Wednesday, January 28, 2009

Eight "Do's" For Entrepreneurs

I came across this short and to the point list of "Do's" for entrepreneurs -- it was compiled by Alexander Muse based on a presentation by Martin Plaehn, CEO of Bungee Labs. I agree heartily with its recommendations.

-- Do ensure for yourself (as founder or chief) that you are addressing a real market and a sustainable one; where the exchange of value is transacted and measured in US currency
-- Do only hire for pre-identified expertise, operating need, and the energy to accomplish excellence; if you get more, great; don’t hire otherwise
-- Do always know your cash level, weekly cash spend and receipt rates, cash-runs-out date, and close-up liabilities amounts; start finding funding choices when you hit t-minus 6 months till operating cash runs out
-- Do money deals with money people (e.g. Angels, VC’s, banks, and credit unions); do product deals with product people (eg. Commercial companies); and do risk deals with risk people (e.g. Insurance companies). Don’t get these confused. If a product company wants to invest in your company, can they afford to take the whole thing? If not, then not.
-- Do ensure that at least one of your early formal investors has the financial wherewithal to keep investing in subsequent increasing rounds many years down the road; do make sure your different investors are really compatible
-- Do always accumulate choice; two by definition, three of four is better; then make decisions and have a back-up
-- Do let the stress of overload and/or capacity strain the triggers for expansion; demand flexing the edges of the system is usually the truest sign of real growth
-- Do track revenue and cost per employee; have trigger thresholds for when to add staff or subtract. Human efficiency and innovation is what creates value

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Dividends and Preferences by Hank Heyming is licensed under a Creative Commons Attribution 3.0 United States License.