Five Questions You Must Answer Today
Richard Rosenblatt CEO and Founder Demand Media
Q1.)
Why Are You Doing This ?
A. Because I am in love with this idea
What does this kind of passion look like ?
I’m passionate about lots of things…
Elements I focus on: • Consumer products that are made possible by the Internet • Models that leverage and exploit the network effect • Media models that can be reinvented • Opportunity to work with amazingly smart people • Ability to make money for my investors, teams, and friends
None of these are why I like to start companies
My passion is Self-Publishing
1994
2003
2007
Q2.) Do you have the best crew?
Your Crew is Bigger than You Think
Founders Executive Staff Board of Directors
Investors
Advisory Board Service Providers Functional Staff
Don’t settle on any of these groups; pick the best
Q3.) Who Will You Take Money From ?
Anyone
It Really Pays To Think This Through
Savings Account Friends & Family Angels Distinguishing Characteristics
Compatibility
Sector experience Temperament Explicit Value Fund position
Early Stage VC
Venture Debt Strategic Partner Later Stage VC Private Equity
Q4.) What is Plan B for Your Company?
Things Rarely Go According to Plan
Many start-ups have to run a broken play
Program in “Optionality”
• Know “what else” this could become • Always be testing alternative things
– Business models; segments; product offerings
• Let passionate staffers pursue their pet ideas • Good place to use partners • Killing these off is OK too…
Q5.)
What Outcome Do You Want ?
A.) The right one
Go big or go home.
Rosenblatt Demand Media (Outcome TBD) $355m PE raise
Get what the market gives you.
Panos
Pluck ($70mm) $17m VC raise
King of my hill.
Colbeck HillClimb Media ($10mm) $300k bootstrap
Many Factors Will Play A Role in the Answer
• • • • • • Timing Size of the idea Financial partners Quality of the team Stamina Your spouse
Be honest – and organize accordingly
Let’s Review the Test
• Why are you doing this? • Do you have the best crew? • Who would you take money from? • What is Plan B for your company? • What outcome do you want?