Doug ErwinEDAWN

Kevin LyonGovernance Sciences Group

Craig MacyFennemore Craig

Kathie PriebeReno Angels, Sierra Angels

Kevin Lyons 2016

Representative Funded Startup DetailsInvestment

StageRepresentative Investors

Investment Round Amount

Typical Stage RevenueStatus

Valuation

Bootstrapping Founders $1k to Any Idea to Specifications (or Any)

Pre-product to Any

Any

Friends and Family

$25k Pre-Accelerators

$10k to $100k Specifications to Thing

Pre-revenue $100k to $1M

Pre-Seed Lead/Startup Angels, $125k Accelerators

$100k to $250k Thing to Product

ARR $1+ or Enterprise Beta Users

$1M to $5M

Seed (First) Micro VCs,Generalist Angel Groups

$500k to $1.5M Product to Business

ARR $10k to $100k+, clear path to $1M

$6M to $10M

Series A VCs $3M to $7M Business to Growth

ARR $1M+ $15M to $20M

• Minimum for outside funding is Specifications (“talk to 20 customers before any coding”)• Founders have to know that they are making something people want

Kevin Lyons 2016

What Do Startups Need To Do Next?

• No Idea• Why do you want to be an entrepreneur? (Its really hard…)

• Idea• Pretotyping: What are the specifics of something people really want?

• Specifications• Prototyping: Can I make the thing that people really want?

• Thing• Selling: Can I sell something to some customers?

• Product• Unit Sale Economics: Can I sell something profitably to customers?

• Business• Scaling: Can I sell the same thing profitably to many customers?

• Scalable Business• You made it! Now… can you grow even faster?

Kevin Lyons 2016

Startup Resources• General

• YC Resources (read all) https://www.ycombinator.com/resources/ • YC Startup Playbook http://playbook.samaltman.com/

• Traction/Growth• “the way to make your startup grow is to make something that users really love, and

then tell them about it” – Paul Graham• Show that you can grow 5% to 7% a week

• Startup Basics• http://genius.com/Paul-graham-lecture-3-counterintuitive-parts-of-startups-and-how-t

o-have-ideas-annotated

• Full Overview (YC Curriculum for CS183B)• http://genius.com/albums/Sam-altman/How-to-start-a-startup-cs183b

• Read a Classic• http://web.stanford.edu/group/e145/cgi-bin/winter/drupal/upload/handouts/Four_Ste

ps.pdf

• Your Story• http://bryce.vc/post/4085241146/the-anatomy-of-a-y-combinator-demo-day-pitch

Kevin Lyons 2016

Startup Investing Made Simple• A startup is either

• Figuring out what people want• Figuring out how to make what it knows people really want• Making and selling something people really want• Wasting everyone’s time

• Making something people may or may not want

• The core startup evaluation• Will they figure out what people really want? (Team)• Will they be able to make what they know people want? (Team)• Will they be able to profitably make and sell what people want?

(Business Model/Traction)• Will there be lots of people who (will) want it? (Raving

Customers/Market Size)

Kevin Lyons 2016

Simple Startup Investability Scorecard

• Use probabilities to score 1-7 from “No way” to “Already Have”

• Will they be able to figure out something people really want?• No Way, Very Unlikely, Unlikely, Maybe, Likely, Very Likely, Already Have

• Will they be able to make what people really want?• No Way, Very Unlikely, Unlikely, Maybe, Likely, Very Likely, Already Have

• Will they be able to sell what people want?• No Way, Very Unlikely, Unlikely, Maybe, Likely, Very Likely, Already Have

• Will they be able to profitably sell what people want?• No Way, Very Unlikely, Unlikely, Maybe, Likely, Very Likely, Already Have

• Will they be able to profitably sell lots of what people want?• No Way, Very Unlikely, Unlikely, Maybe, Likely, Very Likely, Already Have

Kevin Lyons 2016

Resources• Core

• “How to be an angel investor” (2009) http://www.paulgraham.com/angelinvesting.html• “How to be an angel investor, Part 2” (2009) http://venturehacks.com/articles/angel • “How to be an angel investor, Part 3” (2014) http://venturehacks.com/articles/angel-3 • Sam Altman (YC) Podcast: http://www.econtalk.org/archives/2014/07/sam_altman_on_s.html

• Questions to Ask• http://techcrunch.com/2012/04/27/be-concise-the-top-questions-asked-at-a-y-combinator-intervie

w/

• Financing• SAAS Valuation http://codingvc.com/an-algorithm-for-seed-round-valuations • General Startup Valuation http://codingvc.com/how-do-investors-value-pre-revenue-companies • Terms http://www.feld.com/archives/2008/06/revisiting-the-term-sheet.html

• Product/Market Fit Metrics• Zero to Traction http://andrewchen.co/zero-to-productmarket-fit-presentation/

• Team• http://www.businessinsider.com/how-naval-ravikant-decides-what-to-invest-in-2015-8

• Comps• SaaS Comps http://www.forentrepreneurs.com/2015-infographic/ • Saas Details http://www.forentrepreneurs.com/2015-saas-survey-part-1/ and part 2

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