When Founders Leave

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They say that the co-founder relationship is like a marriage. Indeed, founders probably spend more of their waking hours together than with their spouses. So, it should come as no surprise, that just as many marriages fail, the same is true of founder relationships.

I have been part of many startups where one or more founders left (or was asked to leave). It was always disruptive when it was happening, but always better in the end.

The Founder Pre-Nup Continue reading When Founders Leave

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?

Fintech and Scale

blog-FinTechThe Money2020 show is happening this week in Las Vegas. I was there last year and it was huge. It’s even bigger this year with over 10,000 attendees. In much the same way as this event has huge scale, fintech companies must also achieve massive scale in order to be successful. It’s a go big or go home market.

The most obvious examples of this are the payments companies. Payments is a great business in the sense that once you’re in place, you just take a small cut on everything that passes over your rails. BUT, it requires huge scale in order to make money. Square is evidence of this. It had a loss of over $50M last quarter alone, despite having revenue of over $330M. 

If we stay on payments for a moment, Stripe is the favourite payments engine of every developer I know. They have raised $ 290M to date and are worth $5B. I have not seen their financials, but in 3 years they have gone from a valuation of $18M on their seed round to $ 4.9B on their series D. Clearly the market expects Stripe to be the next Paypal – a massive market leader in payments.

Direct to consumer startups also require huge capital. The consumer market is massive, but hard to reach at scale unless you have a viral product. So, if you’re looking to build a B2C market leader then you will need lots of capital to build your brand. Toronto’s Wealthsimple knows this and came out of the gate swinging with a $30M Series A round. This is massive for any market, but probably the largest Series A for an internet company in Canada. Continue reading Fintech and Scale

The end of bootstrapping

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Photos.com

I was talking with the founder of a very successful startup this week. His company has been around for almost 10 years. With over 100 people, it’s well on it’s way to being a market leader. They have achieved that success without raising a penny of outside capital. But that’s about to change.

For the first time ever, this company will be raising capital. The obvious question is why. He had several good reasons. Wanting to be the clear market leader was one. But a big driver is that his company competes with other well-funded companies for talent.

As he said, “talent is everything”. In the current environment, startups and large tech companies alike are fighting over the best talent like never before. Developer salaries are climbing. Benefits like free meals are becoming more and more commonplace.

How do you compete with companies that have all this funny money lying around? And with valuations being as high as they are now, selling shares in your company is relatively cheap. Continue reading The end of bootstrapping