Service Breakdown: The Case of Nordstrom
Pay as you go Health IT

Funding a Startup

I dropped a note to an associate of mine telling him we were closing our Series A (it's the seed round).   And he asked how did we do it.

That got me to thinking about what the key factors where. This of course assumes you've got all the fundamentals down: product, market, barriers to entry, cash flow break-even analysis and management.

1) Find people who are as passionate as you, are thought leaders and are willing to put their own money in.   No one wants to be first.  They all ask "if this is so good, why am I the first?" .  This is key.

2) Show significant progress while you're talking to investors.   This can be a 3-6 month process easily.  During that time, can you show more development, more customer interest?   I've said this before, but execution is the new strategy.  

3) Be generous.  In your business plan, be generous to your customers and their customers.  Be generous to your investors.   And I mean real generous.   Founders are their own worse enemies.   They want control, they want to minimize dilutions (they're sitting at home playing with spreadsheets and PowerPoints as we speak).   The only good idea is one that is used.   By the time a liquidity event happens, the vast majority of founders end up with 8-15% of the company.  So why are you fighting to have 60%.   You don't ever get to keep it.   Show your investors how they get 1,000% ROI in 4 years with very low sales numbers.  Set that bar so low you can fall over it and make it.

4) Be at the right place at the right time with the right people.  


patrick foster

Congratulations - well done.

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