what's a good startup ? - founder and investor point of view

What’s a good startup?

Investor and Founder point of view

Jeremie Berrebi (@jberrebi)November 2014

www.berrebi.org

About JeremieBorn in Paris, Jeremie Berrebi is one of the most famous French entrepreneurs in the high tech industry who began his carrier as a journalist for ZDNet and founded, or cofounded, 11 companies to date.

Since 2010, Jeremie is considered the most active angel investor in the world. Having invested directly, or indirectly via Kima Ventures, in more than 300 companies in 25 countries. He’s still investing 1 to 3 companies a week all over the world.

Jeremie was voted the ‘Best Seed/Angel Investor’ in Europe in 2014 at The Europas.Jeremie has already sold companies to Google, OpenTable, LinkedIn, OutBrain, Jive Software, Incomm, ShareThis, Naspers, Fotolia, TNS etc…

Jeremie Berrebi is living in Bnei Brak, the main Jewish Orthodox city in Israel and part of the Charedi Community.

Having a real and big vision/story

Be passionate about a VERY LONG (5 to 10 years) journey

more than the money

FORGET ABOUT EXITS!

Find an idea related to a passion you love and

that helps a lot of people

Answer a very big need that you have yourself!

“I find out what the world needs, then I proceed to invent.”Thomas Edison

Think and talk about benefits for your

customers, not features

Execution is Key

Idea => 5%

Make an Awesome Product

Think about a potential Business Model (Acquisition

Cost<Potential Revenues) with potential for very big and fast

growth

Build the right team• Find the right cofounders you already know well

• Define exactly what’s the role of each one.

• Write a Cofounder agreement.

• Begin with a test period

• Build a Killer, Experienced and Passionate Team who shares your vision. (Don’t hire robots)

Create Barriers to Entry

Ready?

Multiple types of startups

• If you’re launching an app or software

• If you’re building a new complicated technology

• If you’re building a hardware company/IoT

If you’re launching an app or software

Bootstrap as much as you can

• No paid office to begin

• Be a coder yourself! and use Freelancers for difficult tasks (Odesk) Avoid employing people!

• Build a Minimum Viable Product (MVP) => Remove as many features as possible

• All productivity tools are now free (Google Docs, Skype)… You just need a computer!

• Most of big companies have a Startup Program (SVB, ZenDesk, Amazon, Google, RackSpace etc…)

It’s taking a lot of time to find the real product fit

• Don’t raise money too early

• Iterate, iterate and iterate

• Measure and write down your 3 KPIs (including RETENTION) every DAY!

But what if I’m really working on building a

new technology?

New Tech Financing• Build an awesome cofounding team+top Advisory

Board

• Find potential awesome employees ready to jump

• Try to build and show an awesome prototype

• Show your experience and expertise in the current field

• Raise enough money to launch your product in the market.

What about a hardware/IoT company?

Hardware company• Build a team who have already built hardware

• Develop a prototype

• Find potential customers/channels ready to pre-order

• Launch your product on Kickstarter and Indiegogo

• Raise at least $1M after your successful campaign. Hardware is hard & expensive

Raising Money

When do I need to raise money?

• When you’ve found that you’re answering a real need with a real product (and resolve retention problems)

• When you want to push the accelerator in ONE direction

• When you need more people to serve your customers.

When do I need to NOT raise money?

• When you’re still iterating, iterating, iterating…

• When you still don’t know what your company will look like in 1 year

• When you have no very satisfied customers…

• When you need to raise only because you need a salary

What is an investor checking before investing in a company?• How nice is your deck? How big and clear is your vision?

• Are you answering to a real need? => Are potential customers and users waiting for you?

• Do you know how to promote/sell the product? (Potential chicken and egg problems) How much money do you need?

• How innovative is the technology?

• What’s the entry barrier?

• Did I find the right and best team to make this company big?

• How many months of runway will the company have with the current investment? What will be their status after all these months?

• How do you plan to use the money raised? (big salaries, great sofas, big office, hiring an expensive sales guy, lots of travel…)

Don’t lie to your investors before or after a round!

NEVER!

Consider your investors’ money as yours

Update your investors with 3 to 5 lines every week

They will be your best ambassadors

– Jeremie Berrebi (@jberrebi)www.berrebi.org

Good luck!

Thanks to Michel Sassano & Vincent Jacobs for their comments