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A startup doesn't need to be a unicorn

mattgiustwilliamson.substack.com

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Re: A startup doesn't need to be a unicorn

#211

Post by summarity »

gf000 wrote: post #200
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

Can non-German citizens apply (citizen of another EU-country, though)? I am planning to move to another EU country and Germany is one strong contender, and this would make it even better.

Not for these specifically, but most of them are funded by EU grants. The current ESF funding period runs until 2027, so you'd need to research which pathways to funding exist in your country and how to apply.

Re: A startup doesn't need to be a unicorn

#212

Post by marcinzm »

9rx wrote: post #110
jasode wrote: post #105

Earlier quoted context omitted.

>Maybe this is a US centric definition. It's a common definition for new companies that intend to grow quickly beyond a small/medium size and very often associated with funding from VC. 1st paragraph from https://en.wikipedia.org/wiki/Startup_company : >A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model.[1][2] While entrepreneurship inc…

> The characteristics in that paragraph don't apply to new mom & pop restaurants, dry cleaners, new law practices, etc I fully expect the founders of those businesses originally have dreams of their business becoming the next F500. But when validation fails... > and very often associated with funding from VC. If you keep reading we get to: "Unlike an entrepreneur, a start up founder doesn’t have a major financial mot…

> I fully expect the founders of those businesses originally have dreams of their business becoming the next F500. But when validation fails...

I take it you've not met many such people or business owners. No one except the utterly delusional would think a mom & pop restaurants, dry cleaners, new law practices, etc. would become a F500 company. Amazingly people start companies for reasons other than becoming a F500 company one day.

Re: A startup doesn't need to be a unicorn

#213

Post by tptacek »

shafyy wrote: post #210
zwnow wrote: post #77

Earlier quoted context omitted.

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

I have founded multiple companies in Germany and in the US. Sure, in the US you have services like Stripe Atlas that make it a bit easier. But still, I would not say it's much crazier registering a company in Germany compared to the US. Of course, it helps if you have a bit of an idea of legal concepts and accounting, but to be honest, that also makes sense, since you are starting a business. This is not to say that…

You can essentially create an LLC in Delaware (from anywhere in the country) as easily as you can create an Amazon account, so that's a big claim.

Re: A startup doesn't need to be a unicorn

#214

Post by tptacek »

jpfr wrote: post #138
zwnow wrote: post #77

Earlier quoted context omitted.

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

I just founded in Germany. The paperwork is … okay. Not much more crazy than tax returns or internal accounting you need to do in any jurisdiction. But yes, running any organization is a lot of work.

Creating a company in the US doesn't require tax returns or internal accounting. (But perhaps you meant European jurisdictions).

Re: A startup doesn't need to be a unicorn

#215

Post by tptacek »

the_clarence wrote: post #176
zwnow wrote: post #172

Earlier quoted context omitted.

Tax returns is once a year, which is okay. I see my bosses having to do paperwork every week...

I have an LLC in the US and have to deal with tax stuff all the freaking time

You deal with essentially (probably exactly) the same tax issues any freelancer would deal with, right?

Re: A startup doesn't need to be a unicorn

#216

Post by tptacek »

nico wrote: post #197
senko wrote: post #29

I do like the idea in general and feel there's a lot of room for improvement between the (VC / bootstrapping) extremes. However, the middle path from the article presumes the existence of VCs willing to join you on that path. The article waves this away with: > angel investors are generally more open to a 2-3x ROI For a $1M round you'd need to find 10-20 such angels (assuming $50k-$100k average check size) willing to…

> This will probably mean you have some revenue and some sense of where PMF might lay or some kind of brand/pedigree. > Do not underestimate the value of YC brand and being able to present on Demo Day gives you Except to get into YC you also need to have very good traction and a plan to 10x that quickly The two exceptions to that I’ve seen are: 1) you’ve had a good exit before, 2) you graduated from Stanford, Yale, H…

I can't speak for YC, but as an operator: the primary reason to go to YC is to smooth a path for later fundraising, and if you plan to fundraise, you need something like a 10x trajectory, because VC portfolio math doesn't work for companies without it.

Re: A startup doesn't need to be a unicorn

#217

Post by tptacek »

Eridrus wrote: post #157

It's obviously better to raise the optimal amount and no more. But things are not always so clean, and the best time to raise is when your company is killing it, not when you're running out of cash and trying to make it to profitability. I think one option this approach ignores is the ability to raise, but not spend profligately and not give up board seats. E.g. if you raise $10m, but still have $8m in the bank, a $1…

If you raised $18MM total in two rounds and then sell for $18MM, you're going to walk away with a signing bonus for the new company and little else, right? You can't generally sell in order to distribute the proceeds of an investment round to the company operators.

Re: A startup doesn't need to be a unicorn

#218

Post by tptacek »

LikeAnElephant wrote: post #153
dadrian wrote: post #131

You need to be a unicorn or you need to only take angel checks. This is not complicated.

Or, you know, build a business that customers are willing to pay for… Spend less than you earn. Maybe get an SMB loan if the numbers work. This approach is older than the tech industry.

Nobody disagrees with that. The clear subtext to that comment is "if you plan to raise money". You can bootstrap a successful firm without raising a dollar.

Re: A startup doesn't need to be a unicorn

#219

Post by fwip »

summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

Nitpick - if you need to apply and it comes with conditions, it's not UBI. Perhaps a better word would be stipend?

Re: A startup doesn't need to be a unicorn

#220

Post by tptacek »

9rx wrote: post #174
LikeAnElephant wrote: post #171

Earlier quoted context omitted.

I respectfully disagree that there’s no business opportunity that people are willing to pay for. If your only target are developers or the tech industry, maybe, but there’s a whole world of non technical business people with problems that have extremely easy (and boring) technical solutions. I’ve recently signed up my third customer paying $49/mo with a simple CRUD app. No targeted ads or landing pages. I literally w…

> I literally walked into offices in my town and asked what the most annoying part of their job is and I made a prototype. Consumers don't have offices. You are looking at a business-to-business transaction, which is where we said there is still opportunity, in large part thanks to those collecting angel money. If you are going to disagree, surely you can provide an example of where you have sold to the consumer? Aff…

Literally every freelancer can tell you a story that refutes what you're saying here.
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