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I have never read a business plan or balance sheet

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Re: I have never read a business plan or balance sheet

#91

Post by sumedh »

ganeshkrishnan wrote: post #61
invalidname wrote: post #22

He invests in seed rounds where those often go down the drain. The things that matter at this stage are: Founders and general market size. So sure, ignoring the noise of those two makes sense.

>Founders and general market size And both of them can be as ambiguous as anything. If anything, its impossible to predict who or what can become successful. Look at the historic interview of zuckerberg and his competitor: https://www.youtube.com/watch?v=cUNX3azkZyk Competitor seems more outspoken, got more airtime, had already monetized yada yada but here we are.

The other guy did not say anything about the number of users while FB already had 100k users

Re: I have never read a business plan or balance sheet

#94

Post by darksaints »

tomhoward wrote: post #49
ineedasername wrote: post #6

I understand business plans, but balance sheets? It seems like you'd want to know the financial picture of a company. What else to you look at to, even at the most basic level, determine if the startup is going to be able to pay it's AWS bill and payroll that month?

We used to send lengthy, wordy updates to our investors, including YC/PG. Then one time he replied, frustratedly, imploring us to just tell him how much money we were making, how much money we were spending, and how much we had in the bank. He later put that concept into this essay http://www.paulgraham.com/aord.html

How much you were making: seen on income statements as revenues and on balance sheets as accounts receivable.

How much you were spending: seen on income statements as expenses and on balance sheets in accounts payable.

How much cash in the bank: seen on cash flow statements as starting/ending cash position and seen on balance sheets as cash assets.

Paul graham didn't care about your poetry, he just wanted to see your income statement and balance sheet. He apparently just didn't want to call it that because then he couldn't get edgy contrarian soundbites in on Twitter.

Re: I have never read a business plan or balance sheet

#97

Post by chris_wot »

ohmanjjj wrote: post #70
Invictus0 wrote: post #69

Earlier quoted context omitted.

Clearly one of you must be wrong or lying

Maybe if I had written unit tests my companies would also sell for over a billion

Why not sell the unit tests separately from the business?

Re: I have never read a business plan or balance sheet

#98

Post by alasdair_ »

Negitivefrags wrote: post #57
tomhallett wrote: post #37

Earlier quoted context omitted.

People really struggle to recognize context. I assume most people who are getting so upset about pg’s tweet are reading it as “business plans are stupid. Balance sheets are stupid. No company should ever make one because no one should ever read it. Anyone who reads one is stupid.” It should be implied that his advice is only relevant the type of investing which pg does. pg tweeted later on that his solution is someth…

I founded a company without a business plan. Raised money without a business plan. Ran the business profitably for a long time and then sold the majority of it without a business plan. I don’t see the value in a formal business plan at all and so I would almost agree with your made up quote there. I mean obviously you need to have a plan for your business. But writing it down in some formal way seems like a waste of…

I found the process of writing a business plan to be a useful one. It’s really just a list of questions to ask yourself - who are the customers? What is the product? How will you sell it? etc.

The plan itself was short enough that I could share it with a fee people for advice but I never showed it to any of my investors, other than perhaps as a way to give a pre-canned snippet of information on a specific thing.

The process itself took about a day and a half, mostly spent getting specific answers. The knowledge gained helped a lot while pitching.

Re: I have never read a business plan or balance sheet

#99

Post by mrVentures »

Negitivefrags wrote: post #57
tomhallett wrote: post #37

Earlier quoted context omitted.

People really struggle to recognize context. I assume most people who are getting so upset about pg’s tweet are reading it as “business plans are stupid. Balance sheets are stupid. No company should ever make one because no one should ever read it. Anyone who reads one is stupid.” It should be implied that his advice is only relevant the type of investing which pg does. pg tweeted later on that his solution is someth…

I founded a company without a business plan. Raised money without a business plan. Ran the business profitably for a long time and then sold the majority of it without a business plan. I don’t see the value in a formal business plan at all and so I would almost agree with your made up quote there. I mean obviously you need to have a plan for your business. But writing it down in some formal way seems like a waste of…

Not sure how many employees you had, but I'd say anywhere more than three or four it really helps to write something down so that you all can be sure you agree on it. Or I guess even if you don't agree on it, you know what it is.

Re: I have never read a business plan or balance sheet

#100

Post by divbzero »

theonething wrote: post #96

Had to chuckle at this exchange down in the replies: > @ebecerra999: how do you approach Ikea furniture. > @paulg: Oregon Expressway, then 101. Not sure why they were asking about Ikea furniture.

That is indeed the fastest route from El Camino to East Palo Alto.
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