Discussion Topics

Pre-Seed Product Work In the early stages of the startup, before the product is designed and launched, there’s product management work to be done. Consider these points for the pre-seed stage product work: Focus on the problem the customer has. Understand it very well.  Don’t get your heart set on…

Product Management Best Practices Product management is an ongoing process of analyzing the market and monitoring customer needs. Here are some best practices for implementing product management at your startup: Focus on your customer and not your product. If every discussion with a customer starts with your product then you…

Product Experience Best Practices Product experience is the customer’s journey with the product from adoption to trial to ongoing usage.  This is separate from the customer experience which includes interactions with the company including buying the product, training, support, and more. The better the product experience, the better the overall…

Product Differentiation Features In product development, there are several types of features. These include basic requirements, nice to haves and differentiators. The basic requirements are table stakes.  All products in the space have those features and customers expect them to be there. These are must have features. Then there are…

Before Product Development Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. To ensure you are developing the right product for your target customer ask these questions first: What are you losing customers over? If customers choose another product…

Product Challenges There are many challenges in developing, launching and maintaining a product.  Here’s a list of challenges to consider: Choosing what product to build. Look for customers with unmet needs and build for them. Choosing your ideal customer. The ideal customer is the one you chose with unmet needs….

MVP Mistakes In starting a business there comes the time to build the minimum viable product. The most common mistake is planning a grand vision for the initial product. The MVP will be much smaller than the vision. MVPs often gather customer feedback on the usefulness of the product but…

Minimize the MVP Many founders brainstorm a grand vision for their product. While vision is a must have, realize you’ll need to start small. Raising too much funding early in the business will cost the founder unnecessary dilution. In building the MVP think minimum and not maximum. Keep the team…

What Is Product Management Product management drives the development, launch, and ongoing support of the product. Here’s a list of duties and responsibilities: Research the market and customers for the proposed product. Identify the customers’ key care abouts and pain points.  Size the potential market for the product.  Develop a…

Product Roadmap The product roadmap lays out the vision of the product at a high level. It shows where the product is going and what must be done at each stage. It’s a visionary goal to share with potential investors and customers. In building your product roadmap consider the following:…

Product Management Tools Product management requires many skills and tasks to complete. There are tools that help accomplish these tasks. Here’s a list of tools to consider: User tracking and analysis – there is embedded software that tracks and analyzes user behavior.  This tells you what part of the product…

Product Management Skills Product management requires several skills to succeed. Here’s a list of skills to consider: Communication skills — the product manager communicates verbally and in writing with prospective users, customers, developers, and management. This comes in the form of planning the product, gathering feedback on the current version,…

Product Management in the Launch The product manager plays a key role in the launch of the product. Before the launch the product manager prepares sales and marketing. This includes product training, competition analysis, and website content. The goal of the launch is to establish an initial set of customers…

How To Recover From a Bad Investment If you invest long enough you’ll make a bad investment. Here are some causes for a bad investment: Overpaying for the startup through too high a valuation. Making a snap decision on just a few factors such as the team or the market….

How To Manage Retaliation Retaliation is when a manager takes adverse actions against a whistleblower. This could be in the form of termination, reduction in salary or loss of benefits. Retaliation laws make it illegal for a manager to retaliate against an employee who blew the whistle. This includes potential,…

How To Keep Your Job After Whistleblowing Keeping your job after whistleblowing can be a challenge.  Consider these steps to protect yourself: Retain an attorney to advise on the legal ramifications. Keep notes about calls, meetings, actions, and any retaliations from managers. Keep a copy of your performance reviews, work…

Best Practices for Whistleblowers Many people have become whistleblowers. Here’s a list of best practices based on their experience: Find a lawyer before you become a whistleblower. Choose one carefully after proper research and one that works on a contingency basis. Maintain anonymity throughout the case and for as long…

What You Should Know About Whistleblowing Whistleblowers provide information to the authorities to help stop fraud. Here’s what you need to know about whistleblowing: There are multiple laws around whistleblowing so you should know the relevant laws for your situation. Whistleblowers are portrayed as downtrodden outcasts by the media which…

How To Report Fraud Fraud sometimes arises in the startup world. Here’s how to report fraud should it happen to you. If you discover fraud don’t pay any more money into it. Collect the relevant information and documents. This includes names of the suspected perpetrators and their contact details. Any…

How Do Whistleblower Laws Protect You Whistleblower laws protect those who report fraud, waste, and abuse to the authorities. Here’s a list of cases of protections provided to federal employees: Disclosures made to those engaging in bad acts. Employees motive for reporting the bad acts. Disclosures made while the employee…

Filing a Complaint With the SEC The Securities and Exchange Commission or SEC oversees the securities industry in the US. Here’s a list of sources of fraud related to securities: Ponzi and pyramid schemes in which funds collected from one investor are paid to another investor with no actual investment….

Claiming Whistleblower Status There are three Whistleblower programs, False Claims, SEC Whistleblower, and IRS Whistleblower. One can file multiple claims under each of the programs. One must file within a time limit of the act of fraud which in most cases is 10 years. Some IRS and SEC claims require…

Team by Stage of Funding At each stage of funding the startup will need a team to accomplish the goals. Here’s the team configuration at each stage: PreSeed – Founder and technical cofounder. The early-stage team needs someone building it and someone selling it. Seed — Founder and technical cofounder….

Success Rate by Stage of Funding The success rate of startups declines as one moves from seed to Series A and so forth. Success is defined as a successful exit for the investors through an acquisition of the company. Here’s the rate of success of startups at each stage of…

Primary Work by Stage of Funding At each stage of funding the startup team takes on a new set of tasks. Here’s the primary work at each stage: PreSeed — Define the market and identify the target customer. The early-stage team researches the market and talks with potential customers about…

Investors by Stage of Funding Each stage of funding brings a different set of investors. Here’s a list of investors to pursue by stage. Pre-Seed — Founders fund their initial startup research and market development. It’s too soon to take outside funding for what is not yet a formed business…

Boards and Advisors by Stage of Funding Each stage of funding brings a different set of advisors and board members. Here’s a list of advisors and board members to pursue by stage. Pre-Seed — Informal advisors and board members. They provide domain knowledge about target industries. Seed — Informal advisors…

Financial Work by Stage of Funding Each stage of funding requires financial work to be done by the startup. Here’s a list of financial goals to consider for your startups fundraise: Pre-seed — identify locked value in a customer segment. The output of this stage is a target market that…

Valuations by Stage of Funding At each stage of funding there’s a valuation range for the startup. This changes over time with fluctuations in the market and by sector. Here’s a list of ranges to consider for your startups fundraise: Pre-seed — $50K to $100K The output of this stage…

Fundraise Amount by Stage of Funding At each stage of funding, there’s a standard amount to raise. Here are the fundraising amounts by stage: Pre-seed — $250K to $500K This funding sets up the business and launches the customer discovery and product development process. Seed — $500K to $1M This…

Product Work by Stage of Funding The founder works on the product throughout the life of the business. Here’s the product work to be done at each stage of funding: Pre-seed — research the market to identify the customer careabouts and product features. Check the competition for their positioning and…

Purpose of Family and Friends Funding Family and friend funding is often used to start a business. Here are some key uses of funding at this stage: File the legal entity paperwork for an LLC, not a Delaware C corporation.  You can file for a Delaware C later if the…

Stages of Funding for Startups Startups go through a series of stages from launch to growth to scale. Each stage brings funding to the startup that serves the needs of its stage. Here’s a list of stages for startup funding: Pre-seed — this funding helps develop an idea, research the…

What is a whistleblower? Internal fraud is often caught by an employee. The employee who sounds the alarm is called a whistle-blower. The whistleblower is someone who reports fraud to the authorities. Whistleblowers fear retaliation for outing a manager or other employee. Those who want protections for keeping their job…

More Ways To Prevent Fraud in a Startup There are several types of online fraud. Here is a list of attacks to watch out for: Bots — these automated tools can infect your website and emails with viruses. Denial of service attack — this disables your website by sending too…

How To Avoid Fraud Fraud can be costly to a startup. Take these steps to avoid fraud in your business. Separate accounting duties — have at least two people handling the accounting and separate their functions. Know your team — run background checks on new hires and know your business…

Types of Financial Fraud There are several types of financial fraud related to startups in the investment industry. Here’s a list to consider: Misrepresentations — fraudsters can lie about the value, risks, and costs of financial investments. This also includes misrepresenting the financial condition and omitting key facts. Regulatory violations…

External Sources of Fraud There are several sources of fraud from outside a business. External sources of fraud pretend to be someone you trust. They create a sense of urgency and then demand payments. Here’s a list of common sources of external fraud: Fake invoices — the invoices show services…

Internal Sources of Fraud There are several sources of fraud within a business. Here’s a list of internal sources to review: Identity theft — the capture and selling of personal information for illegal uses. This is done by fraudsters capturing employee information through bank accounts and tax returns.  Asset misappropriation…

Red Flags Indicating Fraud Most fraud in businesses comes from employees and the management team. Here’s a list of employee red flags to watch for: Lifestyle changes show expensive new possessions such as new cars and homes. Substantial personal debt Addictions such as gambling or alcohol cause behavior change. Employees…

What Is Fraud? Fraud is officially defined as:  “The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” Fraud occurs in startups and small businesses and is usually through the action of a founder or employee. There are five…

How Does Chapter 13 Bankruptcy Work? Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Chapter 13  bankruptcy reorganizes the debt and sets up a payment plan. The debtor can keep their house as long as they make the…

How Does Chapter 11 Bankruptcy Work? Chapter 11  bankruptcy reorganizes the company and sets up a debt repayment plan. Here is how Chapter 11 works: It starts with filing a petition with the bankruptcy court. The debtor must file a list of assets and liabilities and a list of income…

How Does Chapter 7 Bankruptcy Work? Chapter 7 bankruptcy liquidates the company. Here is how Chapter 7 works: When a company goes into Chapter 7 bankruptcy proceedings, the bankruptcy trustee takes control of the company to liquidate the assets and pay the creditors. A Chapter 7 proceeding starts with a…

What is Bankruptcy? Business bankruptcy is meant to protect the personal assets of the owners of a firm. It gives your company a fresh start by relieving the business of debts. There are several types of bankruptcies. Consider these options for your business: Chapter 7 — Liquidation This shuts the…

Steps to Shutting Down a Startup There are several steps to shutting down a startup. Here’s a list of key steps to follow: Pay what is owed to employees such as accrued vacation. Pay all providers such as contractors, software vendors, and others. Collect invoices from any outstanding accounts.  Notify…

Preparing To Shut Down a Startup Sometimes the startup you launched does not make it and must be shut down. In shutting down a startup take the following steps: Give an early warning signal to the employees. Let them know what is happening such as we’re raising additional funding. Give…

Shutting Down a Startup Not all startups succeed. For those that don’t, there may come a time to shut it down. Here are some key points to consider in shutting down a startup: Before announcing the shutdown collect all accounts receivables. Sell any inventory left on hand. Notify investors first…

Best Practices for Building a Company Culture In building your company culture consider these best practices: Measure your company culture — review indicators that show how the company culture is performing such as employee engagement. Create rituals — establish activities you repeat consistently throughout the year to foster employee engagement…

How To Foster Your Company Culture A good company culture takes time and effort to build. Here are some steps to build out your company culture: Give outstanding benefits to the employees. Run team-building activities to encourage employee interactions.  Participate in community activities as a give-back. Promote wellness among employees…

Signs of a Good Company Culture Company culture is important for the success of a startup. Here are signs you have a good company culture: Employees feel they are respected and are treated with dignity. Leaders support the employees and help them succeed. Poor leaders are called out and removed…

How To Setup a Company Culture In building your company culture, realize you already have one for your startup. The initial hires have brought a culture to the company.  You can grow the company culture to a greater place. Consider these steps to grow and develop your company culture: Continue…

Before Building Your Company Culture Before building your company culture consider the following: Know your purpose Search for why your company exists. Identify your values Understand the core values of the company and what the company stands for. Hire the right people. Choose people who bring value to the company…

Characteristics of a Good Company Culture A good company culture will manifest itself in several ways. Look for these signs of a good culture: Stable workforce — the employees stay with the company a long time and there’s minimal turnover. Friendly atmosphere —  relationships among employees go beyond that of…

The Startup Company Culture The startup company culture brings a unique set of characteristics. Here’s a list of qualities to consider: Passion — the company is based on a driving passion to solve a problem or pursue a cause. Startups exude passion and everyone strives to work towards it. Personality…

Types of Company Culture There are several types of company cultures. Here is a list to consider in building out the culture at your startup: Clan culture — this puts the team first and places everyone on the same level. This promotes equality rather than hierarchy. Customer culture — this…

Components of Company Culture There are several components to building a company culture. Consider these elements in building out the culture at your startup: Purpose — the purpose of the company is the foundational element. The purpose motivates employees and drives the group toward a common goal. Growth — the…

The Importance of Company Culture Company culture shows the values, decisions, and behaviors of the founders and employees in a company. It’s important for founders to actively build the company culture. This is done primarily through the people you hire and the decisions you make. Building the right culture will…

What Is Company Culture? Company culture is the attitude and behavior of the employees and its leadership. This comes out in the form of decisions the company makes and the values the people hold. You can see it in how the employees act and work. In early-stage companies, the company…

Legal Issues Around Equity There are several legal issues surrounding equity to consider: You must have a legal entity to establish equity ownership. There are several types of legal structures including LLC, C-Corp, and more. The LLC is easy to set up and launch the business.  Delaware C-Corporation is the…

Best Practices for Founders’ Equity There are many decisions to be made with founder equity. Here are some best practices in handling those decisions.  The founder-co-founder split of equity can be anything except 50/50. A 50/50 split leaves no one in a position to make a final decision for the…

Best Practices for Equity Equity is a key component of startup compensation for founders and employees. While cash may be king in the short term, equity will be worth more in the long run. Here are some best practices for founders to follow: Treat equity as the scarce commodity it…

Equity Vesting Vesting is conveying the ownership of equity to the holder. Vesting schedules show the rate at which equity is vested over time. It is used to ensure founders and employees stay with the company till the proposed milestones are achieved. Investors will look for standard vesting schedules on…

Equity Dilution In the early days of the startup, the founders should raise only the amount of funding necessary to achieve the next milestone. The valuation of the company is low but will rise when adding products, revenue, and team members. Raising too much early on will cause the founders…

Equity Distribution Over Funding Rounds As the startup raises funding the founder’s and employees’ ownership stake will fall and the investor’s stake will rise.  This is due to the fact that more investors are added to the cap table over each round of funding. Both founders and employees undergo dilution…

Why Give Equity to Employees Employees are a key factor in the success of startups. Here’s a list of reasons why you should give equity to employees: Recruiting — the market is competitive, especially for quality candidates. A startup offering equity to employees will find it a competitive advantage over…

How To Give Equity to Employees Equity is an important compensation tool for employees. Startups that don’t provide equity must provide all compensation from the cash flow in the form of salaries and bonuses. This can be difficult on the finances of the business. Equity compensation doesn’t require any cash…

Evaluating Employee Equity Employees joining a startup will often receive equity as part of the compensation package. Investors know that only one out of ten startups will generate an outsized return. The rest turn in a modest return or fail outright. Employees should consider these factors in evaluating equity compensation:…

Employee Equity Equity compensation for employees varies greatly based on the location, type of startup, and job to be done. An overall allocation for employees is around 15% of the total equity. The first five hires receive 1% to 2% each. Later employees receive 0.25% to o.5% each. You can…

Advisors Equity Startup advisors can help a startup establish the business and find the right track to grow. Some informal advisors help the business without any compensation. Some formal advisors help the business but require compensation. Advisors seeking compensation look for a small piece of equity. Most advisors are not…

Co-Founders Equity Running a startup requires a complete team. Someone is building it and someone is selling it.  In the early stages of a startup, the founder is doing one of these and the cofounder is doing the other. Founders should look for cofounders whose skill complements their own. Since…

Types of Equity There are several types of equity in a business. Here’s a list to consider when engaging a startup: Authorized shares — the maximum amount of shares the company can distribute. Outstanding shares — the number of shares actually distributed. This determines the current valuation of the company….

Founders Equity Founders of the startup receive equity to generate loyalty to the firm. Cofounders also receive equity. In splitting equity between the founder and cofounder, avoid the 50/50 split as this puts no one in a position to make final decisions. There are many tough choices to make in…

Key Equity Terms Equity represents the ownership stake in a startup. Here are some key terms to know about equity. Vesting — the transfer of equity ownership from the company to the employee.   A typical vesting schedule is four years. Each month a portion of the promised equity is vested…

Startup Equity Basics Equity is an ownership stake in a company represented by shares. The three stakeholders are the founders, the employees, and the investors. Founders start with all the equity and then create and give shares to investors and employees in return for funding and labor. This additional equity…

Brand Equity Brand equity is the value that comes from customer recognition of the brand. Startups with brand equity command a higher price for the product and differentiate from the competition. Here are the key elements of brand equity: Brand recognition Customers recognize the visual identity of the brand and…

Common Branding Mistakes In developing the brand for your startup avoid these common mistakes: Spending too much on an agency. Most of the work comes from you, your team, and a graphics design professional. Take ownership of your brand building and outsource key elements of the project such as logo…

Best Practices for Rebranding Most startups will at some point need to rebrand their business. In rebranding your startup consider these best practices: Just as you start with a minimum viable product so you can start with a minimum viable brand. This allows you to test out your brand to…