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I had a picture in the office of my first company with the logo above and the capital letters JFDI. (In I spent nearly a decade building software for large companies and then advising companies on the same. The technology team disagrees on direction and wants resolutions. He was stuck on capital raising.
In my own experience with technical startup founders, I still find it hard to name one who was also good, or even interested in financials or business operations. A mistake often made by new business owners due to the unfamiliar new workload is to ignore and lose existing relationships with outside advisors as well as team members.
For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.” He or she has worked at some very successful big technology or media companies and went to a great school.
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I still generally advise software startups to file a patent as a barrier to entry from competitors and to increase their valuation by investors, but every entrepreneur needs to understand the tradeoffs. That’s more than a lifetime in today’s technology. Patent offices can’t keep up with software technology.
We moved into the legal process and final duediligence in January and February of 2000. It quickly became impossible to raise venture capital. It isn’t even a story about raising venture capital or M&A. Push hard to set up the technicalreviews, the duediligence meetings, the reference calls – whatever.
There are many times when being overly capitalized before you’re ready is a negative. Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company). Availability of Capital. In these kinds of businesses I’m on the record as advising “ Ring the Freakin Cash Register.”
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