Group items tagged

Khosla wasn’t trying to defame Y Combinator, noting “There’s plenty of smart teams out of YC that we fund.” But he stressed that heavily prepared presentations can backfire. “Too much of the polish of the five slide deck” distracts a team and can repel mentors like him. For a startup that believes it has a great idea, the next thing they need is great execution, and that requires an all-star team and savvy strategy — elements that the right angel or VC firm can offer. A pumped-up valuation might help the founders retain more equity, but that doesn’t matter without success.

If your idea is risky, but with a huge upside that isn’t valued too high, you can gain the support of people like Vinod and his Khosla Ventures. ”I spend most of my time recruiting for my companies. Once you hire the wrong people… it’s really hard to get a company back on track.”

Produce quality financial projections for your business, without your own in-house finance team.

Let's say that you've built up, from essentially nothing, enough of a presence in your industry that you're selling $10 million a year of SaaS. That's only 10k accounts at a blended average of $100 a month -- far less if, like many SaaS companies, you make a significant whack of your money on custom enterprise deals that are not on the pricing page.

Now consider this company from the perspective of a Fortune 500 like, say, Intuit:1) They have software which exists.2) Their software creates clear value for customers. They have 10,000 people signing their praises and case studies up the wazoo. We know people will pay $100 a month for it -- we have copious, audited financial statements that prove that.

3) Oh yeah, we're a Fortune 500 company. Launching a new product costs us $250 million and we could fail to produce something that both achieves technical success and produces any value for anyone anywhere. Assuming we do, selling to our built-in base of hundreds of thousands of customers is what we do best.Intuit can totally justify spending, say, $300 million to buy $20 million a year of revenue and the opportunity to 20x that by selling it to everyone who has ever heard of Quickbooks. Or mid 8 figures for something which has, say, a million a year in revenue.