked or patentable (I doubt the latter due to court cases like Alice killing off a huge amount of business process patents).
Just don't do anything completely stupid like steal any copy from the site and repost it.
The fact is that there is no end to situations similar to yours. Just because someone is there first, doesn't mean you can't do the same thing - even in most cases exactly the same thing.
In fact, you're in a better position bearing no legacy and not having to pay the heavy price of educating the market on the value of the offering. You just have to innovate within it, or market better, or expand the market.
I would look to see what stage you're at as a start.
I've ben through this many times.
1. First study the VC and the partner
2. See what else he has invested in
3. They may be looking to round up their vertical with something similar or to acquire smaller players. If you're not a competitor, then anything is game.
4. Study when they invest and how
1. Set up the call.
2. Start the call by letting them talk a lot first. Ask: What is your mandate, sector? What do you invest in? What stage? What do you look for? What is the typical investment size? Where (geographically) do you invest?
This will tell you a lot about why they are reaching out and what you should say after.
Hit me up privately if you would like to discuss more, and good luck!!!
With limited information provided here (would need to know more detail truly):
It's actually very common to run a campaign twice if the initial campaign was very successful and demand continues.
More often one repeats because:
1. The first campaign was not successful for a variety of reasons (bad perks/ compensation structures / poor pitch or video assets)
2. The fist campaign was immensely successful and you're releasing a new product based on the success of the first campaign (many for Li's have done this such as Chargetech)
Where I hesitate to say yes, is where the campaign was somewhat successful but not capable of shipping a product (hence you need more capital). You can try, but my sense is that in this scenario you failed to ship/ execute and backers will be wary.
This is one of the core reasons agencies are a service-centric model vs product-centric: quick to monetize and a function of human labor/ effort to scale (unlike products that are usually slower to monetize, require high initial investment but scale really well).
So the answer is either you need to outsource sales and lead generation to an external firm, use a platform like Clozer or inhouse the sales folk. When inhousing sales: #1 recommendation: don't make the sales people find their own leads. They hate that. You need a lead generator (could be outsourced) and a sales person.
The leadgen should be supplemented with inbound marketing for the best effect. The function of a dedicated "leadgen" person is set up meetings and should be rewarded on successful meetings.
First thing you ask the sales person: WHERE'S YOUR BOOK? ie:who are you going to bring with you today (clients) that we can close quick based on existing relationships.
Good sales teams and systems are costly - so chose a path that monetizes quick.