Should founders get Stock Options?

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Founders often ask me whether they should be asking for stock options in their own company. Some of them feel sheepish for asking. Some feel entitled. There’s no one right way to think about founder incentive compensation, but here’s how I have approached it over the years.

The Early Days

Anyone can start a company. And in the beginning, what you have is not even a company yet. I see startups having three distinct phases: Continue reading Should founders get Stock Options?

Is your Revenue Model accurate?

We specialize in 3 sectors at SurePath: SaaS, E-Commerce and Marketplaces. The commonality across these segments is that they are all data-driven. Companies in these segments have lots of knobs and levers that they can twist and turn to optimize and grow. 

In this post, I’d like to show you the first of three simple tests to ensure that your SaaS Pro Forma Model is solid. I’ll do the same thing for E-com and Marketplace businesses in future posts.

Test #1: Your Historical Funnel

It’s pretty easy to forecast expenses. The magic is forecasting revenue. If your SaaS business targets SMB, then you likely generate new revenue through a large marketing/ freemium funnel. If you run an enterprise SaaS business then you probably grow new revenue through an inside sales machine. Continue reading Is your Revenue Model accurate?

3 traits of a great financial model

Founders and non financial people in general usually hate building financial forecasts. But, every startup needs one. You need one in order to raise capital. You need one every year thereafter to present to your board.

For me, financial models are very powerful. The numbers in them are rarely right. It’s not like you need to hit the revenue target that you set for 36 months out. But, the thinking into how your business works, how you grow users, revenue and staff is invaluable.

Continue reading 3 traits of a great financial model

Getting Due Diligence Ready

We’re getting into that time of the year where VCs stereotypically head for their yachts. From where I stand, there’s still a ton of deal activity, but late July and definitely August are still not great times to begin new funding discussions. So, now’s the perfect time to get your ship in order so you can start fundraising hard come Labour Day.

I’ve said this before, and I’ll say it again: the decision to give an entrepreneur cold hard cash is all about trust. I trust you to take my $1 and make it $5 or $10. One important datapoint in forming my trust thesis as an investor is how organized you and your company are. No matter what your company size, your key documents should be organized and readily available. And you should know what’s in them. Continue reading Getting Due Diligence Ready