Entrepreneurship: Be the Boss You Wish You Had

As we go through our entrepreneurship journey, we are so focused on our day to day tasks, that next funding round, and the next milestone. When reflecting on the big picture about making a difference, we often forget how much we as people factor into each other’s lives. On average, people spend 35–40% of their entire lives at work; that is 90,000 hours. When we go back to reflect on the people we have worked for and how it influenced us in a positive and negative way, it does show up when we dive into entrepreneurship and become leaders and bosses ourselves. Because we have the ability to make great impact on those partners, employees, and colleagues we spend so much time with, we should be strongly considering being the boss we always wish we had.

Everyone’s revelations about this topic would be different. For me, I had a series of great corporate supervisors who were supportive and knowledgable. However, it was my experience at a small consulting firm that impacted what kind of leader I wanted to be or not. Here is what I learned from my former bosses.

Bosses VS Leaders

1. Do Not Oversell a Solution to Clients And Make Your Team to Underperform

As a new CEO who is starting out, there is a lot of pressure to sell in order to pay the bills. However, if you sell 20 hours worth of work for only11 hours because you are a terrible negotiator, then read this article about not giving into discounts: https://medium.com/@VenturX_team/why-startups-should-never-give-discounts-8c291ad93167 and find better clients. If your team works on a billable time basis, and you train your team to work the 20 hours, then 20 hours will still be billed and get mixed up in the finance department. The clients would file complaints against the employee or the company. The other scenario that happened is that you force some of your employees to be assigned to the bad clients and your employees are overworked and force to under-bill the clients. Your startup company would then be making less money and your employees would be constantly frustrated because they will never reach their target. They say that entrepreneurs have to learn at warp speed to succeed in business. This is a prime example as to the notable effects of an entrepreneur’s lack of negotiation and prospecting skills.

Oversell and Under Deliver

2. After the Job Offer, Do Not Propose a Lowered Salary

After accepting the job, a got a call from my future employer who suggested to go on a lower salary with an unlikely bonus system. As an employee it was my first time seeing red flags of mistrust from any employer. He did that after I turned down my other job offers in order to take this job. Entrepreneurs should never do that because it breaks trust and you get off on the wrong foot.

I have come to learn how important trust is in your team and when you get off on the wrong foot, you already tainted your own reputation.

Trust

3. Signing an Awkward Contract

When I was young and working for this firm, I did not know I could question contracts. To this day, I am not sure it was 100% legal in Quebec to make someone go on a 50% salary cut for a probation period and force them to disclose all their personal activities such as volunteering, health and wellness problems, religious activities, etc.. This was stated in our contract that I was afraid to question when signing.

What I do now, is allow all levels of employees to ask questions and even follow up if I have not heard from them. My goal is to train someone for the duration of their contract and ensure they are fulfilled and happy. I respect their personal life and I do not make them disclose details because I do not want to make them feel as uncomfortable as I felt with this previous employment. I did have one intern who requested for us to know each other more so we made it happen; Otherwise, I respect their privacy rights. I cannot guess what will make them happy, I just have to ask. I learned another great lesson that I shared on Jeremy Ryan Slate’s podcast which covers “Grown ups don’t know everything.” You can listen to it here: https://www.jeremyryanslate.com/450-growth-secrets-networking-secrets-intentional-founder-sydney-wong/

Contract

4. Do Not Change the Work Expense Policy After the Trip

On my first trip to Boston, it was clearly written that the meals for the day was $75 CAD daily. After I came back from the trip and spent a little under $75, the CFO co-founder pulled me aside to say that the change was that the meals would be now broken down to $25 per meal for a total of $75. I did not misread because that was not written in the policy they gave before the trip. Overall, this employee lost money in order to go to a mandatory work trip (to generate billable hours for this company).

What I would have done is to absorb that one time expense since the employee followed policy meticulously. Changing an important policy like that would have been announced publicly instead of being pulled aside to be shaken-down by a cofounder of the starting company.

Employer

5. Changing the Year End Bonus Structure

When the bonus structure changes as employees are getting close to the achievement mark, it is very demotivating. The original one was based on billable hours and the new one was imposed near the year end, making all my past achievements obsolete and disregarded. There was no point in starting from scratch. It seemed that the new one was put in place in order to not pay out any bonuses that year.

Today, new entrepreneurs are taught to underpromise and over deliver. When it comes to employees, it should remain the same. This rule of thumb is another element that makes or breaks trust between the parties.

6. Don’t Point Out How You Wish You Didn’t Pay Salaries to Your Employees

At the end of the year, the CFO presented our overall revenue and expenses. The awkward thing that happened was he point out the revenue was higher than he expected so “it makes [him] happy.” He also pointed out the expenses (mostly salaries) were also higher than he expected so “it makes [him] less happy and this should be lowered.” If it sounds like this cofounder is implying people should get fired, then you are right…

One good part of that presentation was that they did show the revenue for the year which makes employees feel that they were contributing to a bigger picture. It was a good graphical way to show it. Overall, I cannot see how a founder can put a chart on the big screen and tell a room of people who were overworked that he feels he has overpaid would be motivating.

Revenues and Expenses

Overall, there is a difference between bosses and leaders. Everyone makes mistakes. We can learn from the mistakes of our former bosses and try to impact others in a more positive way. As entrepreneurs, we are our own brand and we have to learn the optimal ways of conducting our businesses, ourselves, and our team as fast as possible.

Warren Buffet
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Why Startups Should Never Give Discounts

Why Startups Should Never Give Discounts

When your business is starting out, it is common to want to sell right away, rack a huge number of clients and build credibility in your industry. Building all of that takes time. What startups tend to talk about these days revolve around motivation, grinding and how well to treat to your customers. What they leave out is how not every client is good for your business, how “doing whatever it takes” may harm you in the short and long run, and how all this may affect your credibility overall.

From working with 300 startup clients, I have had the chance to see that our market is very dynamic from one client to the next. Normally, our clients are not known to have deep pockets so that is where I learned the unique lessons about discounts. A couple of key learnings have come out of that over the years that I wanted to share…

1. 80/20 Rule

20% of the people take up 80% of your time. This is a tried and true statement among many psychological situations. In business, this would be true of your clients. In a startup’s early days, it may seem like you are supposed to give discounts in order to make those initial sales and gain your credibility. However, we have seen a huge difference in those clients who will and won’t see your value. (Check out our previous article: Am I Being Paid What Am I Worth?)

For example, we had a standard fee for writing business plans as an extra add on for those looking for funding. We had a client in the past who tried to negotiate during the 11th hour when I was almost finished the business plan to demand a discount. The request was to do 3 weeks worth of work in just a few days and they did not finish preparing their research either. Because of the situation the client put us in and the hard deadline, we spent 40% of the time negotiating and 50% of the time working on the business plan (and about 10% of the time sleeping). It was a prime example of how a client took 80% of our time and it was a hard lesson to learn.

80–20 Rule

What can you do about it?

A) Walk away…

In hindsight, we did not need their business. It would not have affected our brand and our core business of helping startups get investor funding. This business plan writing was a side service that was offered.

B) Flip your 80/20 rule to benefit your business!

Applying the 80/20 Rule to Your Business

2) Beware of Acquaintances Who Try to Squeeze Your Business

As your business grows and people start to see value in what you, some people will migrate back in your life and ask for discounts to gain the benefits. One example that happened was an acquaintance of mine who needed marketing consultation because he was part of a “Co-CEO” team but neither of them was the marketing/business person. This acquaintance is someone who I haven’t seen in about 10 years and only met through school friends a couple of times. I did not know he moved back to the city a few years ago. So after agreeing on the rate and services to be provided, this acquaintance messaged me back a day later and aggressively wrote this:

“Good morning,

I’ve just checked the contract and want to point out one thing

Are you really charging me the fees the same as you charge to strangers ?”

I was not sure what this aggressive greeting was about. I eventually saw that it was his way to “ask for a friend’s discount.” I was really confused that this happened after everything was agreed upon and written up in a contract that he then refused to sign. His partner and I sorted it out later and we commenced the work. It was done in bad faith after all because the 6 month contract…got cut into a 3 month contract…got cut into a 3 week contract…

Back Stab

Back Stab

Back Stab

What can you do about it?

There are a lot of support systems in your community or even online like a Facebook group full of entrepreneurs who will give great advice based on your specific situations. I went on a Facebook live chat full of entrepreneurs because I was new to this situation and was starting out this branch of the business at the time. I went on a live video to talk to people who have walked this path. They explained that I should not consider these people to be “friends.” Also, I should go back to them and ask for more. That is what I did during the second negotiation. They only hired for 3 weeks (but it was possible that is what they intended in the first place when negotiation a 6 month contract).

Another solution is to hire a sales coach if you are new to these negotiations. If you need recommendations for sales coaches or facebook support groups, send me a message!

If startups bow down to giving discounts every time they are asked, they will only be attracted discounted clients. These small clients will take up 80% of your time. You will be spending less time doing what you love — which is providing the solution or product. Even if your product or service is superior on the market, if you act like you are worth less, than that’s how the world will treat you.

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The Importance Of Customer Service To A Startup

As the owner of a young startup or business, your goal is to get customers by the droves. The type of business your startup is into makes no difference. As long as profit and not loss is the goal, your business is dependent on the presence of customers.

In the same vein, every business owner wants customers to keep coming back to do more business. Every company wants customers to advise friends and colleagues to do business with them. This is the cycle that the whole profit and loss industry runs on. This cycle has been around for centuries, yet it is still doing the trick.

Building a network of happy and satisfied customers doesn’t just happen overnight. It is a complicated network that thrives on awesome customer service. Just as strikers are to a football team, so is customer service to a startup business. Without it, there is no focal point.

With the advent of the digital age, the impact of customer satisfaction has increased drastically. Nothing spreads faster than rumors. With the internet, they spread faster than the speed of light. One tweet or a blog post from an irritable or dissatisfied customer can potentially mar your startup business. As the owner of a new business trying to break into a highly competitive market, you can grasp the importance of reputable customer service.

Essentially, customer service is a personal interaction with customers that becomes a pipeline to invaluable feedback, insight, and advertisement. Notice the use of the word “personal”. Most startups make the mistake of outsourcing their customer service needs. It is supposed to be a two-way communication that brings you and your customer closer together.

There have been some huge success stories due to excellent customer service by huge brands. Today, Nordstrom is one of the biggest retail companies out there. Back in the seventies, Nordstrom allowed a man to return his tires and even gave him a refund.

This was done despite the fact that Nordstrom did not sell the tires to the man. It had only moved into a shop which was previously used by a tire business. That story is still talked about and has played a massive part in the popularity and success of the company.

Today, Nordstrom continues that fine tradition by using Groupon deals to attract and communicate with its extensive customer base.

Another company that has benefited from impressive customer service is Target. Today, Target is the second largest discount store retailer in the United States. That is no mean feat, and it came about through one of the most impressive acts of customer service.

A young man walked into a Target store a few decades ago looking to buy a clip-on tie for an interview. Target didn’t sell clip-on ties at the time. The young man later left with a knotted tie and some advice on conducting himself during an interview. He then got a job at Chick-A-Fila, and great tales have been told of Target ever since.

Customer service is a vital cog in the machinations of a startup business. In case you are confused about the tenets of impressive customer service, here are a few tips to start you on your way:

  • Let your customers know everything your business entails
  • Answer the newest electronic mails and digital inquiries first
  • Shorten the line and process for getting across to your customer care representatives
  • Make use of personalized emails
  • Use human touch to deliver delightful surprises to your clientele
  • Inspire your customer base, make them feel special and part of something bigger
  • Always be ready to provide solutions to every inconvenience no matter how inconsequential it may seem
  • Learn from customer inquiries and issues to improve your customer experience
  • Finish with a smile.

Check out these examples!

Target

Target

Nordstrom

Nordstrom

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What to Include in an Investment Package

What to Include in an Investment Package

If you are looking for investments for your startup but not sure what pieces of information investors will need, READ THIS ARTICLE!!!! We will be going over documents needed for investment submissions and making sure your more than ready for potential investors. To begin, we will be looking on how to share this type of confidential data with investors.

Data Rooms

To share documents and confidential information about your startup what you will need is a “Data Room,”this is a very safe location that is created by the seller where important data is placed to be viewed strictly by the investor or anyone else who is significant. These data rooms can be created virtually and many firms provide them. Datarooms.com, Drooms, etc. are just some of the few that provide safe due diligence with information like this. In addition to this, you also want to make sure you can track open rates, so then your data is actually being useful to investors. If you see a file being opened more frequently then others than make sure that file is your priority and ensure it is updated frequently.

Documents

1. Historical Financial Statements 

(Here is a Template)

This information is important to investors as it provides a means of analysis and helps evaluate your startup’s financial performance. Your historical financial statements also help determine future trends as well as future expectations on your financial runaway for your startup. However, different financial statements relay different types of information. For example, a Balance Sheet will state your assets and liabilities and represent what the company is actually worth. Income Statements will state your income and how much things are costing you; this is very important for investors as they would like to see growth. There are many different financial statements you can have, but it is good to have a wide range of them in order to be more transparent with investors. Below are examples of a Balance Sheet and Income Statement from Walmart.

Balance Sheet (See Template)
Income Statement(See Template)

2. Business Forecast 

(Here is a Template)

What this is, in essence, is a prediction of future developments in your current startup through many aspects. Whether this may be in a sales aspect, technology advancement, or anticipated expenses, this all helps with budgeting and giving an investor a better understanding on what to expect in the upcoming years. It also helps them gauge the potential future growth according to anticipated business environment changes. There are a few places you can check out to see how exactly to create your own business forecast, Chron, JumpStart, and Entrepreneur.com. Below are also snippets of brief business forecast’s to give you a general idea of what investors expect.

Business Forecast

3. Customer List 

(Here is a Template)

A great way to begin talking about this is by describing what exactly is a “Customer List.” This is a intangible asset which means it is a non physical, non financial asset. Investors would like to this because they may find the demographics of the customers very helpful in making their decision. For example if your product was designed and made for teens but majority of your customers are middle aged people, then there is a mismatch and something is off. They want to see a realistic market potential sized and addressable market. It is mostly for transparency within your startup and making sure that your product or service is indeed reaching it targeted market. Although you may be reaching your sales or profit goal, analysing the customer list may tell investors that you are hitting a different and maybe a smaller market; in fact, it may decrease long term growth and potential. In addition to this, keeping the privacy of your customer lists is also very important and should only be provided to serious investors, do not post or upload customer lists online as it is a breach of your customers privacy. Below is a mock example of a very brief customer list example for general needs.

Example of Customer List

4.Customer Contracts 

(Here is a Template)

A “Customer Contract” is a legal agreement between you and the consumer by whom the service or goods will be received. In addition to this, the customer must be paying for the goods or services. Signing a partnership with another company is not a customer agreement if there is no monetary exchange for a good or service. An example, to represent this would be if Facebook partnered with Uber and created a new database of information. This is a partnership, not a customer engagement because there was no monetary exchange whatsoever. On the other hand, if Facebook paid Uber for all their data, then this would be a customer contract. As you can see, it is important for investors to know about these customer contracts as it may have potential growth for your startup in the future. Only include customer contracts that consist of big amounts of money relative to your startup and ones you may feel are appropriate.

Example of a Customer Contract

In addition to this, letters of intent are also great ways to show customer agreement with the service or product you are offering. Check out this article to learn more about it in more detail.


5.Monthly Recurring Revenue (MRR)/ Churn (SaaS) 

(Here is a Template)

MRR = Revenue/ month

Churn Rate= # of clients lost in period/ # of total customers at the beginning of period

Let’s begin off by diving into MRR ( Monthly Recurring Revenue). MRR is essentially a measure of your revenue stream on a monthly basis. This is applicable to companies who operate on a subscription basis and get recurring revenues and also companies who also make regular single transactions that may not necessarily reoccur. Examples of a recurring revenue type of model is Bell, Netflix, Spotify, etc. A startup with monthly recurring revenue is also more attractive to investors as there most likely is stronger retention rate. For companies who have regular one time transactions the MRR can be calculated using the average amount for each month.

Moving on, the “Churn Rate” refers to the percentage of clients who stopped and discontinued commitment to the service they signed up for. An easy way to remember this is through an equation.

(Churn Rate= # of clients lost in period/ # of total customers at the beginning of period)

Sample Charts

MRR Chart
Churn Rate Chart

6. Employee Contracts 

(Here is a Template)

This is a signed agreement between an employer and employee; it is vital in protecting employee rights and also employer liabilities. Aspects such as salary, general responsibilities, duration of employment are all addressed in this document. Investors maybe be interested in this info as they want to know what type of team your startup consists of and if it is well balanced. For example if you had a high paying programmer compared to other programmers in the startup, investors would like to if it makes sense especially if the startup isn’t as widely scaled yet. Every dollars matters and it matters even more when it’s the investor’s dollar. In addition to this, a “Non-Disclosure Agreement” would also be in the employee contracts and this is very important to include. This prevents any vital information regarding the startup to leak out to the public or competitors who may utilize for their own profit.

Below is a very brief employee contract meant just for example purposes.

Employee Contract

7.Details on Competition

(Here is a SWOT Template)

Competition is present in every industry in the world and there is a good chance you have a good set of competitors in the field your startup lies in. It is important to address these competitors for both yourself and investors as you want to be as unique as possible to order to differentiate. You can analyze your competitors in a number of ways but a common way is to complete a SWOT analysis on potential competitors. SWOT stands for strengths, weaknesses, opportunities, and threats. What this analysis does is that is looks at competitors through internal and external aspects and makes sure you are being able to differentiate them. Accept your weaknesses as a startup and continue building upon your strengths. Identifying and sharing threats early on ensure transparency and makes investors more aware of the whole market situation. Below is an example of a SWOT analyse on a pie company.

SWOT

8.Cap Table 

(Here is a Template)

This is one of the most important documents an investor is interested in and one document you should not miss in your submission. The “Capitalization Table” shows ownership segments within the company, including shares, options, and equity. Everyone who has a stake in your startup MUST be in this document so then valuation of an investment is valid and accurate. This is a table which also has to be updated regularly. In essence, every line you add to the table should add value to the company because it shows investors, employees, and partners that there is indeed a successful vision which they also believe by. Furthermore, there isn’t necessarily a proper way to format this table, just make it simple, organized, and easy for investors to understand.

Example of a Cap Table

9.Option Pool Information

An option pool helps to acquire top talent for your startup and entice people to stay with your company. This is done by offering them stake in your company. Where does this stake come from you may ask? There is actually a dedicated percentage of your startup dedicated to your employees, obviously if you opt in to do it. A scenario to represent this could be as such, you start up your own company in the field of creating innovative energy sources. You want top talent, so you hire a few grad students and someone who also has worked at other places to guide your startup the right way. In the beginning of their time at your company you can offer each of them a certain percentage of the company stake, this can be in the form of stocks assuming you are a public company. Let’s assume each year they get 200 individual stocks for each person which they can buy at the price at which they first joined the company at ($5 dollars). If they leave, they do not get to redeem any of the stocks they have. Over time, they tend to work harder and harder to make the company more successful essentially increasing the stock price. After 4 years each of them has quantity of 800 stock parts and the stock price is now $50 dollars. If they sold the stock at this point in time they would have made an instant profit of $36,000. {(800*50)- (800*5)}= 36,000. This is what drives employees and creates an urge to join your startup compared to others. Investors want this information because they want to know that dedicated percentage that you allocated to your employees and seeing if it makes a difference.

Cap Table with the Option Pool Option

The final step investors are going to do is call many large vendor customers and ensure there is indeed a legitimate business taking place. The investor wants to make sure his money is going towards the right investment and think of this call as a reference check. They want to know how the customer feels about you first hand and how their experience has been with you. Depending on the industry, investors will also ask customers if the product or service has made their job easier and if it is something sustainable.

You must understand that for a investor their money is very important and will want to know everything and anything their money is going towards. It’s best to be transparent with investors and provide adequate financial details with strong analyse on your competition. Investors have been through this many times and being prepared with all this information puts you ahead of the curve.

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How to Build Traction Starting from an MVP

How to Build Traction Starting from an MVP

A vision without traction is merely a hallucination. Cultivating and creating a successful startup is more than just offering a product or service, it’s a consistent effort of building, measuring, and learning. However, one of the most important factors to venture capitalists (VCs) is traction and measuring the potential success of your product. In regard to measuring traction for your startup, below is a list of what potential investors will value when looking for investments.

Minimal Viable Product

Let’s begin off with an MVP (Minimum Viable Product). This is not a beta or prototype you are launching it’s rather a product or service you make to see if there is a market for it. You are trying to learn what your users want and don’t want and minimize the amount of time you spend on creating features or aspects of the product which is not valuable. Believe it or not, many big companies we know today originated from an MVP.

Dropbox

A good example to represent this is cloud database company called “DropBox.” Their MVP product was essentially a video which showed what they wanted to do and a signup form for people who were interested in the idea and wanted to be early adopters. Almost overnight, there were over 75,000 signups all with only a 3-minute video of Dropbox and not even an actual product of the software. If you are very early in your startup, make sure there is indeed a market for your product or service using an MVP. This is a valuable aspect to present to investors if you haven’t created real customer data points yet.

Below is a list of more MVP’s which you may find very interesting and see how the actual product which has derived from this has changed.

1. Airbnb

Airbnb

Co-founders of Airbnb needed help paying their rent in San Francisco. They also noticed lots of business conferences around; hotels were very expensive in their area. They wondered if strangers would pay to live in someone else’s house for a night. They provided all the facilities and tested out their product assumption using the interface you see above. Creating a website like this especially in the type of technology we have right now would cost you couple hundred dollars max.. If you have no idea about coding then check out ShareTribe, it is great place to create a peer to peer marketplace website and they take of everything for you. You get to focus on building your customer base and they take care of everything that’s technical. Base plans start at $100 a month and this is definitely a great way to see your your product has a market fit without spending tens of thousands of dollars into something that hasn’t been validated yet. In addition to this, hiring university students in computer science is also a great cheap alternative as well.

(MVP is estimated to be $100/ month and 2–3 weeks of coding)

2.Groupon

the point

They first started off creating “the point” which was a platform for bringing people together for fundraising or boycotting a retailer. This platform failed and from this they created Groupon. They used a customized wordpress blog and didn’t invest any time in developing a coupon system or designing a new website. They just took whatever resources they had and made a MVP out of it. It definitely was not scalable but it did answer Groupon’s questions for them. To recreate this type of MVP a simple subscription to “WordPress” will work as well. Relaying information on your own customizable wordpress website is great and more importantly relatively cheap compared to investing in a dedicated server and a team maintaining the site.

3.Buffer

Buffer

What Buffer did for their MVP was create a landing page where they showed what it would do for potential users; if you were interested, you could sign up as a paying customer. If you still weren’t sure as to why you wouldn’t join, it you could still sign up for their email alerts and executives would reach out to to find out why you weren’t convinced to use the platform. Hundreds of people responded and the demand for Buffer was evident. This strategy helped give valuable feedback and find out what users really wanted out of the service. In today’s day and age creating a landing page to show potential users is very simple. The only real aspect of what is being invested is essentially your time to review and analyse what users are saying about your potential product or service.

You can use WordPress for $10–33 dollars a month and creating the static landing page will take a few days.

4.Zappos

Zappos

The founder began off by posting photos from the local shoe store and uploaded them to this website. He then checked if anyone was interested and if there was he would go to the store and buy the shoe and then sell it to the customer. Doing this overtime he found out there was indeed a need for this type of service and answered his question if his product would be accepted into the market. Only after that, he invested into infrastructure and inventory. Reselling is becoming very common in the 21st century and online commerce is almost everywhere around the world. To recreate this type of MVP it is very cheap, quick and easy. For example you can get a subscription on “Wix” for $5–10 dollars a month and use a premade template to upload photos onto your site. This process can take as little as a day. There are multiple website builders such as Wix, Shopify and SquareSpace and all with free and paid options as suited to your individual needs.

You can get this website running in 1 day and $5-$10/month on Wix

5.Twitter

Twttr

It was first used as an internal messaging system for Odeo employees and it picked up so much that the monthly bill for the messaging system went into the hundreds of dollars. They noticed the demand and prepared to take Twitter large scale and release Twitter publicly. Creating an MVP like this is more expensive than the other options available. Creating a whole messaging system for internal use requires some capital equipment which many startups may not be able to afford. However if you do have a reasonable number of assets and capital equipment then you should consider creating something for a specific group of people then expanding once you see the validation. Another way to overcome this issue is getting a developer on your team who can use today’s available tools to create a messaging system more efficiently and cheaply.

6.Zynga

Zynga

Zynga uses landing pages and adword MVP tests to direct available resources into developing projects. What this means is that they launch ads for games in existing games and if the user clicks on it and seems interested in the new game, then they would continue developing the new game and put more attention towards it. Farmville, Yoville, etc. are all games that were developed this way and based of users interests. This type of MVP is essentially placing ads whiles users are playing games or browsing through Zynga. Sending ads to your own users are virtually free but placing ads through the Google Search Engine costs about $0.58 per CPC.

Creating and launching your own ads take a few days.

7.Foursquare

Foursquare

Foursquare began with a single featured MVP which is essentially a version of the product where design and features were minimal. They started off with user check in and offering gamification rewards. Once they realized users like this they added more features and then tested those out. It was a very repetitive process but in the end it creates a product completely sculpted by users. Although it is still very pricey to outsource work in the creation of making an app as an MVP (50,000–1,000,0000) it is strongly advisable to have a experienced coder who has coded apps before. This saves on a lot of money and you make it completely customizable towards your needs. The whole app making process however takes a number of months. If you are still insistent on hiring a company to create your apps there are few who are great at that (247 Labs, Openxcell, etc.)

This MVP takes 3–4 months to build.

8.Pebble

Pebble

Pebble actually was actually able to get money from investors; however, over time, the money ran out and they needed funding to showcase their research in E Ink displays in watches. They really wanted to find out if people would be interested in a smartwatch that had an exceptional battery and could connect to your phone. They started a kickstarter which had a video explainer describing the product and reached their goal of $100,000 in 2 hours. At the end of the fundraising they had raised 10.2 million for the project and then finally they went to manufacture the product after the evident market demand. Kickstarter is a great way to really see if your product has a market fit without starting to mass produce the product. It’s free to launch on Kickstarter but there is one catch. You need to get all the funding you submitted for, if not you lose the funding you raised. In addition to this there will be a certain percentage kickstarter will take away from each successful fundraising effort. Furthermore, you need to have pictures and a live demonstration of your product in order for you to be valid for kickstarter. This whole process will take a number of days and it will be for. More specifically the Kickstarter team spends 30 hours reviewing your submission and will reply back in 2–3 business days.

If accepted, this costs $0 and 1–10 days to make the graphics/ video. (This does not include promotional campaigns.)

9.Spotify

Spotify

Spotify has a 4 step cycle when it comes to creating and testing out its MVP. “Think it, Build It, Ship it, Tweak it.” Spotify is made up of many small teams and they have many ideas, the way they get this idea validated is by first creating the MVP based off their idea. Then they release it to users very slowly and take in a mass amount of reviews from their MVP. After, they tweak the MVP based off the reviews and users’ thoughts. They used this very process to scale from bottom up. While Spotify’s MVP product was very expensive because of its strong software background, Spotify was still able to minimize costs by creating a complete roadmap of early and cheap prototypes. They only completely launched when baseline of quantity was met.

The next sign of traction I would like to focus upon is customer acquisition. How are you going to reach out to customers? What’s the cheapest way to reach them? How much customer growth have you had? Different traction channels works for a variety of startups and can cause a chain of explosive growth for your venture. A few examples of channels for traction is through targeting blogs and search engine marketing.

A) Targeting blogs is one of the most effective ways to reach out to your first wave of customers and create your presence.

  1. The first step is to find a blog which is in the similar field as your product or service and ensure there are an appropriate number of followers on that blog suited to your needs.
  2. Secondly, reach out and offer your product or service to its readership to develop and build traction. Popular startups such as Code Academy , Mint and Reddit all got their start by targeting blogs. Mint actually gained initial traction by reaching out to mid sized blogs and ensured the bloggers were a good fit for their service. The famous bloggers used to exemplify the service and showcase it while Mint gave them VIP service in return through the service. This essentially grew the customer database.
Search Engine Marketing

B) Another channel to gain traction is through “Search Engine Marketing.” This term refers to placing ads on search engines such as Google and Bing and because SEO is so broad it will be applicable to any startup. This whole SEM process works by finding high-potential keywords which leads to your website or business online. The page that a potential customer lands on is called a landing page, and this is one the most important pages on your website. Key SEM metrics to reflect upon are CTR and the CPC. CTR (Click-Through Rate) is the percentage of people who clicked on your ads compared to the amount of people who actually saw your ads. The CPC (Cost per Click) on the other hand is the amount it costs to buy a click on an advertisement. What this means is how much are you willing to pay to get a potential customer on your website.

www.ancestry.com

A good example of a company that used this method to generate traction is Inflection, this is the company behind Archives.com which was soon to be acquired by Ancestry. They spent over $100,000 a month and dedicated several employees to customer acquisition through this method. Obviously very early startups don’t have this type of resources, but Monahan’s input on SEO is that “even if you decide to send less than 5,000, do it, because you get to have an early base of customers and users and it will create a whole bunch of things that are important in terms of regular metrics.”

The harsh reality is that majority of startups fail, and investors know that, that’s why traction is very important to them and making sure there is a market for that product or service. A MVP (Minimum Viable Product is a great way to see whether or not a business opportunity exists and ensures your long run potential. There are many ways to gain traction and I have showed many examples of it from successful startups who have all taken very different routes. Ensure there is a product market fit and traction will follow. The more traction you have, the greater the chance to catch an eye of an investor and finding external investment. “Almost every failed startup has a product. What failed startups don’t have are enough customers”- Gabriel Weinberg (CEO/Founder of DuckDuckGo)

To learn more about examples of traction feel free to head on over to the article written by us on how letters of intent can increase your startup’s funding success.

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VenturX is a Startup Awards Finalist 2018!

VenturX is a Startup Awards Finalist 2018!

 

Honored that VenturX is a finalist for Startup Awards by Startup Canada

It was a beautiful night that took place at Le Gare and Ubisoft in Montreal with multiple categories recognizing the hard work and accomplishment of diverse entrepreneurs. It was truly an honour to be recognized by an incredible organization such as Startup Canada among our extraordinary peers and award recipients.

About Startup Awards

Each year, hundreds of nominations pour in from across Canada, and thousands join us as we celebrate the regional winners at local, grassroots ceremonies in startup spaces and education hubs.

Nominations for the 2018 Startup Canada Awards will open in February 2018.

The winners of the Startup Canada Awards are selected by an esteemed adjudication committee which consists of a diverse group of leading entrepreneurs, ecosystem builders, and previous Startup Canada Award recipients. Regional and National Adjudications committees to be announced.

This year, we are delighted to announce 6 regions for the 2018 Startup Canada Awards: British Columbia, Ontario, the Prairies, Quebec, the Atlantic, and the North! The Startup Canada Awards culminates in October 2018 with a red carpet Grand Finale in Ottawa celebrating the national winners. Click here to register for a regional event near you or the Grand Finale today.

Objectives of the Startup Canada Awards:

Celebrate those working to advance entrepreneurship in Canada;

  • Increase awareness of the importance of strengthening Canada’s entrepreneurship ecosystem and culture
  • Incentivize efforts and elevate the ambitions of the Canadian entrepreneurial community
  • Nominations for the 2018 Startup Canada Awards will open in February 2018.

The winners of the Startup Canada Awards are selected by an esteemed adjudication committee which consists of a diverse group of leading entrepreneurs, ecosystem builders, and previous Startup Canada Award recipients. Regional and National Adjudications committees to be announced

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IPO vs M&A

IPO VS Mergers and Acquisitions

IPO VS Mergers and Acquisitions

As time rolls by, there is good chance your start-up may have attracted some investors, other companies, and achieve success sooner or later. This exit decision to finally glorify yourself to the public market comes down to either an IPO or a Merger & Acquisition. We will be speaking about Pros and Cons for each, steps that need to be taken to pursue either path, and really finding out if your start-up is suited towards a specific route.

What is IPO?

An IPO is the first initial (public) stock offering that you are giving to the general public, and what really turns the company from a private one to a public one. You are bound to do this when you want to raise even more cashand expand significantly. Beyond getting money from the banks, investors, or additional grants, an IPO is the best option in regard to raising money. However, there are a few cons to keep in mind, such as you may NOT be able to raise the desired funds if the IPO price is not justified in the market. In addition to this, loss of control will develop as many new shareholders develop, as you are giving equity away in return for cash to expand your company. Other start-ups that have expanded through an IPO is Alibaba (25 Billion) and Facebook (16.01 Billion).

Facebook Alibaba

Facebook Alibaba

Furthermore, an IPO is not something you can decide within months, it takes years of planning and a lot of resources and cash to set an IPO and ensure it goes smoothly. On the other hand, if you are looking to expand and grow but do not want to take the IPO path, the merger and acquisition route is an excellent choice as well.

What is M&A?

Mergers and Acquisitions (M&A) is the combination of 2 or more companies as a single entity. Specifically, in an acquisition, you do not need to see a 100% stake, it just needs to be majority stake to be declared as an acquisition. In terms of a Merger, there are different types, such as Congeneric, Horizontal, Vertical, Cash etc.. The reason why start-ups take up the merger path over an IPO is simply that they aren’t ready to take it public but want to increase the company’s valuation. However, if you want to ease back on the pedal, then an acquisition by a bigger company is a better option as expertise and resources will be readily available. Some examples of famous mergers include Exxon and Mobil, Disney and Pixar, and many more.

Angela Brady

Angela Brady

The steps to officially launch your own IPO is lengthy and will cost you greatly. Although, in the end, you do grow a very big amount of money. To begin off, you must ensure all your financial reporting systems are consistent and financial documents are properly audited, as you are going on the public market and transparency is key. Next, you will need key individuals to act as underwriters who essentially approach potential investors to buy the shares. Services like these can be available at companies, such as Gold Man Sachs and Morgan Stanley. After this, you MUST register with SEC to present the company story and allow them to do most of the legal registration and review process. You want to ensure you gain as many investors as possible as nothing is guaranteed. An IPO that I will shine light upon is Facebook’s famous IPO in 2012. The build-up leading to the IPO created extremely high expectations and investors were ready to invest, however, on May 12th, things started to go downhill. When the initial offering launched, technical issues stopped some orders from going through, but as usual, the stock shot up in the preliminary stages. However, it soon went back down to around the initial price, but barely managed to stay above at the end of the day. Given a few weeks, investors lost an average of approximately 40 million dollars, which showed a lot of work still needed to get done. Underwriters bought back shares to artificially increase the price, but given the factor of time, the Facebook stock steadily increased and created a stable environment for the share. This is a prime example of where an IPO can go wrong in the beginning. However, if you have the right people, right resources, and persist through it, everything will pull through at the end. This IPO raised 16 billion for Facebook, which is recorded as the third largest IPO in U.S history.

Nasdaq Welcomes Facebook

Nasdaq Welcomes Facebook

Mergers and Acquisitions are a lot simpler when comparing it to an IPO, however, they are still lengthy and takes time to implement. To begin off, an acquisition or merger are strategic decisions based on current and forecasted market situations. Since this merger or acquisition will most likely be in the millions or billions, you want to ensure you have appropriate analysts as it is a very big step for your company. Next, you want to locate and find potential partner companies that would be a good addition to your company both in the present and in the future. Work out implications of the actions you would make and see aspects, such as risks, benefits, and more importantly, how it will affect your company. Another important aspect to look at is to check if the company is financially doing well. To do so, hire auditors to do a financial background check on the targeted company. The last thing you want is to find out that the targeted company is financially unhealthy after the potential acquisition or merger. After this, a thorough valuation is a must, as it draws the line between ensuring the investment was worthwhile. This goes both ways round, if a bigger company is trying to buy you out or get a major stake in your company, ensure it is a reasonable price, keeping in mind the market forecast and current financial status. Everything after this point is all a legal matter and speaking to executive members on both sides of the company. Agreements and negotiations will take place, and execution will soon also play its role if both companies agree to the merger or acquisition. You want to ensure that the immediate impact regarding the M&A maximizes efficiency, while minimizing potential disruption to operations.

A successful and very strategic merger is Disney and Pixar. Disney used to release a lot of Pixar’s movies, however, post the movie “Cars”, the contract was about to expire, and a merger was getting set up within the two companies. This move was beneficial for both companies as they needed each other’s resources and brand reputation in the market to succeed.Pixar developed plans to release movies twice a year with the aid of Disney. Disney is one the biggest brands when it comes to marketing to children, and working with “Cars” in collaboration with Pixar, it created the most top-selling merchandising toy among four-year-old boys. Disney has a very good sense of marketing, advertising, and merchandising plugs to help market Pixar’s movies and toys. If it wasn’t for this merger, both companies wouldn’t have been where they are today and this very strategic move has helped both of them for the better.

Disney

Whether you are in the initial stages of your start-up or are looking for ways to expand, planning for an IPO or M&A are great places to start once you do see success in your business. It is important to maintain good financial records and consistent financial procedures throughout the life of your start-up. To recap, if you want to expand and gain big amounts of funding, an IPO would a suitable option, given your financially doing well and investors can see future success within the start-up. If you want to ease and let someone else take control or aid you, significantly in your start-up, a merger or acquisition is also a great option as a plethora of resources will be available to you and more importantly a great team of experts that can take your start-up to another level.

Questions

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Should Founders Work on Their Strengths or Weaknesses?

When looking at this scenario in a macro, it seems that most entrepreneurs at different stages of the business would choose to work on strengths and let another expert work on the weaker part. In theory it sounds logical and favourable. However, let’s examine these scenarios why a lot of first time founders seem to fall into the pit of spreading themselves too thin and focus too much on the business areas that are weak. Is there such a thing as a good balance? How do you measure it?

Different entrepreneurs will have strengths and weaknesses in different areas. Running a successful company is very demanding so it may seem that startup founders are supposed to be good at everything or all else will fail. Here is a short list of what strengths and weaknesses entrepreneurs may possess:

· Getting investor funding

· Pitching to investors

· Managing customers

· Managing internal team

· Building the product or service

· Marketing

· Sales

Investor Funding

Investor Funding

The famed author of the book “Rich Dad, Poor Dad” Robert Kiyosaki describes funding as a prime example of a necessary skill that most entrepreneurs are weak at. This is not to say they will not be successful but it is say that they should be aware of this early on in order to prepare for it when their business needs funding the most. A lot of startup founders try to take getting funding into their own hands, even though it is their weakness; they do this instead of hiring for others’ strength such as a software tool to help train their business or professionals to help broaden their network. Like any strength, securing investor funding requires knowledge of the startup investment field, relationship building, and logistical time. Usually startup founders would try and fail between 2 months — 12+ months before asking for the necessary help. By them, their business would have gone through a significant amount of suffering that could have been easily avoided. We have heard of startups who have gone through 1 year of unsuccessful capital raising before finally considering help with their weakness.

Tim Ferriss

Tim Ferriss

Tim Ferriss, #1 New York Times best-selling author and Silicon Valley entrepreneur, dedicates to steering people to work towards their strengths and hiring/ outsourcing for weaknesses in order to accomplish professional goals. When founders dive into the entrepreneurial journey and undergo self discovery, each will find where their strengths and weaknesses really lie. Each business decision relies on utilizing available resources, time, and strengths and weaknesses of people.

Team

When founders try and do everything themselves, they realize that they take a longer time to develop the skill sets that funding experts, accountants, web designers, etc.. would have. It would cost more time and money in the long run and the return on investment (ROI) is poor. When founders hire experts in the fields where they are weak, they can work along side the experts to better learn what the end result should look like. It would be a positive learning experience that also saves you time and resources in the end.

If founders did not put too much on their shoulders by hiring for weaknesses and doubling down on their own strengths, they will not only save themselves a lot of time but they will spend their days building their business and doing what they love.

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How letters of intent increases startup funding success

How letters of intent increases startup funding success

Letters of Intent

What is a letter of intent? Who are they for? Are letters of intent outdated? Are they legally binding? How is it related to funding? How does it increase my conversion metrics as a startup?

Let’s take a look deeper into one of the important elements of startup conversion called letter of intent. We have come across this topic when one of our startup clients who is preparing for funding using www.venturx.casuggested for more information about letters of intent and how it would affect his Conversion score on the VenturX tool. Let’s dive in and answer all those buzzing questions!

What is a letter of intent?

A letter of intent outlines the terms of a deal and serves as an “agreement to agree” between two parties. They are usually not legally binding but it depends on how it is written. Most partners, investors, merchants, etc.. tend to favour those that are not legally binding. Below, there are a few examples of letters of intent.

How does a letter of intent help me get startup funding?

Startups are always trying to defend their valuation of their business when it comes to funding. The truth is that most startups do not realize the gold and leverage they tend to have. Even when you cannot show revenue, you can certainly show traction. A written agreement proving the interest or partnership of another party is certainly a strong way to show traction. When you are up for investor funding, the investor has more confidence in what is presented when there are contact details, price points, etc.. on these letters.

Who should startups get letters of intent from?

There are several sources that startups could be collecting the letters of intent from.

1) Potential investors — startups might hit need to hit a certain milestone (ex. Patent approval) in order to get the potential investment. Like a term sheet, this letter assures other investors that your startup is valued at that particular pre-determined valuation. These would be used to back up those claims.

2) Clients — this works very well with Business to Business (B2B) clients. For example, before putting in a purchase order, the business you are trying to sell to might want to see test results, patent approvals, etc.. These terms would be written into the letter of intent.

3) Partners — there are many different kinds of partnerships. For example, a referral partnership would be when two parties refer clients to each other in exchange for a commission fee or just out of goodwill. When startups do not have a full product yet in order to sign a referral partnership agreement contract, a letter of intent could take its place until development is completed.

What should be included in a letter of intent.

1) Language and Tone: Think about who the letter of intent is for. For example, if you are a VenturX startup aiming for funding, your letter of intents would be read by the investors that VenturX matches you with. Therefore, your letters of intent would cater to the language of investors.

2) Pricing, dates of delivery, etc.. — if you have agreed on pricing, dates of delivery, etc.. that is great to add because it strengthens your letters of intent. Note that if deadlines are not met, you can send an updated letter of intent to be signed for the updated estimated delivery date. Specific details are better to be included when a third party is reading it because there is context and clarity.

3) Signatures — be sure that whoever’s signatures are on the letters of intent are the head decision maker and not likely to change jobs anytime soon. If this happens, you may need to spend more time getting another signed letter.

Examples

1. Purchasing Letter of Intent

This letter of intent includes details such as the pricing, who is buying, etc. It is a great example because these detail tell the investors that there is definitely traction in the pipeline. It helps support the analytics of the VenturX report for that company.

LETTER OF INTENT FOR PURCHASE OF COMPUTER EQUIPMENT

March 11, 20xx

Contact Name

Address

Address2

City, State/Province

Zip/Postal Code

OBJECT: LETTER OF INTENT FOR PURCHASE OF COMPUTER EQUIPMENT

Dear [CONTACT NAME],

[YOUR COMPANY NAME] intends to purchase certain computer hardware from [SELLER]. The purpose of this Letter of Intent is to summarize our discussions to date and to confirm our respective intentions with respect to the proposed transaction.

[YOUR COMPANY NAME] intends to purchase from [SELLER] the [MODEL] computer.

The purchase price for the [MODEL] model shall be the lower of [AMOUNT] or whatever better price [SELLER] is able to extend to [YOUR COMPANY NAME].

[YOUR COMPANY NAME] and [SELLER] will use their best efforts to conclude a contract on or before [DATE].

In order to secure timely delivery of the equipment [YOUR COMPANY NAME] has paid to [SELLER] the sum of [%] of the listed price as a deposit, which shall be promptly refunded in the event negotiations are terminated.

In the event that a contract is not signed on or before [DATE] for any reason whatsoever, [YOUR COMPANY NAME] or [SELLER] shall each have the right to terminate the negotiations without liability.

This document is a Letter of Intent only. It is not intended to be, and shall not constitute in any way, a binding or legal agreement, or impose any legal obligation or duty on either of us. If the foregoing reflects our mutual statement of intention, please sign and return the enclosed copy of this Letter of Intent.

Sincerely,

FOR [YOUR COMPANY NAME] FOR [SELLER]

Authorized Signature Authorized Signature

2. Purchase with Deposit/Escrow

This letter of intent is a great example even if your industry is not real estate. The timeline details as well as the deposit procedure details are included. It allows investors to visualize how the process is going to go. Even though the investors may be familiar with the industry standard deposits or escrow, it is always good to include the details in it so everyone is on the same page.

LETTER OF INTENT

This letter sets forth some of the basic terms under which Seller and Purchaser would be interested in entering into a Real Estate Purchase Agreement. It serves as a letter of intent (“Letter”) from _________________________ (“Purchaser”)through and dated ______________, 2010, in which Purchaser has set forth its interest in acquiring the subject Property. NEVERTHELESS, PLEASE BE ADVISED THAT THIS LETTER IS NOT CONTRACTUALLY BINDING ON THE PARTIES AND IS ONLY AN EXPRESSION OF THE BASIC TERMS AND CONDITIONS TO BE INCORPORATED IN A FORMAL WRITTEN AGREEMENT.

PROPERTY:

____________________

____________________

____________________

(hereinafter, the “Property”)

PURCHASER:

____________________

____________________

____________________

____________________

SELLER:

c/o Silo Group, LLC

7800 W Sand Lake Rd, Suite 210

Orlando, FL 32819

PURCHASE PRICE:

The Purchase Price shall be $___________

FINANCING:

EARNEST MONEY

DEPOSIT:

_________________ dollars ($_________) (“Earnest Money”) shall be placed in escrow with the Title Company upon the execution of the Purchase and Sale Agreement (defined below). Upon expiration of the Due Diligence Period (defined below) and provided Purchaser does not terminate the Purchase and Sale Agreement before expiration of the Due Diligence Period, the Earnest Money shall become non-refundable.

DUE DILIGENCE ITEMS:

Within five (5) days after the Effective Date. Seller, at its expense, shall provide Purchaser with the following items, if any, in Seller’s possession:

A copy of the most recent title commitment for the Property

Lease

Survey

Environmental Report

Items (a) through (d) above and the updated title commitment and updated survey, if applicable, are hereinafter referred to as the “Due Diligence Items”.

DUE DILIGENCE PERIOD:

Purchaser shall have up to ____________ (__) days from the Effective Date (the “Due Diligence Period”), to review the Due Diligence Items and to enter upon the Property to inspect the physical condition of the same, as it shall deem necessary. On or before expiration of the Due Diligence Period, Purchaser shall determine whether it is feasible to purchase the Property based on Purchaser’s review of the Due Diligence Items and its physical inspection of the Property. If it is not feasible for Purchaser to purchase the Property, Purchaser may terminate the Purchase and Sale Agreement. If Purchaser so terminates, the Earnest Money shall be returned to Purchaser, and the Due Diligence Items shall be returned to Seller.

CONTRACT:

Upon the mutual execution of this Letter, Seller will promptly prepare a Purchase and Sale Agreement and Seller shall make a good faith effort to deliver said Purchase and Sale Agreement to Purchaser within five (5) days from the effective date of the LOI.

TRANSFER:

Special Warranty Deed or the equivalent thereof in the State where the Property is located.

CLOSING:

Closing shall occur on a date mutually acceptable to purchaser and seller, no later than ________ (__) days after the effective date.

CLOSING COSTS:

Closing Costs shall be paid according to local custom, further detailed in the Purchase and Sale Agreement.

SALES COMMISSION:

Purchaser and Seller each represent that no real estate broker, finder or intermediary has been consulted or used in connection with the purchase and sale of the Property except Silo Group, LLC. Silo Group, LLC shall be compensated upon Closing by Seller pursuant to a separate agreement with Seller.

CONFIDENTIALITY:

Seller, Purchaser, and their agents shall maintain the confidentiality of the parties, terms, and conditions of this letter and the negotiations that may follow, if any, from this date forth.

The above items are the general business terms and conditions to be covered in the Purchase and Sale Agreement, which would be submitted to the Seller. Additional remaining terms of the Purchase and Sale Agreement will be negotiated and must be acceptable to both Purchaser and Seller.

This Letter is not intended to be a binding contract.

If this Letter accurately reflects the general business terms and conditions which may form the basis of a separate written agreement, please confirm in writing no later than ______________, 2010.

Buyer hereby agrees to the terms and conditions of the Letter.

By: ________________________________ ____________________

Date

Name: _____________________________ ____________________

Title

Seller hereby agrees to the terms and conditions of the Letter.

By: ________________________________ ____________________

Date

Name: _____________________________ ____________________

Title

3. Purchase Upon Due Diligence and Shipping Details

This example gives details about how the inspection or due diligence will take place. These details are good to give assurance to investors because depending on the situation, investors may also offer a second round of due diligence. If the inspection/due diligence is being serviced by a trusted third party, that is even better. The delivery details also gives an overview of the timeline when things will take place. This transparency in the letter increased trust level between the parties.

AIRCRAFT PURCHASE OFFER

Ref: _________________ S/N ___________ Registration: _________ (the “Aircraft”)

Subject to ratification of a mutually agreeable Aircraft Sales Agreement within 5 business days, Purchaser offers to purchase and Seller agrees to sell the above referenced Aircraft subject to the following:

1. Purchase Price: The purchase price shall be $ _____________________________________ USD

2. Deposit: Upon ratification of this Offer, Purchaser shall make an immediate refundable escrow deposit in the amount of $ ________________USD to _______________________________ (“Escrow Agent”) within 1 business day. Purchaser and Seller shall share escrow fees equally. Time shall be of the essence.

3. Inspection: This Offer is subject to Purchaser’s satisfaction with a visual inspection of the Aircraft and records to be completed within 3 business days followed by a technical inspection (hereafter “Inspection”) of the Aircraft, engines, avionics, logbooks and records including a test flight of one hour, to be commenced within 5 days at _______________________________ or other mutually agreed upon facility to determine the Aircraft is in compliance with Paragraph 5 below. Purchaser expressly agrees that all costs of the visual or technical Inspection and the movement expenses shall be for Purchaser’s account and pre-paid in advance. The Aircraft shall not be flown, except for delivery, following the Inspection.

4. Acceptance: Prior to rectification of any discrepancies found during the technical Inspection, Purchaser shall accept (“Acceptance”) or reject the Aircraft in writing within 2 days following completion of the technical Inspection. Upon Acceptance, the deposit shall become non-refundable, subject only to Seller’s performance hereunder.

5. Condition: Aircraft shall be delivered at the Seller‘s expense:

(1) With all airworthy systems and avionics functioning normally

(2) Current on it’s maintenance program with no deferments or extensions;

(3) With all AD’s and mandatory SB’s accomplished

(4) With all records, logbooks, flight manuals, and accessories in owners possession;

(5) Free and clear of all liens or other encumbrances.

6. Delivery & Closing: Final payment & Delivery for the aircraft shall occur simultaneously at ___________________________________ within 3 business days following Sellers compliance with Paragraph 5 above through the Escrow Agent. Prior to delivery, Seller shall execute and place a Bill of Sale with the Escrow Agent. This contract and all negotiations shall remain strictly confidential.

7. Additional Terms:___________________________________________________________

_____________________________________________________________________________

SELLER: PURCHASER:

_________________________________ ___________________________________

(Company name) (Company name)

_________________________________ ___________________________________

(Signature) (Signature)

Title: _____________________________ Title: _______________________________

Date: _____________________________ Date: _______________________________

The examples show that there are different styles for letters of intent. It highly depends on what industry the business is in. When reviewing it, make sure to include all the details mentioned in this article and your business will be one step closer to your funding goal.

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Should Startups get Free Resources or Customize Help? (AWS Edition)

Should Startups get Free Resources or Customize Help? (AWS Edition)

Should Startups get Free Resources or Customize Help? (AWS Edition)

As more and more startups sprout from each major city in the world, the number of free and customized services to support startups also grow globally. One of the first expenses that startups will be spending on are servers. No matter what industry your startup company is in, you will need a website. So let’s review which is better: a free server or a paid customized help. As a small gift, our development team has written out FAQs about the Set Up that are not included in Amazon’s free trial. See end of the article.

I Want Freebies! (Obviously)

I love freebies

I love freebies

Freebies

This would be the obvious answer that free is the first resource that unprofitable startups would turn to because of their limit budget. When startups on a budget, words like “free” can mean a lot. You don’t know if you would like to commit to a monthly payment. This is especially true for first-time startups. There are services like Ormuco,Microsoft, and Amazon Web Services (AWS) that offer free startup hosting for a year. We will focus on the one we just switched to which is Amazon Web Hosting from Ormuco. We won’t go into why there was trouble with using Ormuco. It is not the place for that.

Pros

  1. This is FREE for one year for you to try unless you have multiple sites like we do. Then it could be less than 1 year.
  2. Choosing things that are well known will have a lot of documentation that is available online including this one to help you set up.

Cons

  1. They do not have anyone to help you with any support when you are on the free version (so make sure there is someone on the internal team you can trust with handling all of this)! You might not want to outsource this part. This is also attributed to if you have questions about the setup.

Should I Go for Customized Services?

This is a great option if your budget can lean this way. You can get things done faster with less headache.

How can I get set up info for Free?

As part of our company mission, we want to help as many startups save time, be more efficient and achieve their goals. If you do end up choosing the free version, here are a few questions that our internal team has answered for you!

Frequently Asked Questions (AWS Set Up for Beginners)

FAQs
  • How to move to continuous integration with code deploy?
    A: If you are using Bitbucket, this guide will help you. It basically boils down to building a series of scripts that throw your source around from bitbucket to an S3 instance to your EC2 server. If you make sure everything is running (especially the code-deploy agent). That way, it will work beautifully and save you time.
  • Getting charged on free tier/What does the free tier actually encompass?
    A: This is a big one because their support pages dance around it very much. In general, Amazon tells you what will be charged as an extra and what you’ll get for free. For example, Amazon’s free tier includes an EC2 – their cloud instances – running for  750 free hours per month for one year. Since you are billed per hour this sounds pretty straightforward… until you realize you’ll be charged for setting up any additional concurrent instances. You should set up your development environment elsewhere unless you want to pay for your free trial. In general, the free trial availability varies from service to service, so you should check, but they all should cater well enough to early-stage startups.
  • Do I need an Elastic IP?
    A: Yes! Your instance comes with an IP; but every time you stop and re-start it AWS assigns it a new IP. You have to set up an elastic IP under their services and associate it with your instance. That one will persist restarts, so you should definitely assign it to your server.  You get one per instance for free
  • Which set up do I start with?
    A: We went with the free tier t2.micro EC2 and some negligible SSD storage space running Ubuntu. Simply, you pick a tier and a region. Then you name it and configure it.
  • Which region should I use?
    A: This is also a tricky one. On the one hand, at least in theory, you mitigate latency by having an instance closer to where your user base is. On the other hand, certain regions are cheaper. We don’t know exactly what the science of choosing that is. Nevertheless, us-east-2 seems to be the cheapest.
  • What if I want more?
    A: The 1 year free tier is the smallest generic one that anyone could get with just an email.

But for startup, AWS offers much more interesting free tiers though, from 1000$ to 15,000$ over 2 years, depending on your context (backed by an incubator or not, …)
Startup should try to not use just the free tier, but ask for the AWS Activate program: https://aws.amazon.com/activate/

1) https://aws.amazon.com/free/  –  The free-tier central page, which gives information on a plan by plan/product by product basis, notably “what’s covered exactly by the time-bound free tiers, what’s covered by the lifetime (renewed monthly) free tiers, like DynamoDB or Lambda” etc.

2) https://calculator.s3.amazonaws.com/index.html – The official cost calculator  where you can include/exclude the 1- year free tier

For more great information about AWS, here is a Medium article from another user: Bootstrap to Billions on AWS. Enjoy!

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