Jun
20
Google has only ever offered a toolbar to see your pagerank. Top 25 Web has created a page that returns your pagerank. I think they just released it last month.
Jun
20
Do’s and Don’ts with Venture Capitalists – Dave McGinn – CFO Agilix Labs, Inc.
Filed Under Business Ideas, Resources, Principles, etc.
Do’s
- Do 1: Good presentation that addresses
- Market Risk – The TAM (Total Addressable Market) should be at least 1 billion for VCs to pay any attention to you.
- Product Risk – Why your product has the qualities to capture the market share you claim it will.
- Execution Risk – Why your team can execute.
- Financial Risk – That’s what the VCs are for.
- Do 2: Have firm grasp on valuation
- DCF – discounted cash flows
- Training 12 month revenue – In technology, 1 million revenue trail makes the company worth 3-5 million.
- Projected revenues 1-2X value.
- Acquisitions – In the same industry with similar characteristics and revenue capabilities.
- It’s best to ues a triangular approach to valuation – Use 3 of the possibilities.
- Do 3: Nail the revenue! Understand your business projections because your reputation is on the line. You have to deliver or you lose credibility.
- Do 4: Smart Money – If I win, who else wins? Go for money from the companies that will benefit as you are successful.
- Do 5: VCs have two motives (Greed and Fear) – Use one or both. Always work with more than one VC firm at the same time and let the other know that you have options.
Don’t’s and Common Mistakes
- Don’t resist managment changes. “If someone can make me money better than I can make me money, why should I complain?”
- Not understanding valuation. You don’t want to lose more than 20-30 percent on the 1st or 2nd round. – “Pigs get fat, but hogs get slaughtered”
- Not paying attention to the capital table. “If cash is King, equity is Queen.”
- Not growing/hiring the right team.
- Know when the founder should step down
- A players hire other A players and B players hires C and D players so that they aren’t challenged.
Jun
20
Ideal Capital Structure for $100 million dollar business
Filed Under Uncategorized
In the Entreprenuer class, they share the ideal capital structure for a large company.
20-30 percent for founders
20-30 percent for employees and seed capital investors
50 percent for 2nd to 5th rounds of funding (5 rounds ussually is bad)
However, in starting businesses, they suggested building incentives into the capital structure. For example, give founders and employees stock options that they can only buy if they perform at a certain level or stick with it for a certain amount of time. They talked about Phantom stock that only those who are with the company at the time of harvest can capitalize on it.
Jun
20
In Paul Allen and Rick Farr’s class yesterday, they discussed some of the characteristics and statistics of good businesses for bootstrapping.
- Growing Market (at least 10 percent annually)
- Note: of all businesses, 60 percent survive. In a market that isn’t growing, only 20 percent survive. In a market that is growing, 80 percent survive. It is simply harder to take customers from existing businesses than it is to find new customers.
- High Margins (for Internet and Software companies, a company can’t survive bootstrapping with lower than 60 percent margins).
- Customize your product for a few and charge a ton for it. Retain the rights and then rebrand it and sell it to a larger market.
Jun
20
Trisha and I have loved these Family Home Evening Activities suggestions published by The Church of Jesus Christ of Latter-Day Saints.
Jun
20
A Place to Put Ideas
Filed Under Ideas and Thoughts
So often I have fleeting ideas that come and go and then are gone for good. I foresee this as a place I can record those ideas as I have them. Then I can find them again, wherever I have a connection to the web.
Jun
20
Chris Jones, a friend of my brothers invited us to a presentation in Sandy where we learned about buying versus building. Chris is a Mortgage broker. I found it interesting that he was part of the dotcom craze before the finance business. So was my friend Nathan. All the dotcomers left the Internet and started into real estate? I guess the two industries really balance one another out. When the Internet is roaring, real estate is down and vice versa.
After an overview of the housing marketing and the Interest rates for 10 year bonds, Chris pitched a method for buying a house and beginning with 20-30 percent equity without a down payment! Sounds tooo good to be true. They claim that one can become their own general contracter, consult with B.I.Y.D.S. and five months later have more equity than most folks have after 10years on their 30 year mortgage.
The offer sounds very appealing. Especially after they gave case studies of folks who have done it and then sold their homes for 40-60 k profit. Well, the only catch is that you can’t finalize your long term loan until the house is built. It takes at least 5 months to build the home. Considering I’m quitting my job June 1, my chances for a decent loan will be very slim.
Jun
20
Found a nice place in Provo
Filed Under Utah Real Estate
Tim Whipple gave us a lead to a nice little home that has the capacity to rent to 4 single students from BYU. It could bring down the mortgage to less than our rent. We’re looking into it. We fear Provo’s rules about renting. Originally, I thought they just wanted Owner occupied homes. I’m coming to believe, from what I hear from others, that they don’t want people renting in the neighborhood at all. I don’t understand their line of thought. If they want clean neighborhoods, owner occupied should be sufficient. These laws seem very restrictive and make it difficult for new home buyers.
Jun
20
Alta Vista Homes
Filed Under Utah Real Estate
Trisha, Michael and I drove out past Lehi and visited Alta Vista’s model home near the ranches. The homes they build today are so well designed. The corners, floor plans, everything is designed to seem more spacious than it is. It was a beautiful home, but we felt like there are too many people out there for our test. We are country folk. But those new homes are so well designed.
While out there, I met with the developer, Dave, and his partner and told them about Utah Real Estate Help. They were very interested. I came away realizing that Utah contractors and developers have probably over built. They are having to compete in every way they can to win over not enough home buyers to fill the homes. Our website, is a perfect tool to help them and the buyers. I’m glad to be able to learn about this process, help connect buyers to developers, it’s a great opportunity. I think by the time we build this business, I’ll know the market well enough to make a good decision about buying a home.
Jun
20
For information specific to utah and the first time home buyer, look at
http://www.utahrealestatehelp.com
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