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Venture Capitalism: Startup Lessons

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					Startup Lessons Everyone Should Read
by Ben Yoskovitz

Here’s a sampling of some great startup lessons worth reading about.

   1. Your Pitch Sucks. Patrick Lor lays it on the line very succinctly with his post
      about bad VC pitches. He must have seem some really awful pitches, cause he’s
      normally quite a “nice guy” blogger. Regardless, every point he makes is correct;
      they’re not easy lessons to learn necessarily, but he’s right. For some further
      advice on pitching VCs, I’ve written a couple posts: 5 Quick Tips on Pitching
      Angel Investors and Venture Capitalists and 5 Lessons Learned from Pitching
      VCs.

   sd

   2. Does Revenue Matter? Mark MacLeod asks this question in one of his recent
      posts at StartupCFO, and if you’re running a startup, or thinking about it, you
      should absolutely read this. Every startup struggles with issues of revenue, and
      many startups (especially in the consumer Web 2.0 space) don’t focus nearly
      enough on it. Mark makes some key points about the difficulty of raising capital
      without a credible business model or revenue traction. But equally, he describes
      the fact that most acquisitions aren’t made based simply on a multiple of revenue.
      So how important is revenue? And how quickly should you focus on generating
      revenue, and then scaling it from there? Great questions…



   3. What Not To Do. Here’s a list of 17 mistakes commonly made by startups
      (written originally by John Osher). The first two mistakes listed are “Failing to
      spend enough time researching the business idea to see if it’s viable” and
      “Miscalculating market size, timing, ease of entry and potential market share”. I
      would argue that in the Web 2.0 startup world, most startups barely make any
      attempt to figure out if their idea is viable and then look at the market size. Web
      2.0 startups are moving and launching too quickly for that, right? I don’t think we
      need to bring back the era of 40-page business plans, but completely ignoring
      these kinds of issues before jumping into your startup is just asking for it.

Re-reading these posts, it’s clear they definitely have a negative bent to them (at least the
first and third), but that’s in no way representative of how I’m feeling. Nevertheless, it’s
worthwhile to be the recipient of some straight, honest talk from time to time and really
learn from the experience and failings of others.

				
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posted:12/4/2009
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