An excellent series of articles that highlight the basic problems in starting a tech company.
- Beware the easy money
- How to work with venture capitalists
- How to understand the relationship between the CEO and CTO
- How to staff your company, do product planning and avoid common cultural pitfalls.
Some noteworthy quotes:
The common mistake is to accept money based solely on a financial business plan, without a detailed technical development plan.
The best way to protect your venture is to plan in detail at least 80 percent of your core technology before you seek funding or expand the business side
But remember that most prototypes and nearly all designs can be developed with (lots of) sweat equity from a small group of individuals and a post office box. The fewer people involved, the better; if you can’t find or motivate this core group, you should think twice about your ability to attract the creative minds you’ll need later to build your
To understand VCs is to understand their motivation, which is no more and no less than to maximize their return while reducing their financial risk…Even if its motives are obscured by initial glad-handing or an idealistic prospectus, never mistake a VC firm for a charitable foundation
You should never take VC money before you have the vast majority of your company’s technology core well planned—if possible, prototyped—and have a clear, long-term strategy for financing your company…Adequate, documented planning on your side, by contrast, shows that you have a clear idea of how the company will grow, and will leave you less vulnerable during negotiations.
Remember that what you promise is not as important as delivering on that promise. Competent VCs are not looking for phenomenal results up-front: they are looking for a predictable and disciplined company, which means a company that doesn’t miss its deliverables.
a small company need not and should not settle for small-time board members. Executives from highly esteemed companies will gladly agree to serve on a well-run and interesting start-up’s board, for free or for a few stock options.